Visualise taking a straight line and bending it inwards on itself until the end points meet to form a circle.
This mental image depicts, on a highly simplified scale, the envisaged evolution from the existing linear economy to an insular one in which materials, energy and resources are fed back into the loop – a circular economy (CE).
The CE, a generic system concept that has been developed by several schools of thought, including the industrial economy and regenerative design, is based on three principles.
First, it relies on the redesign of polymers, alloys and other man-made compounds in such a way that they can be composted or fed back into the industrial process as crude feedstock.
Second, the CE aims to keep material and products in use for as long as possible rather than promoting the manufacture of products with a distinct end of life.
Finally, CE proponents argue that this model allows the regeneration of natural ecological systems.
It looks to “engineer out” waste materials across the economic supply chain, keeping materials that are traditionally considered waste products within the economic lifecycle.
Ultimately, the CE model aims to decouple economic growth from natural resources and ecosystems by using those resources more effectively, thus creating an economy that’s restorative and regenerative by design.
In terms of energy, systems should ultimately aim to run on renewable energy – enabled by the reduced threshold energy levels required by a restorative, circular economy.
Describing the existing linear economy as “ripe for disruption”, Ellen MacArthur Foundation CEO Andrew Morlet says most materials used in the current economy aren’t designed for post-use recovery, which is foundational to the CE model.
“We need to look beyond the ‘take, make and dispose’ extractive industrial model, which relies on large quantities of cheap, easily accessible materials and energy.
By relying on system-wide innovation, CE aims to redefine products and services to design waste out, while minimising negative impacts,” he told a conference in Johannesburg in September.
The financial upside
Linda Godfrey, principal scientist at the Council for Scientific and Industrial Research (CSIR), says that at least R17bn worth of valuable secondary resources such as viable polymer, fibre, metal, glass and organics are lost to the South African economy as waste, disposed of to landfill.
According to a 2012 World Bank report, global cities currently generate about 1.3bn tonnes of solid waste a year. This volume is expected to increase to 2.2bn tonnes by 2025.
Locally, studies conducted by the CSIR on behalf of the department of environmental affairs (DEA) found that, as of 2011, SA has been generating an estimated 108m tonnes of general and hazardous waste a year, of which 90% is disposed to landfill.
“In SA, we’re bad at keeping materials in flow,” Godfrey tells finweek. “It’s easier and cheaper to send things to landfill. We’re seeing viable materials and nutrients being lost to the SA manufacturing sector and being put into a hole in the ground.”
The most significant early gains around reducing waste materials could be achieved in industries that are considered among the most prominent material users, such as cement, steel, forestry and agriculture.
Godfrey is, however, quick to emphasise that the CE is about more than simple waste management or recycling.
“Obviously there are immediate gains in waste as a secondary resource sector, but that’s only a tiny fraction of the opportunities for the CE in the SA economy,” she holds.
The SA model
But just how viable is the CE model in the complex SA environment?
“That’s the big question, because I think that we’re at a point where it’s no longer ‘Can we?’ but ‘How do we?’ We know that we face a future of material scarcity and that, within this generation, we’ll see the end of certain resources.
The CE model has only just arrived in the discourse in SA… but we absolutely need to domesticate it right now,” Godfrey says.
She adds that local success would hinge on the development of a CE model for local conditions rather than “plugging and playing” from elsewhere.
The CE model has already received buy-in from the DEA – at least perfunctorily.
Minister of environmental affairs Edna Molewa told a conference in May that SA had adopted the CE model as one of its sustainable development models, but acknowledged that the lack of a concrete, coherent, and strict legislative framework often prevent companies from incorporating green principles into their operations.
“Product designers are not waste managers and have no strong reasons to incorporate end-of-life considerations into their products.
The circular economy therefore requires integrating the entire product life cycle from raw material extraction to disposal (or preferably reuse and recycling).
“This can be done either through intensive collaboration between companies or single ownership of the product chain or even through legislation that force manufacturers to consider the cradle-to-cradle principle in their products design.
The circular economy, ladies and gentlemen, is a trillion-dollar opportunity,” she commented.
Molewa also spoke of the complexity of linking up the envisaged production chains of various industries to ensure a closed, circular system.
Perhaps the most positive indication of government’s move towards a systems approach is the prioritisation of the four waste streams for tyres, paper and packaging, lighting and electrical and electronic wastes.
“While implementation of the circular economy is still relatively new in South Africa, the country’s tyre industry serves as an important case study of how CE can successfully turn ‘waste into worth’. As a result, in the past few years it has succeeded in generating new jobs, establishing a number of viable small businesses, and recycling a growing percentage of South Africa’s waste tyres,” Molewa said.
This is a shortened version of an article that originally appeared in the 2 November edition of finweek. Buy and download the magazine here.