A ‘circular economy’ (CE) offers huge business opportunities by transforming the way resources are used. A new Chatham House paper, A Global Redesign? Shaping the Circular Economy, argues that in a world of volatile resource prices, efficient use of resources is critical to future economic competitiveness– for countries and companies alike.
Central to the CE is the idea that open production systems – in which resources are extracted, used to make products and become waste after the product is consumed – should be replaced by systems that reuse resources and conserve energy.
Today, the recycling of many materials does not occur beca use it is uneconomical relative to the production of virgin material. With incentives that encourage careful planning all the way from the product design stage to the consumer, the economics of recovery and reuse could be transformed.
The author, Felix Preston says:
‘Cheap resources underpinned economic growth for much of the 20th century, but in the last eight years prices have returned to heights not seen since the 1900s – and they are expected to remain high and volatile for at least the next 20 years. To meet this new resource price reality, resource efficiency must be developed if the world is to maintain and increase prosperity.’
A switch away from standard ownership models can fundamentally alter the relationship between producer and consumer. Rental or pay-as-you-go contracts are now an option for customers in sectors where a few years ago they barely existed. The ‘Collaborative Consumption’ website’ provides hundreds of examples in music an d other media, household DIY equipment, toys, textbooks, fashion and art.
The proliferation of these approaches is enabled by the internet, but it is also driven by the desire to save money, by convenience, and by environmental and social awareness.
At the global level, a CE could help enable developing countries to industrialize and developed countries to reduce vulnerability to resource price shocks – but without placing unsustainable pressure on natural resources and breaching environmental limits.
The CE would mean a radical shift in how materials are used throughout the economy. With the right incentives, innovation will deliver more sustainable materials – plastics, for example, would increasingly be derived from plants rather than fossil fuels. Nanotechnology and biotechnology have the potential to deliver materials with increased strength, reduced weight and other useful properties. At the end of the product’s life these materials would biodegrade.
Notes to Editors
Felix Preston is available for interview.
Email [staff 52794].
Phone: +44 (0)20 7957 5741