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The Real Circular Economy

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The Real Circular Economy THE REAL CIRCULAR ECONOMY How Relocalising Production With Not-For-Profit Business Models Helps Build Resilient and Prosperous Societies Sharon Ede CoFounder, Post Growth Institute Catalyst, Fab City Global Initiative www.postgrowth.org www.fab.city December 2016 Sharon Ede December 2016 1 THE REAL CIRCULAR ECONOMY How Relocalising Production With Not-For-Profit Business Models Helps Build Resilient and Prosperous Societies In recent years, the idea of a ‘circular economy’ has come to the fore as a way to tackle carbon emissions and waste. It has gained traction with thought leaders and jurisdictions around the world as a way to stimulate economic growth, foster innovation and generate employment. The circular economy builds on concepts including zero waste, cradle to cradle and biomimicry. It is focused on creating economic value and reducing environmental impact through design, highest and best use of materials, and efficient use of resources and energy. The Ellen MacArthur Foundation, a leading authority on circular economy, defines a circular economy as: …one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles1. How we design, make, use and manage things at the end of their useful life has enormous implications for everything from our demand on nature’s resources, our carbon impact, and the amount of waste we generate. Efforts to crystallise and focus attention on creating a circular economy have created a huge awareness of, interest in and momentum for approaches that make a lot of environmental and economic sense. At the same time, a technological approach to the circular economy is necessary, but not sufficient, to get us on track for a secure future. The principles2 of a circular economy speak to material resources and our systems of managing them, however with a few exceptions, such as Douglas Ruskhoff’s call for ‘reprogramming our economic operating system’3, Rammelt and Crisp’s ‘systems and thermodynamics perspective on technology in the circular economy’4, and Christian Arnsperger and Dominique Bourg’s call for ‘perma-circularity’5, there is little mention in contemporary circular economy debate of the wider milieu of economic, social and cultural systems in which a circular economy must operate. Adopting a broader definition of ‘circular economy’ can help us build a sustainable, prosperous and fair society. 1 www.ellenmacarthurfoundation.org/circular-economy 2 www.ellenmacarthurfoundation.org/circular-economy/overview/principles 3 http://circulatenews.org/2016/11/douglas-rushkoff-on-reprogramming-our-economic-operating-system; www.rushkoff.com/medium- douglas-rushkoff-growth-became-enemy-prosperity-fix 4 www.paecon.net/PAEReview/issue68/RammeltCrisp68.pdf 5 http://wiki.p2pfoundation.net/Perma-Circularity Sharon Ede December 2016 2 ECOLOGICAL FOOTPRINT AND OVERSHOOT If it took Britain the exploitation of half the globe to be what it is today, how many globes will it take India? Mahatma Gandhi, 1908 The circular economy is primarily concerned with the flows of materials and energy, and it is often taken for granted that this circulation can happen within a growing economy. However, the demand for materials and energy needs to be considered in the context of the limits of a finite planet. Materials can keep circulating through being designed for disassembly and remanufacturing, or kept in use longer through being designed for durability, but if the ‘circle’ or total demand for materials and energy keeps expanding, we have not solved our civilisation’s challenge. When human demand on nature’s capacity exceeds what nature can supply, we are in a state of ‘overshoot’6. The level of overshoot is the amount by which nature’s biological capacity is being used beyond its regeneration rate – for example, overfishing or overharvesting, or emitting too much carbon dioxide into the atmosphere and destabilising the climate. The minimum, non-negotiable condition for a sustainable civilisation is to live within the means of nature - to avoid ecological overshoot. This condition is at odds with the current development paradigm which dominates both economics and politics globally, that of continuous economic growth into the indefinite future. Historically, countries have sustained this growth by appropriating carrying capacity (resources, ecological services, waste sinks) from elsewhere on the planet through economic or military power, with waste (particularly CO2) being emitted into the global commons. However this model of dependence on ‘ghost acreage’ ignores one simple reality – globally, not everyone can be a net importer of biocapacity. Once the biological carrying capacity of the planet is exceeded, ‘development’ occurs through the liquidation of the planet’s natural capital stock, switching from the reproductive use of the resource base, which leaves it intact, to extractive use, which reduces the total store. Instead of living off the Earth’s ‘interest’, humanity begins eating into the Earth's 'capital'. Globally, we are liquidating natural capital and calling it economic growth. It is like ripping off parts of a house to use as firewood in order to keep warm. Avoiding overshoot is not sufficient in and of itself for a prosperous, healthy society, but without it, sustainable civilisation is impossible. 6 www.footprintnetwork.org/images/article_uploads/EOD15_PR_scenario_graphic_final.jpg Sharon Ede December 2016 3 All other human challenges are ultimately dependent on whether we sustain or undermine the resource base and the ability of ecological life support systems to function. The destructive and painful effects of economic collapse will pale into insignificance in the face of the consequences of ecological collapse. How can we know if we are in overshoot? The majority of the resources people consume and the wastes they generate can be tracked, and most resource and waste flows can be converted into the biologically productive area required to maintain these flows. The Ecological Footprint7 is a resource accounting method and tool which measures how much biologically productive land and water area humanity uses to produce the resources it consumes and to absorb the waste it generates, using prevailing technology and resource management, wherever on Earth those bioproductive areas are located. It aggregates human impact on the biosphere into one number, a common currency of global hectares, or the bioproductive space occupied exclusively by a given human activity8. This allows comparison of supply (or biocapacity) with demand (the Footprint, or consumption) to determine whether we are in overshoot – or using more ‘nature’ than is available. The Global Footprint Network maintains a series of biophysical accounts for over 200 countries, dating back to 1961. The Ecological Footprint account of each country is determined by a complex spreadsheet designed to enable calculation of a country’s per capita Ecological Footprint, and compare that number with the biocapacity of the country and planet. Official data from the UN Food and Agriculture Organisation (FAO) and the International Energy Agency (IEA), and data from a range of other reputable international sources, form the basis of national Footprint accounts9. The spreadsheets, which comprise thousands of data points, track a country’s production, import, export and consumption of a vast range of commodities - including food and fibre crops, timber and fossil fuels – in biophysical units (or volume of material eg. tonnes) rather than monetary units, which only reflect market value, not availability in the biosphere. Each category includes both primary resources, such as raw timber or milk, and manufactured products that are derived from them, such as paper or cheese10. The Ecological Footprint accounting methodology is deliberately conservative, to avoid exaggerating the Footprint, and is therefore likely an underestimate. Footprint accounting also trade corrects – revealing where countries are ‘outsourcing’ impacts like greenhouse gas emissions11. The Ecological Footprint is an indicator, and indicators are sensors. To be effective sensors, they must incorporate feedback mechanisms about the limiting factors of systems, so that it the system knows how to react to impending danger. In this case, the limiting factor is the biological capacity of the Earth, and how much of it humanity is consuming. 7 The Ecological Footprint concept was initiated and developed by the University of British Columbia’s Professor William Rees, who has been teaching the Ecological Footprint concept since the mid-1970s, and Mathis Wackernagel, a PhD student of Rees, went on to further develop and promote the Footprint, founding the Global Footprint Network. 8 www.footprintnetwork.org/en/index.php/GFN/page/footprint_basics_overview 9 www.footprintnetwork.org/en/index.php/GFN/page/footprint_data_and_results 10 www.footprintnetwork.org/en/index.php/GFN/page/methodology; www.footprintnetwork.org/documents/National_Footprint_Accounts_2016_Guidebook.pdf 11 www.theguardian.com/environment/2014/jan/19/co2-emissions-outsourced-rich-nations-rising-economies Sharon Ede December 2016 4 Each year, the Global Footprint Network calculates Earth Overshoot Day – the day on which globally, humanity’s consumption (Ecological Footprint) exceeds what the Earth’s biocapacity can supply. The remainder of the year, we are in global overshoot. Earth Overshoot Day
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