The Circular Economy

A User's Guide

Walter R Stahel

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429534911
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

A Circular Economy seeks to rebuild capital, whether this is financial, manufactured, human, social or natural, and offers opportunities and solutions for all organisations. This book, written by Walter Stahel, who is widely recognised as one of the key people who formulated the concept of the Circular Economy, is the perfect introduction for anyone wanting to quickly get up to speed with this vitally important topic for ensuring sustainable development. It sets out a new framework that refines the concept of a Circular Economy and how it can be applied at industrial levels.

This concise book presents the key themes for busy managers and policymakers and some of the newest thinking on the topic of the Circular Economy from one of the leading thinkers in the field. Practical examples and case studies with real-life data are used to elucidate the ideas presented within the book.

1 The circular economy, roots and context

Circularity has been the guiding principle of nature since the very beginning. Early man lived in a circular society of scarcity and dearth, a non-monetary circular society driven by necessity, which still exists in many industrially less developed regions of the world. The objective of the circular economy is to maintain the values, and manage stocks, of assets, from natural, cultural, human, manufactured to financial stocks. People in the circular economy of scarcity are driven by need, no other motivation needed, and it is the most sustainable post-industrial economy business model available.

1.1 History

The circular economy always had the objective to optimise the use of objects, not their production; to preserve the use value of stocks of objects, components and molecules at their highest utility and value levels; and to profitably manage these stocks in competition with other economic options. Natural cycles, by contrast, have no purpose or objective, no monetary or cultural constraints.

The historic development of the circular economy as an additive process over time is shown in Table 1.1. Today, various forms of circularity, circular society and circular economy exist in parallel, intertwined and in competition with the linear industrial economy.

Table 1.1 Evolution of parallel phases of circularity

	CIRCULARITY	CIRCULAR SOCIETY	INDIVIDUAL CIRCULAR SOCIETY	CIRCULAR INDUSTRIAL ECONOMY (CIE)
TIMELINE
STARTED BY	FOREVER	MANKIND	INDUSTRIAL MAN	INDUSTRIAL FIRMS
DRIVERS	NATURE	BELIEFS, CULTURE, TRADITION (AMISH)	NECESSITY, GOOD HUSBANDRY	MAINTAINING VALUES, EFFICIENCY IN USE
ACTORS		GROUPS	INDIVIDUALS	FLEET MANAGERS
EXAMPLES	WATER CYCLE, CARBON CYCLE	SHARED USE, COMMONS, TRADITIONAL DRESS, PUBLIC LIBRARIES,	SENSE OF CARING, REUSE OF GARMENTS, COLLECTORS’ ITEMS, MAINTENANCE	SERVICE-LIFE EXTENSION, REMANUFACTURING OF GOODS & COMPONENTS, RECOVERING MOLECULES
VALUES	IMMATERIAL	NON-MONETARY	PERSONAL	MONETARY
IN CONTROL	NATURE	OWNER-USERS	OWNER-USERS	OWNER-MANAGERS
CIRCULAR ACTIVITIES	FORESTRY, AGRICULTURE	SHARING SCHEMES	DO-IT-YOURSELF, REPAIR CRAFTSMEN	RENTAL SCHEMES, LEASING, EU RAIL POOL
RANGE	GLOBAL	LOCAL	LOCAL	OBJECTS REGIONAL, MOLECULES GLOBAL

Circularity has been the guiding principle of nature since the very beginning. The same molecules have been used, dismantled and reused in cycles, a giant LEGO, enabling fauna and flora to adapt to changing conditions by developing a growing biodiversity. But circularity in nature cannot recognise manufactured objects and objects made from manufactured materials as “bad”: micro-plastics in the oceans will be eaten by fish, which may become food eaten by people. Similarly, salt harvested from the sea through evaporation, which gourmets prefer to rock salt, contains micro-plastics; nothing is ignored in nature. Mankind has a moral obligation to retain the control of manufactured materials and objects, which nature cannot decompose, in its own interest.

Early man lived in a circular society of scarcity and dearth and made the best use of available natural resources and existing objects in order to survive, as expressed in the old New England maxim:

Use it up, wear it out, make it do or do without.

Circular societies driven by necessity still exist in many industrially less developed regions of the world.

Non-monetary sharing was an integral part of a circular society of necessity – witness the Commons in many villages hundred years ago. Repair cafés are a modern form of the sharing society: people with broken objects regularly meet people with expert knowledge and the necessary tools to repair objects and discuss life. A sharing society makes sense for working people at all levels:

initiatives in science encourage pooling surplus reagents, sharing equipment or keeping better tabs on lab chemicals to avoid duplication. These exercises are about helping science as much as helping the planet. They free up resources that can be applied for scientific purposes.

(James 2018)

Wasted materials are also wasted money.

The development of skills and capabilities gradually allowed humankind to better exploit the available natural resources; social and cultural innovation, new tools and technologies further improved its quality of life. Two hundred and fifty years ago, the industrial revolution allowed people in many regions to overcome scarcities of food, shelter and clothing, by exploiting the opportunities of a linear industrial economy, but today the downsides of the linear industrial economy are overwhelming.

The downsides of the linear industrial economy are today one of the drivers of a shift towards the circular industrial economy detailed in the following chapters of this book.

1.2 The realm of the circular economy

The circular economy is the most sustainable post-production business model. It uses natural, human, cultural and manufactured stocks to improve the ecologic, social and economic factors that make up sustainability. But the circular economy is not the only smart and green strategy available.

‘Greening of Industry’ concepts (Saikku et al. 2015), like Industrial Ecology and Industrial Symbioses, involve cascades of reusing wastes from production processes within the linear industrial economy. These concepts manage production waste, reduce the environmental impairment and increase the economic efficiency of production. But their aim is not to maximise the use of physical assets: closed loops of water or heat would often be more resource efficient than a cascading use of excess heat or water. Yet to reduce production costs, the linear industrial economy also uses such circular economy strategies as repair and preventive maintenance services for its production machinery and equipment. By hardening the steel blades of buckets used in mining, for instance, it reduces down-time and wear and tear, extends the overall service-life of the buckets and reduces production costs.

In the late twentieth century, efforts started to green industry. A number of new fields of research arose, with the aim to optimise the supply chain of production and value added up to the point of sale.

In fact, industrial waste is a double financial loss, in the form of resources lost and waste management costs, both for energy and materials. It is therefore amazing that economic actors in the linear industrial economy need to be motivated to prevent waste.

Waste prevention is also a cultural issue because waste can be regarded as economic inefficiency. To promote waste prevention in countries, which are proud of their production efficiency, like Japan, it can be sufficient to point out to managers that waste is inefficient and they are therefore behaving in an un-Japanese way – a near insult.

The efforts of greening industry have several origins, objectives and inventors:

• Industrial ecology is a young science that studies industrial systems with the goal of finding ways to lessen their environmental impact, to learn how industries can use industrial ecology to reduce their consumption of natural resources and generate less waste.¹ Thomas Graedel was one of its founders. This concept can be extended to end-of-pipe sectors, such as municipal waste water treatment plants recovering phosphorous, which can be reused as fertiliser.
• Industrial symbiosis is an association between two or more industrial facilities or companies in which the wastes or by-products of one become the raw materials for another, in a linear cascading approach; its lighthouse example is the Kalundborg eco-industrial park. Pure gypsum is a waste product from coal-fired power stations which can be directly used as a resource by plaster board manufacturers instead of natural gypsum. Industrial symbioses is vulnerable to structural change; if plasterboard manufacturers are forced to take back their products, they may give preference to reuse their used products instead of the gypsum waste from power stations.
• Industrial metabolism was proposed by Robert Ayres in analogy to the biological metabolism as ‘the whole integrated collection of physical processes that convert raw materials and energy, plus labour, into finished products and wastes’.
• Cleaner production is a preventive, company-specific environmental protection initiative. It is intended to minimise waste and emissions and maximise product output.

The construction industry is the biggest buyer of resources, and has become a leading greening industry: the reuse of materials instead of disposal is today the preferred option in most new infrastructure projects.

Building the new 57 kilometres long Gotthard rail tunnel – the world’s longest – produced the equivalent of five Giza pyramids of mining waste,² which were used as raw material to build the new (infra)structure of the project, including spray-concrete for the tunnel itself. Of the 28 million tonnes of rock excavated, 15 kilograms were delivered to the Swiss post office, ground into fine powder and, using a special paint, integrated into a special issue of postal stamps named ‘Gottardo 2016’. The hot water of sources inside the tunnel is captured and used by a new fish farming industry near the tunnel entrance – a cascading use of natural resources (NZZ 2016).

Similarly, 98 percent of the seven million tonnes of material excavated in building the new Elizabeth Line in London has been reused in quarries, a golf course, a farm and nature reserves along the river Thames (Explore 2018).

Other approaches define a circular economy by using different criteria, such as loops or policy areas.

The famous butterfly diagram developed by the Ellen MacArthur Foundation, for example, takes a resource view and distinguishes between loops of the Biosphere (Foster 2018), such as regenerative agriculture (circularity in Table 1.1) and loops of the Technosphere, the circular industrial economy (Ellen MacArthur Foundation 2013).

Some policymakers see similarities in the policy areas between bioeconomy and the circular industrial economy of manufactured objects and molecules. However, according to a 2018 European Environment Agency Report (EEA 2018), ‘the increasing demand for food, feed, biomaterials and bioenergy resources could worsen the present overexpl...