The circular economy as a solution to the resource crisis

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Serious conflicts will arise if the economy does not rethink its approach to resources. Experts from all over the world firmly believe that the solution could lie in a circular economy. They discussed how this can be achieved at the World Resources Forum in Davos.

Yvonne von Hunnius (Davos), 15.10.2015

If the current high standard of living is to be maintained in developed countries and made possible one day in developing countries, resources must be used more carefully. Switzerland alone consumes 140 million tonnes of raw materials per year – less than half of these resources originate from our own country. Thus 60 percent of the environmental impacts generated through the production and processing of goods consumed in Switzerland arise abroad. Studies show that poorer countries are increasingly affected by the growing scarcity of resources and the environmental impacts arising from their extraction. Meanwhile, richer countries reap the benefits. “With the growing global population, today’s handling of resources creates conflicts – including military ones,” said former European Commissioner for the Environment Janez Potočnik at the World Resources Forum (WRF), which took place from 12 to 14 October 2015 in Davos. As one of the members of the International Resource Panel, he came to Davos to debate the possible responses to the resource dilemma.

Resources – the essential basis

Davos becomes the centre of the global economic universe every winter when decision-makers convene at the World Economic Forum (WEF). Those who already look to Davos in autumn recognise how crucial the question of resources is. The WRF is an annual get-together of the top experts on issues concerning resources. This year, 550 experts – scientists, businessmen, and representatives of governments and organisations – from 110 countries assembled there. Their credo: a circular economy could bring about the necessary turnaround. What is meant here is an industrial economy that requires not only fewer resources but is also based on recycling. This view is gaining increasing momentum: the global think tank Club of Rome has shown that relevant savings in terms of CO2 emissions could be achieved through a circular economy. The European Commission has also announced an ambitious strategy for a circular economy.

However, the decision to adopt a circular economy means more than reprocessing and recycling. WRF President and materials expert Xaver Edelmann says: “Material and product flows must be organised in cycles so that resources are not destroyed and the volume of waste disposed of is reduced significantly.” Instead of linear thinking, cyclical thinking that takes the true value of resources into account is required.

Innovation – the basic prerequisite

Innovation is needed first and foremost to enable this model to take off. Researchers must optimise recyclable materials and develop products whose elements consist of replaceable modules. One of the pioneering companies in this regard is Stoll Giroflex from Switzerland which produces completely recyclable office chairs.

These ideas can only bear fruit if materials find their way back into the circle. Political conditions can promote this process. In addition, creative solutions must guarantee profitability. At the WRF, Dutch scientist Arnold Tukker predicted that: “Soon, I will no longer buy LED bulbs but light. We will have to develop completely new business models.” Property will assume a new value and the focus will be on services that are made possible through product leasing, for example. US carpet manufacturer Interface developed corresponding concepts a considerable time ago. According to the experts this approach has a very promising future, in particular for investment goods like machines.

Added value is attainable

The problem of electronic waste alone highlights the obstacles that lurk here. According to estimates, 40 million tonnes of such waste was produced in 2014 alone, and only a small proportion of this ends up back in the production process. And new business models must incorporate one particular factor: ensuring that all participants are given a fair share in the added value generated by a circular system. According to the estimates calculated by management consultants McKinsey, if the circular economy takes effect, it could mean a trillion dollars in revenue and 100,000 new jobs for the global economy.

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Last modification 21.10.2015

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