• Circular Eonomy
• circular economy research
• circular economy academics
• Walter Stahel
• what direction for research in circular economy
• manufactured capital
• natural capital
• Circular economy ROI
• Circular economy Macro-economics

A personal reflection from Walter Stahel. 

Honorary President of IS4CE (2020)

A truly International Society for Circular Economy will have a global research-led agenda and be able to integrate different cultural CE focuses. For instance, some regions emphasize resource efficiency and social solidarity, whereas the People’s Republic of China gives priority to economic competitiveness in remanufacturing. Singapore excels in a closed loop of water resources, turning waste water into NEWater of a quality fit for the drinking water system.

Yet one common denominator of all CE efforts is to prevent waste by maintaining the value and utility of durable objects and perishable produce, and the value and purity of molecules. The CE is like a lake; of course there are currents in lakes but overall the stock of water shows little changes in quality and quantity. This also means that great care should be taken as any pollution will take a long time to be diluted or washed out naturally. The heritage we leave to our children are stocks; the daily CO₂ emissions of past and present generations are accumulated as carbon stock in the atmosphere, daily plastic waste in the oceans. 

By comparison, the linear industrial economy is like a river; rivers experience great and rapid changes in flow volume (throughput). Any changes in quality (pollution) will be rapidly washed downstream and as flows, hardly affect our children’s heritage.

A word about contexts for a circular economy.

Physical Assets
It is helpful to distinguish between the objectives of a (non-monetary) circular society and a (monetary) circular economy. Both are based on a caring attitude and contribute to maintaining the value and utility of natural, human, cultural, manufactured and financial capitals or assets for the longest period of time, using different tools and strategies.

Natural capital: regenerative management by intention is appropriate for volatile natural resources ruled by Nature’s circularity, as in regenerative agriculture and regenerative medicine. But natural biodiversity maintains its value by human non-action, rarely by design. The question is open if the bio-technic pathway is part of Nature’s circularity. The EU definition of bioeconomy includes fish and game, rocks, timber, leather and wool, which can be dealt with by natural circularity, but possibly also new materials resulting from synthetic biology and gene editing.

Human assets: the only resource with a qualitative edge, these assets can be greatly improved through education, training and employment, but deteriorate rapidly if unused.

Cultural assets: the UNESCO world heritage register first listed only physical assets, but has now been extended to include also immaterial assets (scientific knowledge, traditions, music). Commons are difficult to restore, witness plastic in the oceans or the fire of Notre Dame de Paris, so prevention is the winning strategy. But prevention is an upfront expense often considered too costly.

Manufactured capital: the mass-produced man-made objects and synthetic materials of the Anthropocene are the main focus of the circular industrial economy. Maintaining the value and utility of objects in the era of R (repair, refurbish, remanufacture etc) uses known methods and is best done through local service activities; maintaining the value and purity of molecules in the era of ‘D (depolymerise, dealloy, delaminate etc), is a different cup of tea. Society has long ignored this task; industry is only slowly learning how to design circular molecules or mark them for recovery. Developing and exploiting research opportunities in innovations of circular energy, circular chemistry and circular metallurgy (the ‘era of innovative materials, components, systems’) combined with a policy of full producer liability will prevent a repetition of today’s legacy waste of the Anthropocene.

Synthetic man-made materials, which include agrochemicals, pharmaceuticals, plastics and manufactured objects made of these materials cannot by digested by Nature’s circularity and thus imply a man-made liability over their full product-life.

Immaterial or invisible assets and liabilities
Invisible assets include financial capitals, but also water and materials consumed, and CO₂ emitted, during mining, manufacturing and distribution activities. These resources are embodied in the final objects and preserved as long as the objects exist. In addition, immaterial topics to be considered are liabilities, digital data assets and behavioural issues.

A full producer liability will shift the present extended producer responsibility from the soft Corporate Sustainability Reporting to the annual Financial Statements of Balance Sheets and Assets and Liabilities, which are the focus point of financial investors.

From a behavioural science point of view, it is further helpful to distinguish between

• Stocks of volatile natural resources, which ‘lose’ their physical property when ‘consumed’, such as food, water and energy (which are transformed, not lost, of course) and should be consumed sustainably, and
• Stocks of durable owned assets, which should be used sustainably (man-made objects and materials) and can be reused in managed loops,
• Stocks of durable common assets, which should be managed with stewardship (global Commons such as rainforests, biodiversity, culture, oceans, space),
• Stocks of invisible and immaterial resources such as digital data, liability and possibly also such topics as Carbon Capture and Utilisation (CCU).

Immaterial or invisible assets and liabilities also include the “IT software-data-hardware economy”. Tractors, which are physically fit but cannot be repaired because the software source code is blocked by its manufacturer ignore the owner-users’ right to repair. Smartphones, which were upgraded to function less well when the next generation came to market, have been declared as planned obsolescence by the French government and the manufacturer Apple hit with a fine of 25 million Euros. This, incidentally, opens the door to class action suits by the owners of the remotely manipulated smartphones.

I want to turn now to the major fields of science potentially contributing to expanding the pool of knowledge surrounding the CE:

In a first step, I would suggest going into a dialogue with scientists, looking for hidden doubters and persuaders, breaking out of “silo discussions”. A holistic approach will probably mean to take into consideration simultaneously natural, human, cultural, manufactured and financial capitals.

For some disciplines, this could (should?) be done in parallel for the legacy waste of the last 50 years and the vision of zero waste / carbon (prevention of future ‘waste’). The following are just food for thought suggestions I have come across:

• Theoretical physics (e.g. entropy, second law of Thermodynamics)
• Applied physics (e.g. molecular machines, photocatalytic water splitting)
• Biology, biophysics and biochemistry (e.g. engineered enzymes)
• Chemistry (e.g. circular chemistry, constructed molecules, CCU)
• Energy (e.g. ‘circular’ energy, clean hydrogen)
• Metallurgy (e.g. circular metallurgy, marking / identifying alloys)
• Material sciences (e.g. de-bonding alloys, de-laminating carbon fibre laminates, de-constructing infrastructure and high-rise buildings)
• Space sciences (e.g. managing the neglected Commons, mission-extension-vehicle-succeeds-returns-aging-satellite-into-service)
• Law schools and Accountancy (e.g. the definition of waste, ‘used product’ liability, comprehensive ‘user’ contracts and full producer liability)
• Systems management (IT, IoT, pharmacogenomics, genetherapy)
• History (e.g. Hiroshima as the beginning of the Anthropocene and the reasons why its consequences have been overlooked for decades)
• Literature as a means of informing and motivating users, examples described in literature: e.g. linear industrial economy - Death of a Salesman by Arthur Miller - and Circular Economy - Zen and the Art of Motorcycle Maintenance by Robert Pursig.
• Behavioural sciences, motivating owner-users to enjoy the use of and care for their belongings / assets; prevention of vandalism and abuse of shared assets (going beyond the Tragedy of the Commons)
• Political sciences (policymaking on framework conditions, taxation of labour, resource consumption, emissions) with the objective to find limits and obstacles of the CE and define pathways to answer issues perceived from the scientists’ side.  
• Macro-economics (Input/Output models for alternative economies)
• Micro-economics (e.g. ROI for remanufacturing versus manufacturing)

Economics is a special point in case. Economic efficiency rimes with economy of scale, the opposite of resilience with redundancy. According to the EU Green Deal, “the future is with green, resilient and digital economy that supports our health, our wellbeing and creates stronger resilience”. ^[1] “A more modern and circular economy will make us less dependent and boost our resilience. This is the lesson we need to learn from this crisis”, stated Ursula von der Leyen , the President of the European Commission at the European Parliament session of the 9th June as they discussed the EU’s coordinated response to the coronavirus and its consequences.

The economic focus on human capital since Adam Smith has been on productive labour ^[2], defined as any work which fixed itself in a tangible object. Unproductive labour is any work where the value was consumed as soon as it was created. COVID-19 has turned Adam Smith’s hierarchy of productive and unproductive labour upside down – ‘unproductive’ labour in essential services has turned out to be the precondition for productive labour. COVID-19 has switched the societal attitude from ‘Daring’ to produce added value, to ‘Caring’ to maintain existing values. Will this trend continue and incite a shift from the dominant linear industrial to a circular industrial economy in industrialised regions with a society of abundant physical stocks or ‘stuff’? 

This notion of ‘unproductive work’ may explain why the mainstream economy is ignoring the job creation potential of service-life extension services in the circular economy, which is maintaining, not creating tangible objects, and why it has been neglecting essential services often performed by specialised- sometimes illegal - workers in emergency and security services, health care and cleaning, agriculture, logistics, sales staff and operation and maintenance workers, many of them in ‘unproductive’ jobs with low wages and low social recognition.

If we can change the views of sceptical scientists – and there are many – it will feed into politics and R&D budgets. In the beginning, I would recommend bringing together scientific disciplines.

Today, there is a danger that the Circular Economy is becoming ‘the new sustainability’! Everybody jumps on the bandwagon, ignoring the fact that waste management and recycling are the final phase of the linear industrial economy (LIE) but someone else’s problem and expense, whereas waste prevention and recovering molecules is part of the Circular Industrial Economy (CIE). Equally, Kalundborg and industrial ecology, for me at least, are reducing costs in the linear industrial economy through cascading uses of resources, whereas service-life extension in the CIE is shrinking costs for the owner-user of objects.

We should always underline that a CIE is not the only intelligent solution there is, and, I contend, mainly applies to industrialised economies with markets near saturation. Approaches such as circular societies in industrialising countries and self-help groups (repair cafés) in industrialised economies can increase sustainability as much as the CIE. 

Geneva 10 June 2020 

 

 

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^{[1] Opening remarks by EU Executive Vice-President Frans Timmermans at the press conference on a green and just recovery, Brussles, 28 May 2020.
[2] Smith, A. The Wealth of Nations.1776.}