As the global economy prepares for 9.8 billion people by 2050, it’s clear our linear economy is reaching the end of its life.
Global economic leaders are now planning for a world circular economy to decouple economic growth from resource use. G20 leaders will hear about the circular economy when they are hosted by Japan – a global circular economy leader – later this month.
It’s no secret our global over-consumption economy will come to the end of its life and we need a Plan B.
Currently, our economy is built on single use “take, make and dispose” principles involving extracting resources, making products, using them once or only a short time, then disposing of them.
A circular economy keeps products and materials in use in the market longer, through sharing, repairing and reusing.
It is about changing the way we produce, assemble, sell and use products to minimise waste and to reduce our environmental impact. It is about valuing our resources, by getting as much use out of products and materials as possible and reducing the amount of waste we generate.
In 2015, the World Resources Forum Asia Pacific held in Sydney estimated the value of a circular economy to Australia could be around AU$26 billion per year by 2025. More work is underway now to quantify the Australian opportunity, but if the European ($AUD2.9 trillion) and China ($AUD15 trillion) opportunities are any indication, it will not be insignificant.
Circular businesses are highly profitable. Sharing and reuse significantly extends the market value of products, keeping them in the market longer, creating jobs, value and multiple new revenue streams.
Australia is already experiencing this transition as new sharing and reuse business models enter the market.
Yet Australia’s infrastructure and services remain wedded to centralised business models that are up to 75 years old, and promote a linear, throwaway and flush-and- forget approach to resources.
This “business as usual” is supported by outdated policy, legislation, regulation and tariff structures.
BAU economic strategy is experiencing its biggest change in centuries. Overconsumption will no longer guarantee our economic success, we need new systems to grow our economy and maintain our high standards of living within the limits of earth’s resource capacity.
To transition will require market reshaping and regulatory, policy and tariff changes that take into account the inherent and hidden costs of linear solutions along with the value of circularity.
Like redefining waste to be a resource, placing a value on removing vehicles from the road, preserving drinking water and reducing fossil dependent fuels.
We also need urgent research and leadership from the federal government and state treasuries to build on the work of the states in embedding circular economy policy into financial policy.
The circular economy will not work as a siloed waste strategy, it needs to be led by federal and state treasuries.
The World Circular Economy Forum held this month in Helsinki is working with the World Economic Forum to scale up the circular economy from the current 10 per cent global economic activity to 100 per cent.
To do it we must all collaborate. The ninety nations attending this year’s event are all committed to action. Among them are four Australian states – South Australia, Victoria, NSW and Queensland.
Our Aussie states are making a great start and with them some visionary councils. However, the circular economy will not progress if it’s a siloed waste policy – it must be an economic policy attached to productivity and jobs growth.
If Australia is to become a circular superpower, urgent research is required by our federal government working with COAG and state treasuries to value and catalyse this transformation before we are left behind.
Transitioning to a circular economy is inevitable, but winning solutions will not be created using old ways of doing things, they really do require change and harnessing innovation, new businesses and private and public sector collaboration.
Australia cannot grow sustainably by taking the same linear approach to infrastructure, products and services it has taken for the past 75 to 100 years. We need some new solutions ASAP.
Lisa McLean is chief executive officer of Open Cities. She attended the World Circular Economy Forum 2019 in Helsinki.