In the modern age, environmental sustainability is increasingly highlighting itself as a major obstacle to the traditional belief in infinite economic growth. It may not seem that difficult to understand that the increase in human material consumption cannot be infinite, but it appears that many economists choose to ignore this, preferring outdated measures of growth to analyse the extent to which humans can increase living standards. This is where we must introduce the concept of a circular economy.
The circular economy is defined by WRAP (the Waste and Resources Action Programme) as an economy “in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.” This would be an economy in which broken consumer durables are not just thrown away and replaced: they are instead repaired or refurbished, thereby extending the lifespan of the good and subsequently reducing non-biodegradable waste. A report published in 2013 by the Environmental Services Association (ESA) estimated that increasing the circularity of the UK economy could add up to 50,000 jobs, boosting GDP by £3 billion.
Manufacturers should focus on producing easily-recyclable and durable goods. The Great Recovery Project, run by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), calculates that “over 80% of the environmental impact of a product is determined at its design stage”. The project provides a number of ways in which products should be designed and manufactured in order to increase the circularity of the economy, promoting products that are designed to be long-lasting, available for leasing and reusable in manufacturing. Beyond decreasing our usage of scarce raw materials, the opportunity to recycle materials for profit would attract investment and benefit the economy.
Increasing material recovery would also provide cheaper alternatives to extracting raw materials, a key issue facing the world today. Dustin Benton from the Green Alliance used the copper extracting industry as an example of the problems with our reliance on extractable resources: “When we started measuring back 150 years ago there was about 7% copper in every ton of ore that we got. Today it is about 0.6%”. This evidences the increasing challenges of extracting raw materials as the easy-to-access materials are depleted. As a result, the cost of extracting these materials for firms and subsequently prices for consumers increases. However, if recycled materials were to be offered to firms instead, this would significantly reduce firms’ costs and subsequently benefit the economy.
In all, improving the circularity of the economy would not just have obvious environmental benefits, it would also create new economic opportunities for investors and entrepreneurs.
Image Credits: Pixabay
