• Nuno Moreira da Cruz

CIRCULAR ECONOMY: “Unless we go circular is game over for the planet”

In the last 60 years the world population has grown from 3bn to 7bn, and in five years we will be 8bn living in this planet.

The tremendous GDP growth that the world has seen in the same period came at the expense of the Planet - he was always there for us. The environment paid a “cost” to produce products and services, but this cost was never factored into the production costs.

Traditional business theory proposes that businesses’ productivity is based on how efficiently it utilises three variables – land, labour, and capital. It is widely accepted that effective management of these variables ensures profitability and continued business growth. What this model does not consider, however, is the dependency of businesses on the natural environment for their land and raw materials.

If we continue at the level of consumption and disposal model we currently have, we will soon need two planets. As Wayne Visser, Cambridge Professor says “Unless we go circular is game over for the planet”. So, what does “go circular” (circular economy) mean?

"Whether there is a planet there for us” was never part of the equation, and therefore wealth and economic growth has been based on a linear production system – take, make, use, lose. A "degenerative model", in the words of Kate Raworth (“Doughnuts Economics”). Take whatever you need from nature, make whatever you want with it, use it (sometimes for as little as you can…) and just throw it away. Sounds familiar?

So, again, “Unless we go circular is game over for the planet”. There is no way other than moving from degenerative to regenerative, embark on “circular models” where, like in nature, everything becomes feed stock of something else. The "take, make, use" of the current model remains, but then it needs to enter into a regenerate, restore (repair, reuse, recycle) mode, so that we do not need to go back and “take” again.

From product design to the way we consume, everything needs to be thought through. Innovation is the paramount concept to take us through this dilemma that, more and more, seems like survival. ”Take the example of mobile phones, typically used for two years”, writes Kate Raworth, “in the EU 160m phones are sold every year but only 6% were being reused and only 9% disassembled for recycle. The remaining 85% ended up in land fill”. In a circular economy they would be designed for easy collection and disassembly. Scale those principles across all industries and you start to turn 20th century industrial waste into 21st century manufacturing food.

Business as usual is no longer an option. If companies are not to over-exploit the resources provided by our planet, constant innovation and adaptation must be the norm. I personally believe that businesses who want to remain innovative and profitable will look to reduce the volumes of waste they produce, will think about the products they make and distribute, and consideration is given to what happens to them when they come to the end of their lives.

A didactic video on “How the circular economy works” follows: https://www.youtube.com/watch?v=zCRKvDyyHmI