Foreign experience№ 2 September 2017

Peak over the horizon

In the late 1960s, a group of industrialists, politicians and scientists led by Italian businessman Aurelio Peccei and Alexander King, Director General for Science of the Organisation for Economic Cooperation and Development (OECD), created a public organisation called the Club of Rome. Its main task was to attract public attention to global problems.

In 1970, the Club invited Dennis Meadows of MIT to lead the Project on the Predicament Facing Mankind. In essence, he was tasked with building a model that could show what would happen to the world if demographic and economic trends continued as they were. Two years later, the scientists presented a report entitled The Limits to Growth. For the first time, the report shared doubts about stability of the linear economy. The authors predicted that if nothing were to change, then a fall in the standard of living, high hunger and mortality rates would strike in the twenty first century.

Efforts to rectify these effects date back to the 1980s. The reference point is considered to be the work of British scientists David Pearce and Carrie Turner, The Economics of Natural Resources and the Environment. They first formulated an idea of a circular economy. The idea is simple: like a chemical cycle in nature, waste can be a source of raw materials. By learning to recycle what was once considered waste, humanity can reduce the use of primary natural resources and solve a number of environmental and economic problems.


The future of things

In January 2017, over 40 major international corporations signed an action plan at the Davos forum to reduce plastic waste. The document provides, in particular, structural changes to packaging to make it easier to recycle or reuse. As expected, this will help to increase the share of recycled plastic packaging by 2025 from the current 14% to 70%. Among the companies that joined the initiative were Procter & Gamble, Amcor, Coca-Cola, Danone, MARS, Novamont, Unilever and Veolia, among others. During the six months following the signing of the action plan, many had already announced further steps.

Procter & Gamble joined forces with TerraCycle and Suez to develop the world’s first fully recyclable shampoo bottle. It consists of 25% secondary plastic produced from waste collected from beaches. This summer, Head & Shoulders shampoos in the new packaging were delivered to the stores of the French retail chain Carrefour. And this is not an isolated example.


95% of life wasted

However, a circular economy does not just mean dealing with the contents of rubbish containers. It is unfair to think that recycling alone can be a solution to all environmental problems. For example, in the twentieth century, steel production in the world doubled every 20 years. The total processing of metal is practically impossible – no one will pull out the load-bearing elements from houses and infrastructure facilities. But even allowing for such an unrealistic picture, recyled metal would not physically be able to meet long-term needs. The issue is much broader. By competently using resources at each stage of their lifespan, including production, we can get to a better solution.

A case in point: McKinsey experts found that most cars spend 95% of their lives in parking lots. In operation, on average each of the cars transports only two people, although most of them allow transportation of five. All of these are examples of our inefficiency – the cars themselves, the roads they drive on, materials from which they are made, fuel consumed in traffic jams, etc. A circular economy requires profound changes in business models that go beyond waste disposal.


In more detail

Although the concept of responsible waste management has become mainstream relatively recently, there are several interesting historical examples of its successful implementation.

• The first documented evidence of recycling belongs to 11th century Japan. In 1031, a decree was issued ordering people to collect all used paper for the production of new paper. The very process of producing recycled materials fr om recyclables was discovered back 103AD in China, wh ere people could produce paper from linen rags.
• In 1690, the first recycled paper factory, The Rittenhouse Mill, was established in Philadelphia. Old clothes were also used here as raw materials. For almost 20 years, the Mill was the only paper manufacturer in North America.
• In the early nineteenth century, Schweppes organised the collection of empty bottles in the UK and Ireland. In 1884, Sweden, for the first time in the world, introduced a system of remuneration for the return of used packaging.
• In 1813, an industrialist from Yorkshire, Benjamin Lowe, invented a method for producing wool-like fibres from old clothes. To increase the quality of the fabric he mixed them with new wool. This technology was used in several factories, which existed for almost a century.
• Eugène Poubelle, upon becoming in 1883 the prefect of the Seine, obliged homeowners to install containers for rubbish collection. In the spring of 1884 Poubelle went even further, ordering people to collect various types of waste separately. Today, in French the word ‘poubelle’ refers to rubbish containers.
• The Second World War gave a powerful impetus to recycling. Beginning in 1940, Europe and the USA launched large-scale campaigns to collect old synthetic fabrics, rubber, used batteries and scrap metal. Britain alone, during the war years, collected 4 million tonnes of scrap, and the volume of aluminium processing increased from 38,000 to 105,000 tonnes.


The time for theoretical research has already passed. Today, many countries are working on how to apply concepts relating to the circular economy practically. For example, in December 2015, the European Commission adopted a plan of action, suggesting a profound change in the regulatory framework. In addition to waste management solutions, it includes measures to increase energy and water efficiency.

In July 2016, the Centre for European Policy Studies (CEPS) in Brussels presented a report entitled Understanding the Circular Economy in Europe, from Resource Efficiency to Sharing Platforms: The CEPS Framework. According to the report, a circular economy bears undeniable advantages – from reducing the impact on the environment, saving costs through rational use of resources, to opening up new high-tech markets, and hence creating new jobs. This is supported by a 2016 McKinsey report entitled The Сircular Economy: Transition From Theory to Practice, estimating overall economic benefits of $1.8 trillion euros by 2030.

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