Creon Butler
Well, welcome, everybody. My name is Creon Butler, and I’m the Director of the Global Economy and Finance Programme at Chatham House, and it’s my really great pleasure to welcome you today to this roundtable, in which we will be focusing on the role that economic policy innovations can play in supporting the recovery from the current unprecedented economic crisis.
COVID-19 has devastated the global economy, and, while the recent good news on vaccines gives cause for hope, policymakers still have to grapple with the immediate crisis of a second wave, and the longer-term legacy of corporate insolvencies, high unemployment, lost time in education, and escalating debt problems in the emerging and developing worlds. And so, a key question, therefore, is the right mix of policies to deal most effectively with the long-term economic fallout, and what are the prospects that at least something positive may emerge from the pandemic’s terrible human tragedy, because we take this opportunity to adopt innovative approaches to longstanding challenges.
It’s a particularly good time to ask this question, as we are just a few days away from the Saudi G20 summit on the 21st and 22nd of November. This will be a virtual summit this year, which is a massive innovation in its own right. But, as you’d expect, the agenda that the Saudi Presidency is focused on, it’s very similar to the one we’re discussing today, supporting the economic recovery and trying to ensure that the post-COVID new normal is as beneficial as possible. The US will still be represented by the Trump administration, so there may not be any immediate change to the general tone and what the summit can deliver, but participants will, I’m sure, be thinking about what might be achieved with a Biden Presidency next year.
Now, to discuss these questions, I am delighted to have with me two of Chatham House’s leading experts. Elizabeth Isele is an Associate Fellow in the Gender and Growth Initiative at Chatham House. Elizabeth is a leading expert on senior and intergenerational entrepreneurship. She founded the Global Institute for Experienced Entrepreneurship, and she has advised a very wide range of governments, international organisations, and companies. And Patrick Schröder, Patrick is a Senior Research Fellow in the Energy, Environment and Research Programme at Chatham House. He specialises in the global transition to an inclusive circular economy and has authored a recent book on the subject. And, prior to Chatham House, he was a Research Fellow at the Institute of Development Studies at the University of Sussex, and he has also worked extensively on EU development co-operation in China.
But, before we move into the discussion, a few quick housekeeping points. The event will be held on the record and is being recorded. If you want to tweet, please use the #CHEvents, and, after some initial discussion, we’ll have an opportunity for a ‘Q&A’, and, if you’d like to raise a question, and I very much hope you will, please enter the question on the ‘Q&A’ function, and please also give your name and affiliation.
So, if we could move to the opening questions, Elizabeth, perhaps I could put the first question to you. The pandemic has had a particularly devastating effect on seniors in society, and not just in terms of the loss of life, but also the knock-on effects of shielding and isolation. So, my question really is, what do you think the long-term effects could be on the role that older people play in our economy, and is there any potential upside from the pandemic for the role that seniors play in our economy in the future? Thank you.
Elizabeth Isele
Thank you, Creon, and it’s a pleasure to be here speaking with all of you and I definitely think there is an upside in the older demographic, and we need to stop thinking about them as a dependency demographic. Certainly, they have been hugely impacted in – regarding their health, in terms of the COVID epidemic, but those that are healthy and those who recover from the pandemic, all the different horrible things it’s inflicted on their lives, really, we need to recognise that they are an untapped resource. And, in a nod to Patrick’s area of expertise, in terms of sustainable resources, I would argue that older people are the only growing natural economic resource in the world today. And it’s – we – I was at a conference in Vienna last year where they were talking about, we need to think of a different way of measuring aging. Instead of measuring aging chronologically on what has happened in your life, because of all the medical interventions we’ve had that extend lives, so now we’re living – individuals are living 20, 25, 30 years longer, and leading very healthy lives. So, instead of measuring aging chronologically, we need to measure it in terms of the potential of that demographic, and I would like to say that they – they’re contributing their experience and their expertise goes a long way in solving many of the problems that COVID is presenting to society at large in a global arena.
So, in a way, it’s – we’ve dealt with aging, negative aging, for a long time, and this is an opportunity to highlight this demographic, what they bring to the table, how they can help, how they can catalyse their experience with younger generations and really solve some of these most pressing problems. So, I’m one of the few people that look upon it optimistically, but then, I’m from the United States and we’ve just elected a new President, so I have this sense of euphoria anyway, with my own biased opinion. Thank you, Creon.
Creon Butler
Thank you. Maybe I can just follow-up. I mean, particularly in terms of the crash learning that the economy has gone through, in terms of technology, and people talk about, you know, ten years of learning being done in the matter of months, and I just wondered to what extent that is one particular aspect that could give older people more access and a bigger role in the global economy in the future, or maybe there are other aspects of this kind of learning that you would want to point to.
Elizbeth Iselea
No, I think that’s very accurate, and the older people have been expediting their learning for a long time because they see an end door to this learning, just in terms of the years left ahead of them, and what they can do, the most important thing is to enable them to share that expertise with younger people, with governments, with corporations, with individuals, who are trying to solve these problems. And it’s – people often say that seniors are – lack technology skills, where there is much, much data out there that already acknowledges that seniors are extraordinarily capable in the technology, and they love the technology, and it accelerates their thinking. And the one thing, not the – but one major thing that seniors have is they have restored their sense of creativity, and they’re thinking very creatively, whereas people – younger people and people in midlife, in their working careers, sometimes their creativity and innovation is stifled because they are afraid to break out of the norm that they – they’re afraid to fail. And the senior demographic is much less risk averse ‘cause they’re not afraid to fail, they have failed, and they know that they can pick themselves up, and that in itself is a huge lesson to other generations in that it is not – failure is not a negative. Failure is a very positive, in terms of building. You know, you know what works and you know what doesn’t work, and you can build from that point. So, it really – it helps enormously, but, as you can tell, I’m very passionate about this and about the resources, seniors bring to the table, and not just seniors, but women, as well, we’ll get into that later.
Creon Butler
Thanks very much, and maybe, in the next round, we could come back to the – sort of, the question of how you turn this opportunity into a practical deliverable, if you like. Patrick, maybe I could move to you now, on a similar sort of question, in relation to the low-carbon transition, and, I mean, essentially, to what extent do you think there are upsides from the pandemic in the way we tackle this massive existential crisis in the future? And, in particular, you know, you’ve obviously worked on the circular economy, that is one of the really exciting areas of new innovative thinking, so you may want to focus a little bit on that in particular. Thank you.
Patrick Schröder
Yes, thank you, Creon, and good afternoon, everyone. And, yes, there are – there is an upside, I could maybe see that, as well, from our perspective, in a way, with the pandemic, the current system, there has been some shakeup, really, and with the sustainability transitions, and that includes low-carbon transition.
There’s often been the talk about [inaudible – 11:43] and certain systems, and now this would be an opportunity to accelerate the transition to a low-carbon and sustainable economy. One precondition to this would be, however, that we have political commitment towards sustainability and the green agenda, and another opportunity also linking to the topic that Elizabeth mentioned. So, what we’re seeing also now is one of the challenges is youth unemployment. So, if we can now, with smart policies, link the green agenda with the green jobs agenda, I think that would be very powerful, in terms of creating both benefits to society, new skills for young people, and advancing progress towards a sustainable economy. And we see that this is now moving ahead, so just today, we had the government’s announcement of a ten-point climate and environment plan, which could be more ambitious, however, it’s a good step in the right direction. Now, with Biden, who also, in his campaign, had a very detailed climate environmental justice, you know, programme, and we will also see action.
Then, on the EU level, what we’ve seen, there’s the Green New Deal, which was announced via the European Commission at the end of last year and, in the course of 2020, we’ve seen continued commitment towards that Green Deal agenda. So, this is very promising, that if we have Europe, the US, UK, politically going into the same direction with the sustainability and economic recovery.
You asked about the circular economy and this is the area that I’m working on specifically at Chatham House, and it’s also one of the key pillars of the European Green Deal. There are a number of policies, as part of the circular economy package, which are being developed over the next year or two. We also see, in the UK, and the UK has its own circular economy package now that was designed and launched in July this year. Scotland has one of those, as well, already going back a few years. And so, within the circular economy, there has been quite a body of research that’s been done and analyses actually, which shows the economic value that it could capture. So, for the EU, for example, an estimate is more than €500 billion, in terms of value by 2030, but also, there’s an estimate that could create about 600 to 700,000 new jobs by 2030. There’s also the point that it could reduce costs of living and household spending, and then, linking back to the climate agenda, one estimate that it can reduce the greenhouse gas emissions from material use by 300 million tonnes of CO2 per year by 2050. So, there are multiple benefits, and now really is an opportunity to make a big push towards accelerating this transition.
Creon Butler
Thanks very much. I mean, the figures you cite are striking, and I guess, you know, coming at it from an economic perspective, I mean, how far will the market drive this anyway, given the things you describe, and how far do you need government interventions, either because there are market failures that you need to fix, or because, in the short-term, you know, even in a well-functioning market, it’s not going to move fast enough? Perhaps you could comment on those two questions.
Patrick Schröder
Yes, no, absolutely. So, policy support is absolutely necessary. One reason is because, currently, the market is skewed towards what we call the linear system, basically where resources are taken and produced and consumed, and then wasted at the end of life. So far, the majority of the economy is very linear, only about 10% of the materials we use are currently either being reused or recycled and go back into the production and consumption system, so there’s huge room for improvement.
However, yeah, as I said, the market does not necessarily favour circularity. Having said this, though, there are many, many very innovative and successful businesses, which already operate on circular economy principles, and these are, in a way, the winners. And I think, from the pandemic, those companies, which have been working with these circularity principles, improving resource productivity, reducing waste, generating value foreign waste, experimenting with new business models, which are more based on, for example, service rather than ownership models. I think they will emerge stronger out of the pandemic.
Creon Butler
Thank you very much. We’ll perhaps come back to, again, some of the practicalities of how you accelerate that change in the future, but, Elizabeth, if I could come back to you and maybe look at a more, sort of, concrete set of issues. You know, you’ve mentioned that, as well as the issue of empowering and involving older people, there’s also a question of, you know, making sure that women have a full – fully empowered role within the economy, and also young people. And those leads to two aspects of the Saudi G20 agenda, they don’t focus so much on aging, it’s not a major issue in Saudi Arabia, but they certainly have got a focus on women’s empowerment and young people. Obviously, at the same time, it’s a very controversial country to be doing both those things. So, I just wondered if you could say a little bit about your perspective on the Saudi agenda in this space, where you think it’s good and where you think it’s not so good. Thank you [pause]. You’re still on mute, I think, Elizabeth. Yeah.
Elizabeth Isele
There we go, sorry. I don’t mean to be critical to Saudi agenda, but I don’t think it goes far enough, in terms of women’s economic empowerment. One of the positive things about the G20 engagement groups that have happened this year is that more of them have line items recommending policies for women’s economic empowerment and young women’s economic empowerment. But I think we need to think about in the lar – definitely need to think about it in the larger picture and, again, it – rather than putting all these demographics in silos, we need to think about them across the silos. And, to stretch a little bit metaphorically the point of the circular economy, it’s – there’s nothing more circular than instead of discarding the older population’s experience and expertise, but to reintegrate that into the economy. And one of the specific examples of that, in terms of a datapoint is, people over age 55 worldwide, not so much in Saudi Arabia, but in every other aspect of the world, including the Middle East, people over 55 who start a business, whether it’s a microbusiness or a macrobusiness, 76% of those people’s businesses is still in business five years out, as opposed to just 20%, 6%, of young people starting a business.
So, that these businesses that the senior, and the majority of them are senior women who are creating these businesses after age 55, are creating jobs in their communities, they’re elevating the tax base in those communities and, even more significantly, regarding healthcare, and people are always, you know, worried that healthcare and unemployment is going to decimate the entitlement programmes of any country, seniors who are living longer and starting businesses are healthy longer. And so – and, again, there’s a lot of data out there that demonstrates that they are not going to be drawing down the healthcare system or the unemployment system, and they – again, it is circular, and that their expertise in starting a business helps young people who maybe cannot afford to take the risk, but they also cannot get a job. So, if they mitigate their risk by joining with a senior entrepreneur to start a business, then you have the beautiful intergenerational experience of young people contributing their social media technology skills to the older entrepreneur’s experience, and working with people, their sense of empathy, their organisational experience.
It’s a beautiful way of catalysing experiences across generations, which also has a profound effect of really boosting respect for other generations, and I think that’s really been lost in this world, and certainly in COVID, where people are desperate that the lack of respect for each generation, be it the older people, who are thinking younger people don’t care and are just cavalierly going out and gathering, and the younger people think that they have to be, you know, incarcerated in their homes, so they do not impact the older people.
But when you bring them together and you present them with a problem that needs to be solved, and each can contribute their expertise, it’s really remarkable, because, suddenly, the young people see the older people in a different light. I mean, and they – the older people have something concrete to contribute, and, likewise, for the older people thinking, “Wow, you know, these younger people do have a lot of knowledge that I don’t have.” So, it’s how can we work together because working together like that is going to produce a sustainable recovery. You won’t have it by dividing people up and everybody deciding, “Well, my area is going to recover successfully.” You have to think a bit more holistically as a society recovering and not just individuals or countries.
Creon Butler
Thank you. When Patrick was talking about the circular economy, he was saying that, actually, part of the challenge is that the most – at the present time, people think linearly, they don’t think secularly and, when you were speaking, it, sort of, had a similar echo, that people are not thinking necessarily about how one can engage older and younger people in new and innovative ways. I mean, is that right, is that part of the challenge, or do you think that it’s a different challenge, when you’re thinking of how government and business leaders work and, to the extent it is part of a challenge, what is the fastest way to change that mindset?
Elizabeth Isele
It definitely is linear thinking as opposed to circular thinking, and it is a huge challenge because we have all these stereotypes that we have to counter. So, the way we have found – the best way we have found to counter those is working within communities where they have innovation centres in that community, and we bring older people and younger people to the innovation centre, and that particular town or village in the community has a problem they need to solve. So, we bring the generations together to solve the problem, so it’s not just let’s bring everybody together to create a happy world. It’s let’s bring people together, tap into their expertise, to create a better world, a better community, and that’s the only way it’s going to be done. People will not do this just to be nice to one another, although that – you know, we should not be pursued in any way, but, particularly today, we need an economic imperative to bring people together, to solve some of these issues, and it’s all there. All the pieces are there, they just have to be connected.
Patrick Schröder
Just to add to this, actually, this links to some of the discussions within the circular economy discussion, as well. We often say we’ve forgotten how to repair things or how to reuse things, and there’s, I think, a wealth of knowledge in the older generation, how to apply these practices, and what we see are also social innovations, social initiatives, that emerge. Repair cafes, for example, which are also community – become community centres, points where the older and the younger generation exchange their experiences. And this is now interestingly funded by the Welsh Government as part of the recovery package, with the question, what can we do for the community, for our town centres? And there are calls for proposals to provide public funding for any ideas and initiatives, how to setup repair cafes or library of things for rental, not only with the objective to create a business, but also, to provide some community cohesion and bring life back into towns.
Creon Butler
Thank you very much. It’s fascinating how there is a, sort of, close parallel between these two strands. Patrick, perhaps I could come to you also on the specifics of the Saudi Presidency agenda, and, as you’ll know, there is, in that agenda, what is described as a circular carbon economy, and a number, I think, for, kind of, different elements of that economy, and it’s something that, at least it looks like, at the, sort of, ministerial level, will be agreed. I mean, I’d like to get your perspective on that. One can see why, from a Saudi perspective, it would be a good thing, to keep, you know, a continuing role for hydrocarbons, but is that – and we certainly do need hydrocarbons in the short to medium-term, but do you see this as a valid way of thinking about the circular economy or do you think this is taking us down the wrong route? Thank you.
Patrick Schröder
Yes. Yes, we’ve looked at the circular economy concept, and the various reports, which have been published around it, and really this presented as a holistic approach to address climate and to provide sustainable energy, etc., etc. However, having looked at these materials, to be blunt, we think it is not really aligned with the circular economy ideas of a extra systemic approach. We – yeah, to be quite frank, we think it’s a bit of a hijacking of the circular economy concept by indus – interests of oil-producing countries.
We know there’s a number of problems with this. We know it only looks at carbon as one of the resources. However, the circular economy, what underpins the – analytically, the circular economy is lifecycle thinking, which tries to look at not only one resource, but a whole range of different resources and to understand potential trade-offs between them. It also looks at the whole value chain of things, not just as a – to understand those trade-offs between these different stages of the value chain, and also to understand if, geographically, impacts are shifted. So, within the circular carbon economy concept, there’s a range of different technologies, but we think it’s mainly a technology push for what – a specific type of technology, Carbon Capture, Use and Storage, it’s CCUS. So, I mean, there are many issues around these technologies, in terms of additional energy use and they’re water intensive economically, they haven’t been viable so far. So, while there might be a limited role for them to play in decarbonisation or some heavy industry sectors for Saudi Arabia, to present this at the G20 as a solution that needs to be scaled up globally to address the climate crisis, we think this is a bit misleading. And, yes, that’s our perspective on this.
Creon Butler
Thank you very much. Do you think there are some aspects of it, even if the broader packaging is not appropriate, do you see some aspects of it that you think could be helpful, so if we didn’t take the entire package but some elements from it, or, I mean, is there any one particular aspect you would point to?
Patrick Schröder
I mean, some elements of the circular carbon economy, for instance, it includes renewable energy, it includes energy efficiency, there’s mentioning of hydrogen. So, these are all important parts, and yes, however, these have been developments, which are underway already, so it’s not quite clear what the circular carbon economy, as a concept now, or as a political agenda now, adds to that.
Creon Butler
Thank you very much. Well, what I’d like to do now is move to some questions from our audience, and I’m very pleased that we’ve already got some coming through. But if I could encourage everybody who would like to raise a question, please to put it into the ‘Q&A’, and try and keep it as short as possible, so that we can get as many in as we can, and thank you also for identifying who you are.
So, if I could go to one of the first questions, which is from Dina Mufti, and she says, “Jobs are being lost due to the increase in AI and automation. According to McKinseys & Company, by 2030, automation could displace up to one third of jobs worldwide. Could universal basic income potentially be the solution to the economic fallout from COVID-19, technological advancements and globalisations?” And she asks, “This could partially be funded by a universal basic income tax applied on gross profits of publicly-traded companies.” So, I think that’s a good question, and I’ve got my own views on that, but I’d like to put it to you first. What’s your view on the universal basic income? Thank you. Patrick, would you like to go first?
Patrick Schröder
[Pause] Oh, sorry.
Creon Butler
The question about universal basic income, I wondered…
Patrick Schröder
Right.
Creon Butler
Yeah.
Patrick Schröder
Yes, that’s an interesting question. I’m not an expert on this, however, I mean, we have moved into the direction, I think, so many people are on furlough schemes, and we see government support. So, there could be – I mean, it could be a potential solution, however, how to implement this, I’m not quite sure. I’m maybe not the right person to answer that, too.
However, again, coming back to also the starting point, as we are in a situation of transition, maybe that’s the right time also, to think about these questions. I mean, generally linked to the question also the expected job losses through AI and automation, that’s also a relevant concern or within the circular economy, because often what’s being discussed is the circular economy and the digital, and Industry 4.0, and those two developments are coupled with each other to achieve higher resource productivity, requires also application of digital applications and further automation and processes, etc.
So, the question really is not necessarily about – I mean, these job losses – I mean, it depends also now the question about skills, really, what are the skills that we need as we go forwards? And here, again, also I see now opportunities really to target – to have targeted government efforts to anticipate those new requirements in the jobs markets, and provide those schemes for retraining and reskilling to prepare the future generations, and the older generation, for what we’re going to encounter.
Creon Butler
Thanks very much. Elizabeth, did you – do you want to add anything on that?
Elizabeth Isele
[Pause] I won’t touch the universal basic income, but I think I would love to add some comments about the automation and artificial intelligence, and I think, again, and not to overly optimistic, but that is a fact, that one third of jobs are going to be lost. So, my next step is to think, well, how can we solve that, what’s the solution to that? And I think we also have an enormous problem, certainly in the United States, with academic institutions, colleges and universities, who, because the student body cannot attend in person, are losing reams of money. And so, at the same time they’re losing all that money, with students living on campus and studying on campus, they are advancing the technology for online courses. And so, why can’t those online courses, those same online courses, be used to solve the problem for – a specific problem is women in the workforce who have lost their job because of COVID, don’t know how long they’re going to be out of work, and are out of the office environment, where they’re learning these technology skills all along with their work.
If they could, while they’re working from home, receive the technology skills courses online that they need, so that, when their jobs are open again, they are really up to speed to go back to those jobs. There’s universities that are starting to think about that here in the United States. There’s actually a wonderful programme in London that the Mayor has begun, in terms of adult education and adult learning, and is doing exactly that, providing those online technology courses, particularly for women who are losing their jobs, to keep them up to speed.
And the other thing I would just come in on, I love artificial intelligence. I did a paper for Chatham House on that some time ago, and what I think about artificial intelligence is that I look upon it as all the new jobs it’s going to be creating. When we think about something even like opening the black box to get rid of the biases in the black box, we have incredible opportunity for people to come in as adjudicators about what is bias, what is not bias? The person who’s creating the programming in the black box may not even be aware of these biases. So, you have to bring in a real cross sector of individuals, young and old, to look at what’s coming out of that black box and determine whether it’s fair and equitable. So, again, I see it – I look upon it not so much as shrinking the job market, but really expanding it, with new, innovative opportunities.
Creon Butler
Thank you very much. I mean, I have to say my, kind of, instinct is very similar to yours, that every time there has been a major adjustment in the world economy in the past, massive sectors have disappeared, new sectors have reappeared, the economy, kind of, adjusts. The problem is the transition, and the reskilling that’s necessary during that transition. So, I think that is what we should focus on, and I think there’s also just a – if you like, an empirical question on what universal basic income does to incentives. I mean, there have been some big studies in Scandinavia, I think, trying to look at this, and I’m not sure that the evidence is very clear, but I think the one thing we can actually absolutely be sure about is that helping this transition, the reskilling, as some sectors disappear and some appear, is a definite win-win.
The other thing I would just say is that we – there is a, kind of, assumption that some of the sectors that are very, very badly hit by COVID are not going to come back. I think they’re almost certain to come back, whether it’s the art sector, or leisure, or to some extent, travel, as well. It might come back in a different form. The question is, when does it come back and what is the, sort of, damage that’s done to the economic infrastructure before that happens?
Well, let me move onto some further questions, and there’s one from Howard Hudson, who’s at the United Nations University, and he asks, what does the panel think of Ursula von der Leyen’s plea for a new European Bauhaus for a green transition? And he explains what a Bauhaus is, or at least Bauhaus here understood, ‘in terms of a social movement and design tradition rather than simple architecture’. Will that inspire people to really engage or mass with the circular economy, to build back better? I think one could also say will it also enable people to engage with the need to empower older people, younger people, women, and so on? But maybe, Patrick, if you go first, and then, Elizabeth.
Patrick Schröder
Yes. Thank you for the question. I think – I mean, yes, I think on the political level, on the new level, there – this will create definitely a momentum for the circular economy, and whether it’s going to inspire people is a different question indeed. I mean, generally, within the EU, there’s still a lot of scepticism about many things that are designed in Brussels, as we know, and so, to really get community involvement and support to build back better, etc., requires not only macro level plans by Brussels, but very specific initiatives by the member states, but then, also by more regional councils, regional governments and cities, to enable – to provide these spaces where people can actually become engaged. So, that’s, in a way, maybe something that’s so far missing. But, yeah, overall, generally, I think it’s the right direction, and we can – whether the circular economy becomes a social movement or not, and a new design transition, that remains to be seen, but I’m hopeful.
Creon Butler
Thank you. Yeah, I mean, I think, in a way, going to your original point about circular versus linear, you know, if normal economic signals and levers aren’t working, one needs, if you like, a cultural movement to bring about that kind of change. Elizabeth, any thoughts on this question? I think you’re muted again, yeah.
Elizabeth Isele
The – in terms of a social movement, I think you really, again, have to have an economic basis for that. it sounds a little paradoxical, but I think, unless you give people a reason to join together and collaborate to make change happen, they have to, number one, understand what that change needs to be, and number two, they have to understand what the impact of that change is going to be. So, it’s not just a social movement in theory, it’s a real, proactive social movement, and it’s not something where we can just write research papers on it and say, “Well, yes, this is the way the world should be.” We need to actually come up with an action plan that is fundamental to the social movement in order to move it ahead, out of the world of theory, and into the world of reality.
Creon Butler
Thank you. Yeah, I think that makes a great deal of sense. I – when you look at other social movements, including in the area of, sort of, women’s rights, even the Black Lives Matter movement and so on, is there anything that you would take from that and say, you know, this is an essential part of the kind of transformation we need, and how we can underpin this new economic thinking?
Elizabeth Isele
Yes, I think those movements, again, are – they’re certainly socially driven, but they’re economically driven, Black Lives Matter because they have been so repressed and have really gotten the short stick in just about everything, in terms of – regarding their lives, so we have to lift their economic face. We – and it’s the same parallel with women, and women, you know, the fact that the – it’s another 200 years before we achieve parity in women’s income is just absolutely absurd.
So, it’s like – it sounds crass to say that there has to be a real win-win for people, and it’s not just a social win. Social is fantastic, and it’s beautiful, but, unless it’s – it has a foundation of economic reality, it’s like people, when we first start talking about Black Lives Matter in this country, and I would go to Senate hearings in the United States about, you know, how can we solve this problem, and, you know, this is – you know, talk about the huge ramifications of the Black repression in this country. And the simple, simple answer is economic, and if people stood up and said it over again, just give these people jobs. They don’t want charity, they don’t want a handout, they want a hand up. Help them get the education they need, so that they can get a job and get their self-respect back.
And, horribly, I think a lot of that saying applies to the people that voted for Donald Trump. Nobody was paying attention to this demographic in rural America, which has been devastated economically for a long time, not just from the pandemic, but people are leaving rural America in droves, and nobody, prior to this, has really focused on that. Trump focused on it and he really built it into his own kind of a movement, and now it’s our challenge to integrate those people of that demographic and their needs into American prosperity overall, but it’s the same thing, I just keep coming back to.
And I love the fact that the word ‘economy’ itself comes from the Greek word ‘oikonomia’, which means household management. So, we just – if we can manage our households, then we can achieve all manner of things, and, again, for my own particular bias, for thousands of years, it’s been women who are managing the households. So, let’s give them more opportunity to do that, in a broader perspective, so I’m a classicist at heart, too. So, I love that it comes from that. So, it’s probably much more than you wanted to hear on the subject, Creon and Patrick, and the rest of the guests.
Creon Butler
Thank you very much.
Elizabeth Isele
Yeah, yeah.
Creon Butler
Thank you very much. That’s a very, kind of, clear answer. Maybe now I could come back to some further questions, this time for Patrick. Luke Simpson in the UK Department of Health and Social Care asks whether you can share some specific examples of how the field – the economic field is tilted towards the linear economy rather than the circular economy and, you know, what specific actions by policymakers would push it in the circular direction?
Patrick Schröder
Yes, thank you for the question. Maybe there’s a couple of examples. One would maybe link to electronics and general – yeah, generally other goods. At the moment, so the linear system is very much based on the principle of planned opt lessons. So, a lot of products are designed in the wrong way, that they don’t last very long, and they break easily and need to be replaced. So, in the circular economy, that concept or that business model needs to change.
So, in some – to some degree, on the EU level now, what is happening, there is the sustainable product initiative, which has started. The consultation phase is open at the moment, and this sustainable product initiative is going to replace the Ecodesign Directive end of next year. So, this will have implications on criteria for products, how they are being designed, and will include, hopefully, a number of criteria for repairability. And this should shift the balance a little bit towards more sustainable use of materials and reduction of waste and resources.
Another issue is maybe if we look at plastics, because that’s been the focus for quite a while, and one of the priority areas is with the circular economy. At the moment, the market for virgin plastics, so the market’s skewed towards using virgin plastic materials, and the cost for high-quality recycled materials is still too high, and the – like, the low oil price that we see at the moment doesn’t help the situation. So, we see a lot of investment still going into petrochemicals and primary plastics production. So, there’s – this is completely unbalanced, in terms of creating a circular plastics economy. We need to see a lot more investment going into product – recycling facilities, but also, new models around reusable plastics, and the business model around it. Also, in terms of how retailers use plastics as new interesting things coming up, packaging as a service, so any policy that can support these developments would be very useful.
Creon Butler
Thank you. It, kind of, raises a question that how did we ever get into a world where planned obsolescence was acceptable? I mean, there is an element of it which is, you know, if you want to have new and innovative products and so on, clearly older products need to be moved aside to have new and innovative products, but, I mean, that should just happen naturally.
I mean, in the – in your work on this, where did planned obsolescence come from, and do you think the – to the extent it’s a market failure, and this goes to a question that Antoine Rondalez has asked, which is essentially, “How do you think governments’ actions should be made more aggressive in the fields of innovation in laws and regulations, in order to improve the internalisation of externalities, and bend it more in a circular shaped way?” So, question, how did we get here in the first place, and is the only solution aggressive legislation or regulation?
Patrick Schröder
How did we get here? Yes, I’m not sure exactly how we got here, but it’s probably linked to a number of factors, but it’s – I always tend to look at it from the perspective of consumerism. So, I think this – the paradigm in which we are, this is problematic, and this drives unsustainable production and consumption systems in a way we seem to be on a hamster wheel, where this turnover of new products and materials.
I mean, we see this in how it’s manifested in many different sectors, for example, the fast fashion sector. This is not where we have something like 20 different seasons in fashion every year, very – basically, very low-quality materials, which often can be only worn a few times. But, again, with the pandemic, I think we might have seen some kind of change in not only the viability of the model, but also, in terms of consumers, just because of the demand destruction that we’ve seen. The impact on fast fashion brands has been quite significant, but unfortunately, also the impact on the manufacturers in South Asia, for example.
So, it is not only one factor, but it’s linked to the overall, as I say, consumerism, but also, maybe the global development model that we’ve been promoting. So, the import or the export-led development model as a way for developed low and middle-income countries to develop industry and manufacturing. So, yeah, it’s a big shift that we need to achieve, and the way we need to do this is in a just transition as we use the term. So, we need to consider also the countries and the industries, which for that – which might be losing out in this transition, and provide some – and this is where policies come in. They don’t necessarily need to be aggressive. They need to be smart and inclusive and, in that way, we can achieve a transition that works for everyone.
We also try to link it to the SEG Agenda, leaving no-one behind, just through the global value chains, we’re all interconnected. So, Europe moving to a circular economy, the UK moving into a circular economy, automatically requires close co-ordination with the trading partners across the world.
Creon Butler
Thank you very much, Patrick, and we’re coming towards the end of our time, but we have a further question from Joanna, and I wonder if I could put this to you, Elizabeth, at the outset, which is she combines the circular economy discussion and the gender inclusive discussion, and she says, “Could you – could some – could you provide some specific examples of opportunities the pandemic might create for accelerating the move to a circular economy in a gender-inclusive way?” So, Elizabeth, I wonder if you could have a go at that question.
Elizabeth Isele
I’d be happy to do that. In fact, last September, we just published in the Gender and Growth Initiative at Chatham House a strategic action plan, which really is an incredible plan that focuses on inclusion, gender inclusion from COVID-19, and it’s based on the three priority areas are: revisions in childcare and family care, and education for women, and a whole avenue of opportunities and entrepreneurship for women that are going to be boosted because of the impact of COVID-19. So, if you cannot access that paper, feel free to email me directly at just my name at gmail.com, and I can send you the link to that.
The most important aspect of that paper, again, is that it provides solutions, but it also provides examples, the work around the world, in all these different areas. So it has a tremendous amount of different resources that you can tap into, and we’re hoping the G20 will tap into, in terms of we’re not just presenting ideas, but we’re actually presenting the data that demonstrates that it works, and then providing examples of how it works worldwide.
Creon Butler
Thank you very much. Well, unfortunately, we’re almost at the end of our time, and I just wanted to leave you both with the same question, which is, we’ve talked a lot about the Saudi G20 Presidency, but, as I mentioned at the start, you know, we’re almost at the end of that period, and you have President Trump still taking the US position. When we look to next year, we’ll have President Biden, a much more positive approach towards multilateralism, much more prospect that the G20 will be able to tackle some of these issues. So – and if you look at the Italian agenda, I think certainly they have already got strong elements of the circular economy, and certainly, my judgment in the basis of what they’ve done previously in their G7 and so on, is that women’s empowerment will also be an important issue. But if you were to, sort of, highlight some spec – one or two specific points that you would want next year’s G20 to champion and to promote, what would they be? And, Patrick, you go first.
Patrick Schröder
I think you already said it. The – we would like to see, basically, the circular economy, as we work with it, as we know it from the EU and other contexts, not only the EU; China also has circular economy law, and many policies in place.
Creon Butler
But any specific things, so, you know, in the…
Patrick Schröder
Right.
Creon Butler
…as a…
Patrick Schröder
Okay.
Creon Butler
…the summit year, it’s all about the deliverables. Any particular deliverables?
Patrick Schröder
Yes, maybe – and very specifically, maybe on the trade issue of the circular economy. So far, there’s not much clarity on others who work in the international trade system. And their efforts in the way in the WTO, so linking the trade and environment agenda more closely, yeah, maybe this could also be supported by the G20 next year.
Creon Butler
Thank you, Patrick, and, Elizabeth, your chance.
Elizabeth Isele
My chance. I would ask, then, to follow António Guterres at the United Nations last fall, when he said, “We must learn how to tap into the expertise of people over 50 because that is how we will achieve the Sustainable Development Goals.” So, I would like more a broader picture of aging at the next G20, a broader picture of inclusion that includes aging, and women, and it – not just as parts of people’s programmes, but as a major initiative.
Creon Butler
Thank you. Well, that brings us to the end, and I would like first to thank our audience for being with us and for giving us such a good set of questions. I’m sorry we didn’t have a chance to get to all of them, but very much appreciate your engagement, and also, particularly if I can thank Elizabeth and Patrick for giving us their time and their expertise. I found it a fascinating discussion. I think, you know, this is really the way to go, in terms of future summit priorities, and I appreciate also, the quite specific ideas at the end. So, thank you, again, thank you both, our expert speakers, and thanks to the audience, and we look forward to seeing you all at the next members’ event, so thank you very much. Bye, everybody.
Elizabeth Isele
Thank you, Creon. Thank you, Patrick.
Patrick Schröder
Thank you. Thanks, Elizabeth. Thanks, Creon.
