Fix the system - get a global 'circular economy' by blindspotter

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Contents:

   Executive summary
   Team
   What? including examples, FAQs and policy flowchart
   Why? including political feasibility
   How? including financing and modelling
   Vision? 
   References
   Key organisations 

 

 

Emissions, climate disruption and the impacts of climate disruption are all symptoms of underlying systemic errors - global bad habits. All climate policy and climate solutions are insufficient and ultimately futile unless we also fix the system that's at the source of so many problems. Paradoxically this big fix is more politically and technically feasible than less ambitious climate solutions. So if we act soon enough, current rapid climate change could be not only slowed down but also reversed. 

Reshaping the whole economy is the kind of action that's needed. Compare the massive power of the global economy to the weakness of international agreements to limit the impacts of economic activity. What if that economic power could be quickly and simply harnessed, so markets work to reverse the problems they've been causing including climate change? What if the political imperative of seeking growth could now ironically spur action in both developing and developed countries? What if the destructive aspects of development could be phased out worldwide?

Economic growth is today founded on activities that systematically undermine what's needed to get future growth in any nation; natural resources, ecosystem services, climate stability, health, well-being, co-operation, trust, etc. Why not allow the economy to do the reverse, to get economic growth by preserving and expanding the prospects for more growth? Imagine economic activity surging, based on resource flows and emissions drastically shrinking, nature and soil fertility quickly recovering, and the innovation, employment and enterprise to achieve this flourishing! 

This proposed new economic growth pathway should ensure resource flows follow a cyclical pattern rather than a linear pattern. As a vision this was set out by the economist Kenneth Boulding in 1966 (then 'spaceship economy') and recently in China's national planning for transition to a 'circular economy'. Circular economy is 'cradle-to-cradle' for all products in the entire global economy, so all used resources are regenerated by nature or industry into new resources. The systematic conversion of nature and natural resources into accumulating wastes in the land, water and air is not a law of nature - it's a worldwide policy error. Climate instability is a result of that error (from GHG wastes in the air, removal of ecosystem carbon sinks and inefficiency of repeatedly remaking and dumping the same products without attention to meeting people's needs). 

Proposals to switch from a linear (resources-to-waste) economy to a circular (resources to resources) economy have for the past 45 years lacked a mechanism to implement the vision. This mechanism is now available, based on peer-reviewed research published in 3 papers including by the NATO Science Programme as a policy initiative for 'global security' (please see references). Consequently climate policy now has a new option beyond continuing the unproductive 20 year long pursuit of international binding limits to emissions. Protecting the climate can be a design feature of economics, built-in rather than added-on. Corrected market signals can radically boost innovation and incentives for all necessary actions; resource and energy efficiency, refocusing on meeting needs, and reversing the loss of ecosystems. 

This proposal concentrates on reshaping the economy since this text is already long and a whole 'whole system' fix would be much longer. Yet due to irreducible global interconnectedness, solving the climate problem means in practice solving them all, which means also fixing other related systemic errors. This is discussed in reference 1 below and built into this proposal as massive additional climate financing opportunities that support the projected rapid transition envisaged in the model projections for this proposal. The projections require atmospheric waste concentrations to be lower than today so this proposal assumes that localised worldwide carbon sequestration is enabled worldwide as described in the biochar proposal on the CoLab. Please see the actions and impacts tab above and the modelling section below.

All stuff goes somewhere. It becomes either new resources or junk in the air, water and land. The global economics of junk hasn't worked. Changing this is not difficult and if we do, we'll wonder why we waited so long. If we don't then we won't enjoy ending up where we're heading. Please see also the Story of Stuff for an animation of the switch from linear to circular economics, http://www.storyofstuff.com/ Image: http://en.wikipedia.org/wiki/The_Story_of_Stuff

 

Team

 

Lead author: James Greyson, Head of BlindSpot global security think tank.
www.blindspot.org.uk. Blindspotter on the Climate CoLab. Twitter @blindspotting

Other team members:

Professor John Wood DipAD (Hons), ADF (Manc), FRSA, Emeritus Professor in Design, Goldsmiths University of London. metadesigners

Professor Mihaela Ulieru, Professor and President IMPACT Institute for the Digital Economy at Carleton University. mihaela

Dr Andrea Berardi, lecturer in environmental information systems, chair of Open University Development and Environment Society. andrea-berardi

Roger Eaton, developer of InterMix Collective Communication Software.

Jess Reese, jessreese

Dr. Vladimir Tretyakov, 
Director-Organizer, inteltech.iatp.by/tvinteltech.narod.ru
Lecturer/moderator, www.wiserearth.org/group/Sch_pan_th 

What? The economy could prevent rather than cause problems

‘‘Most environmental problems are based on the same systemic error - linear processing of material. Until resources are processed in cycles either by society or by biogeochemical processes the global economy and public health will continue to deteriorate. Consequently, we will never be in a better position than we are now to make the necessary changes; every minute we delay increases the final cost.’’

The proposed action is to switch the default economic growth pathway from one that damages prospects for future growth to one that builds those prospects. This requires reshaping the economy from a linear (extract, make, dump) pathway to a ‘circular economy’ (cyclical resource flows with expanding natural capital and declining 'problem stockpiles' - such as GHG accumulation, exploitation and conflict). Today’s economies are hitting the limits of growth with the linear paradigm. Rather than asking merely for the failed linear pathway to be done slower or greener or lower-carbon, this proposal offers a complete replacement pathway that gains growth by expanding activities that build society's capacity for future growth including a capacity to rapidly reverse trends with impacts and emissions. 

Circular economics can be implemented by a simple international agreement that a new growth pathway is essential for the continuing progress of civilisation (ie opting out of the current collapse pathway). The agreement would aim for a rapid shift to a circular economy with co-ordinated action to incentivise this shift within markets and society. The incentivising would be based on a mechanism comparable to third party car insurance. Legislation in each nation would oblige all significant producers of all products (including fuels) to pay a premium to insurers to account for the risk of the product resource adding to accumulating waste in ecosystems. Premiums would be redistributed from production of high waste-risk products to fund society’s activities that cut the risks of resources (including fuels) becoming wastes (including GHG). The mechanism is simple but far-reaching since it works within the diversity and complexity of markets and culture.

The incentivising mechanism may be called 'precycling premiums' which needs a little explaining because the language comes from tomorrow's conventions not today's. 'Precycling' is action to ensure products don't become waste, which shifts today's patchy end-of-pipe thinking about waste to the rigorous prevention of waste dumping and all resource-related problems including climate change. Waste can be prevented in so many ways throughout society that precycling in practice becomes 'action for sustainable development'. The 'premiums' refers to the insurance-like accounting for the risk of products becoming waste. However it differs from conventional insurance (and conventional approaches to externalities) as premiums are distributed preventively rather than as compensation for losses from continuing waste accumulation, resource loss and climatic disruption. Unlike taxes, the government would not handle the money so they can provide independent accountable oversight. 

Precycling premiums are systemic, meaning they work across all kinds of products, all sectors, all resource-related externalities, all sustainable development activities and ideally all countries (to cut cross-border accounting effort). This systemic action makes the mechanism highly efficient and decisive in effect. Sustainable (and climate stabilising) decision-making would be guided both by market price signals and by the new positive and collaborative societal vision. Some prices would go up and others down, with an large boost to society's capacity to meet people's needs. The existing incentive to profit by selling more and dumping more would be reversed by the opportunity to pay lower premiums and to gain a share of premium funds. This would allow less materials to meet more needs, and investments in society and ecosystems to regenerate materials as new resources.

The proposed mechanism allows economics to shift from a zero-sum game of diminishing returns to the increasing returns offered by virtuous cycles of economic activity that builds capacities for more economic activity. (See comment 52.) More information about the mechanism is provided below with examples, FAQs, a flowchart of policy options, the 'why' section about feasibility, and the 'how' section about governance, financing and modelling. Yet more is provided in the references. Comments are welcome if anything is unclear.

Examples

• Poorly designed, unreparable, unrecyclable equipment can today be profitable to make and sell as people are forced to keep buying replacements. Such products are 'prewasted'. In a circular economy prewasted products would not be banned but would pay a premium to account for the measurable risk that they add to waste levels. This would make alternative well designed, repairable, recyclable items more competitive. Premium funds would support the learning, activities and infrastructure needed to close resource loops. 

• Fossil, nuclear and refuse-derived fuel products have high waste-risks (up to 100%) so premiums would be high compared to renewable fuels which have low risk of becoming waste. Accidents, spills and leaks would raise waste-risk and premiums. Premiums would be spent supporting actions that cut the risk of products becoming waste, such as reducing energy dependence, localising resource distributions and supporting development and infrastructure for renewables. 

• Products that include toxic or persistent synthetic components have high waste risk and would attract high premiums. Manufacturers would quickly phase out such ingredients. Waste incineration would be quickly phased out as people suddenly realise that all waste dumping is optional and turning valuable resources into toxins and GHGs is not a success strategy in any country. 

• Plastic bags and packaging have been a target for campaigners for decades; meanwhile vast amounts of these non-renewable resources have been dumped into the land, air and seas (eg the North Pacific garbage patch). If producers paid a premium according to the risk of their plastic (including heavy metal and hormone-disrupting components) becoming waste then price signals would spark a sudden whole-society collaboration on minimisation, reuse and recycling. 

• Biodegradable products (such as food or cleaning products) require technical or ecological processing capacity to avoid accumulating as waste (GHG in air, excess nutrients in water-courses etc). Significant producers would have the choice of investing in sufficient capacity or paying a premium that would create that capacity anyway. Either way this would fund actions such as composting, reed beds, ecosystem expansions and reforestation). The large-scale expansions of ecosystems then offers a virtuous cycle of further economic opportunities and dismantling of obstacles such as soil depletion and climate impacts. 

• Precycling premiums can be used with all products of the economy (the whole technosphere) from raw materials to complex products. A building for example can be made to be either entirely remakable into new resources after use or entirely lost as waste. A 'precycled' building built from precycled components would pay no premiums and could even share in premiums contributed by products designed to end up as waste.  

FAQs

1. Why should people choose to pay rather than continue neglecting to pay for externalities? Today the lack of accounting for externalities causes rampant externalities. Conventional accounting for externalities involves predicting unpredictable future costs of impacts whereas waste-risk premiums involve current measurable likelihoods and costs. In a circular economy precycling premiums would account for externalities by paying the price of preventing them (which is a bargain compared to allowing externalities to accumulate out of control and then trying to afford them). Externalised impacts systematically impose costs on the future that are incompatible with ethics and sustainability. However linear economics also imposes massive current costs, for example as flimsy products need regular replacement, garbage needs collection and high-tech burning or burying, fresh resources need to be sought (and fought over) around the world and myriad symptomatic problems are suffered worldwide without being solved. 

2. What level should precycling premiums be set at? Premiums will not generally need to be high to work. At any level they provide a signal to all market participants that their economy now has a positive vision. This would provide a new default vision for planning, designs, investments, grants and subsidies that would be happening everywhere anyway and might otherwise have enabled faster linear resource losses. Premiums on fossil fuels would be spent in part to support renewables so the premium level would not need to bridge the full gap in order to make renewables cheaper per unit than fossil energy. The premium on hard-to-recycle packaging should be enough to pay the cost of collecting and recycling it. Premiums on substances that are already accumulating in the biosphere should be higher to support faster phasing out. 

3. How does dealing with waste help with other sustainability issues? Ecosystem waste is connected to all other sustainability issues through linear (one-way) resource flows and the culture of exploitation that this invites. This interconnectedness allows waste risk to be used as a leverage point for whole system change. Cutting the risk of products becoming waste addresses all resource-related issues and spending of premiums based on waste-risk can address all sustainability issues. Using waste risk as a proxy for unsustainability is a way of handling ecological externalities that doesn't require predicting and measuring every future unpredictable and unmeasurable impact. (See 4.2 and 4.5 of reference 2 for published info on using ecosystem waste as a proxy for unsustainability.) 

4. Why focus on materials rather than emissions or energy? Economies have few points of significant production but a multitude of emitters and energy users so material flows are an ideal leverage point. Taking care of material flows is also an effective way to take care of emissions and energy since corrected product prices can guide sustainable choices with materials, emissions and energy. The same economic tool can apply to both fuels and energy equipment. Energy itself need not be included since energy comes either from fuel products or from sources that do not add to waste in the biosphere (geothermal, tidal, solar). Precycling insurance can account for the nuclear power station as well as the fissile fuel, the oil tanker as well as the oil, and all the equipment used for renewable energy. (See also 4.11 of reference 2) 

5. What are the advantages of producer responsibility? Currently producers have minimal responsibility when their products end up adding to waste in ecosystems. This is like a hidden subsidy that invites businesses to compete for profit by dumping more wastes. The subsidy is rarely questioned since it is so entrenched in people's understanding of markets and the alternative of circular economics is so little known. However without fixing this market failure there can be no solution for climate disruption or any related imperative. The proposed mechanism is an extension of 'extended producer responsibility'. Producers would retain existing freedom to design and sell products as they wish but responsibility for what happens to their product would no longer be optional. This would provide markets as level playing fields where producers compete for profit not by waste dumping but by phasing out waste dumping. 

6. How to calculate premiums? Producers would be expected to consider key aspects of their products that are entirely in their interests to understand. 'What happens with our products and their components at end of life?'. Is our product recyclable or biodegradable? Have we contributed towards sufficient industrial and ecological processing so that our product can become a new resource in society or nature? Producers would make public precycling plans for their products and and to take financial responsibility by either ensuring the materials become new resources or paying a premium to account for the waste-risk. The product plans would inform a science-based calculation of precycling premiums to be paid to accredited insurers. This calculation is comparable to the way that currently-known risk factors for car insurance premiums serve as a proxy for future unpredictable automotive losses. (See also examples above, FAQ 2 and 4.3 of reference 2).

7. How would premium funds be spent? Premiums would be spent throughout society on precycling; actions that cut the risk of materials becoming waste. This would bridge the gap between existing sustainable development activity and the scope of activity that's needed. Funds would be spent at all levels throughout society by insurers, climate and sustainability organisations and local groups (such as transition initiatives). Spending would be transparent to the public and accountable to government. The availability of large scale funds would awaken society's interest in 'green' issues and stimulate dialogue about what to do (thus moving on from the 'problem, what problem?' skeptic debate). Previously published work sets out a suitable scientifically-based framework of principles for the spending of premiums. (See 4.5 'building capacity to make resources not wastes' and 4.7 'principles for investing premiums' of reference 2.)

8. How can markets cut emissions and resource demands? Conventional business profits by steadily diminishing nature and selling ever more stuff that becomes waste. Precycling premiums provide the opposite incentive, to profit by selling less stuff that is less likely to become waste. Since this includes fuels the incentive is also to use continually less energy from sources that make less waste of all kinds, so encouraging less materials to be moved less far and less often, extracting less from nature and dumping less to nature. The incentives would also invest in expanding ecosystems, which builds capacity to regenerate dispersed wastes. Businesses would minimise costs by offering the maximum service with the minimum materials.

9. How about the energy needed to prevent, reuse, recycle and to regenerate ecosytems? Yes the regenerative part of the economy does use energy and cause emissions. However it is misleading to consider just this subsystem and to neglect the whole system choice of either continuing to deplete and dump or to adopt circular resource flows. The most energy-efficient version of linear economics involves 'recovery' of energy by burning waste, which produces up to 3.5 MJ/kg of municipal waste (see ref). However almost all the carbon ends up in the air, highly toxic wastes are created and all the destroyed materials need to be replaced from fresh natural resources. The energy cost of replacement is the 'embodied energy' of the waste, which is typically 35 MJ/kg. Thus the linear choice loses at least 10X more energy than it can recover. In practice most waste is not burnt with energy recovery and the linear economy loses far more than 10X the energy it can reclaim.  

No organisation appears to have done the research to compare energy use in linear and circular economic models. However work by the Factor 10 Institute (see the references of reference 2) projecting a total reduction in energy demand of up to 80% from the 10X improved resource efficiency of a circular economy. In other words, their research suggests that the potential for energy saving from closed loop resource flows (including reductions in global flows) is vast, even considering the energy used to close the loop.

How can circular economics achieve large scale energy saving (and consequent emissions cuts)?

1. Waste prevention has vast untapped potential. Every tonne of prevented waste from cities avoids all the upstream waste (the ecological rucksack) of around 71 tonnes (ref WorldWatch Institute). The energy cost of processing this huge rucksack along global logistics can be avoided by preventive actions. 
2. Doubling the useful lifetimes of common products halves resource flows (and all the embedded energy). 
3. Dematerialisation offers permanent elimination of resource and energy flows. For example sufficient insulation allows buildings to become zero net-energy, eliminating future heating fuel requirements. Ecosystem approaches to agriculture can manage pests and weeds eliminating future herbicide and pesticide requirements (and energy/toxics burdens).
4. Reuse, remanufacturing and repair are massively energy efficient since the resources are available in forms very close to what is needed. For example washing machines that today get discarded are typically 99.5% working and could simply be fixed rather than made from scratch with raw materials from around the world. 
5. Recycling has typical average energy savings around 50% compared to new manufacture. The future circular economy would gain even higher savings and emissions cuts since recycling would involve localised logistics and be powered by renewable energy.
6. Composting for example can be done at household and neighbourhood scale with no energy cost and no heavy vehicle movements. Simple techniques such as composting lawn clippings can turn major methane sources into carbon-removal and soil enhancement. 
7. Meat prices would no longer be subsidised by cheap fossil energy and ecosystem damage, so reducing meat demand and related methane/CO2 emissions. Land would be used to grow food for directly and more efficiently for people not animals, reducing both hunger and emissions.
8. Regeneration of ecosystems can provide net energy gains. Little energy is needed to plant a forest compared to cutting or burning forests. The expanded natural capital of new ecosystems provides a growing renewable harvest of biomass that can even be carbon-negative; providing energy and sequestering carbon as biochar.
9. Communities can learn to co-operate by precycling; freecycling, lift-sharing, community composting/farming, shared eating/celebrations - all requiring less energy than fragmented communities. 

10. How can selling less stuff and making less emissions add to economic activity/GDP/economic growth? Economies need not be destructive and need not grow by turning resources into junk ever faster. This is just a silly bad habit that will never again appear sensible after it ends. Decoupling of emissions from economic activity is supported by a range of positive feedbacks (virtuous cycles) between natural resources, cultures of co-operation and economic activity. The economy can grow by creating the conditions for further growth of economic activity:

1. Action would be stimulated across the whole economy not just green or 'low-carbon' sectors.
2. Higher prices for waste-dependent products (adding to GDP figures).
3. 'Recycling' of premiums into productive and regenerative spending. 
4. Premiums incentivise big investments, eg public transport, efficient buildings and renewable energy.
5. Less spending on junky items enables more spending on items with a future. Closed-loop resource flows also create more jobs. 
6. Clarity of economic vision giving confidence to businesses and investors who are currently idle, in 'austerity-mode'.
7. Positive shared images of the future build economic confidence and cut corruption. 
8. More enthusiasm and initiative when lifestyles, jobs and businesses are not in conflict with shared values. 
9. Many sustainable activities are labour-intensive, so creating more jobs and more widely shared wealth.
10. Premiums for circular-flow activities and products leverage more spending throughout the economy. 
11. Synthetic fertiliser, pesticide and diesel agricultural inputs replaced with higher-value inputs of human efforts with compost, biochar and other nutrients. Higher yields of healthier food growing in regenerated soils. (See example)
12. Expanding ecosystems provides better ecosystem services and renewable harvests without losing natural capital. 
13. The transition process involves new learning, new technologies, new enterprise etc - all adding to GDP.
14. Prevention of conflict over scarce resources allows shrinking diversion of funds into unproductive weapons spending.
15. Rapid response to the climate crisis (and related global crises) avoids preventable losses from future disasters.
16. 'Failed states' suffering resource depletion, conflict and deprivation can be offered an economic pathway for recovery including economic recovery.

Flowchart of policy choices

Society keeps making choices that hit the 'wall of dead ends' (arrows to the right hand side). The downwards flow of choices leads to a sustainable circular economy where climate disruption could be reversed.

Why? The climate needs more than 'climate' solutions

As a society we frame the climate problem in ways that help us cope with it psychologically but do little to actually solve it. For many that means denial. For most of the policy-making community that means narrowly focussing on incremental changes such as emissions and average temperatures rather than the systemic variables such as GHG concentrations and loss of buffers such as ice and ocean ph (which are much scarier). Consequently, well-intentioned climate policy supports the mass delusion that GHG concentrations can be stabilised at future higher levels  - when the current impacts (for example accelerating vanishing polar ice and unaffordable weather related disasters) from existing levels are already evidently unacceptable.

This proposal offers a way for the scale and speed of society's response to match the scale and speed of the problems. The 'machinery' of the solution is the same machinery that caused the problem - but working in the opposite direction. Campaigners and policy-makers became stuck in a mindset of limits and control, as if the machinery of economics was inherently damaging and the best we can hope for is to attempt to set targets for future reductions in rates of damage. These attempts are of course resisted since success with the prevailing linear economics requires ever more conversion of resources into wastes. There is also a deep psychological hurdle to be recognised, that people instinctively resist change presented as a constraint. 

Campaigners and policy-makers have missed the opportunity, over the past 20 years, of moving beyond end-of-pipe and narrow solutions to propose switching the machinery of economics so that every decision by every market participant can be part of the solution. Curiously this market-based solution would also support political and social change. Consumerism for example is part of the package with linear economics. If politicians knew they could achieve economic growth from the economy-wide work done to phase out impacts then more of them would no longer feel obliged to make dumb decisions just to keep linear economics running a little longer. 

Please see my article about redesigning climate talks and my Op-Ed marking 40 years after the first International Environmental Governance conference in Stockholm. See also this ClimateWorks report, "The document, written by Hal Harvey and Sonia Aggarwal, calculates that stabilizing the gases at a level low enough to avert severe damage to the planet will require that emissions peak by 2020 and then begin falling briskly — and no set of policies in place today is likely to cause that to happen."  

Political feasibility

Conventional policy says to break problems down into smaller pieces. This can work with technical complexity but it has proven to be absurdly ineffectual with complex global problems such as the climate. Reshaping the whole economy is paradoxically more politically feasible than imposing climate limits on an otherwise still-unsustainable linear economy.

1. Economic growth is a political imperative so negotiators can only accept limits to the extent that growth is not harmed. (Hence 20 years of haggling and rising emissions). 
2. Circular economics offers a potential for rapid growth of economic activity that is unavailable with either climate-constrained or unconstrained linear economics.
3. Lobbyists argue 'there is no alternative growth path besides growth-as-usual'. This proposal gives politicians another growth path that solves more problems than lobbysists can ever claim to solve. 
4. The proposal is pro-markets, pro-business, pro-innovation and pro-resources. In contrast lobbyists are merely pro-themselves.
5. Change is stimulated and choice is preserved. All market participants remain free to choose how and whether to become more sustainable. Price correction ensures overall progress by creating a level playing field with no hidden subsidy for unsustainable choices.
6.  The approach is non-prescriptive and non-punitive. No complex rules regulations. No taxes that vanish into government revenue.  Producers actually benefit from the requirement to think about future of their products.
7. Positive vision of the future allows premium funds to leverage even greater investment funds, creativity and efforts. Innovators can gain from a share of premium funds. 
8. All countries gain opportunities. For example developed countries can rebuild lost manufacturing and remanufacturing capacity. Developing countries can use premiums on sales of raw materials to cut waste risks by protecting and expanding ecosystems. Developing countries can escape being seen as convenient raw material stores and waste dumps. 
9. Circular flows of nutrients in non-depletive agriculture provides a future for food security both where hunger is already experienced and everywhere else. The globalised fossil-fuel-dependent food system is no longer reliable and politicians are well aware that their jobs depend on maintaining a stable food supply. 
10. Job creation is particularly well-supported. Small gradual losses in 'brown economy' are offset by large rapid gains in 'green economy' where human ingenuity and effort replaces fossil fuel-powered extraction, mechanisation and long-distance logistics. Society is not short of important work for people to do; it has just lacked an incentive mechanism to get the work done.
11. The administrative capacity (and collective intelligence) or politics cannot cope with multiple fast moving complex symptomatic issues. Systemic change gives politics a chance of coping by providing policies that are both more effective and faster to discuss and enact. 
12. Single issue politics struggles to do anything without creating more problems (eg crop biofuels, incinerators, conventional nuclear, foreign occupations as 'solutions'). Circular economics would bring systems thinking to politics. 
13. The voice of civil society (both climate campaigns and popular uprisings) has been muffled by the imbalance between opposing and proposing. This proposal offers the chance to call for something that matches the scale of the problems. 

How? Governance and financing

Governance framework.  The overall global economic and environmental governance framework for the proposal is the whole society, with all its people, institutions, cultures and capabilities for change. Climate governance with climate policies, climate institutions and climate activists can contribute usefully but it is not sufficient. Circular economics is a way to engage the whole society in a sufficient change process, since everyone uses products or takes part in decisions in markets. The whole society dialogue that would be inspired by the question of how to effectively spend and assess large funding flows from precycling premiums will also support engagement with climate and related issues. The whole society is also vital for monitoring the effectiveness of producer product plans that will be available on the web. 

Circular economics as collective intelligence. Linear economics (systematically depleting resources and co-operation) is a framework for collective stupidity and collective self-destruction (See for example the Age of Stupid film online.) Even when many individuals and groups pursue non-destructive initiatives the net effect is still the same. The introduction of circular economics would be a transformative moment like in the story Emperor's New Clothes when a mass-delusion is abandoned. In practical terms, the monitoring and spending of precycling premiums would both be informed by open dialogue (real and virtual) based on scientifically robust foundations (such as principles described by The Natural Step - see reference 2). Technological and social innovations would flourish. Producers would find it hard to pretend about recyclability for example when customers can find no facilities for it. Transition initiatives in local communities would have access to funds sufficient to seriously plan a transition. 

Implementing circular economy. With the possible exceptions of China, South Korea and Japan, governments have been slow to catch on to the opportunity of running their economies without depleting what they need to keep running. In their defence, civil society and international policy-makers have been similarly slow to point out the opportunity. The Climate CoLab is a way for civil society, policy-makers and governments to grasp the opportunity. If this happens then the Rio+20 conference could be an ideal moment to mark a new era in global problem-solving where governments collectively agree to implement circular economics as a radical new growth pathway and as a market-guiding mechanism. International agreement also allows co-ordinated implementation to avoid the accounting effort of adjustments across borders. (See section 5 'Starting economic renewal' of reference 3)

Compatibility with other mechanisms. Precycling premiums is a meta-mechanism which is compatible with most or all possible alternative mechanisms for climate and related sustainability issues. Other proposals in the CoLab are either ways to reduce the waste-risk of particular recource flows (such as carbon) or they are ways to spend premiums on reducing waste-risk (such as educational activities). In general other past or future climate or sustainability initiatives enacted at any scale and intended for any piece of the problem will be mutually supportive. This applies even when another mechanism is made redundant by precycling premiums. For example the plastic bag tax in Wales and Ireland will reduce the risk that plastic from bags will end up as waste in garbage or in nature, so the waste-risk and premiums on bag producers would be reduced. Similarly a carbon tax or a regulatory/voluntary limit on particular emissions would make a quantifiable difference to waste risk of fuels and cut producer's premiums. Over time the number of different mechanisms, rules and regulations would plummet since very few would be needed.  

Compatibility with the allied global proposal Carbon-negative 'biochar economies'. The 2 proposals should be implemented together:

1. Circular economy provides the vision (and now the incentivising mechanism) for global emissions and other climate related impacts to be rapidly reduced beyond the most ambitious targets of climate negotiations. However atmospheric CO2 concentrations are already too high so the net-carbon-negative process of biochar is needed to sequester carbon and to revive soils for expanding food, forests and ecosystems. Biochar can also help eliminate landfilling, incineration, deforestation and bonfires. 

2. The economic tool (precycling premiums) would create a potential financial incentive for biochar. Premiums on biomass-based products and fossil fuels could be reduced by producer's investments in biochar and reforestation. Premiums on products that chose not to invest would still be invested in activities (including biochar) that cut the risk of all kinds of products becoming waste. 
 

Financing

A commonly expressed obstacle to fast global change is a perceived lack of funds. This perception is worsened by the current worldwide stumble into self-imposed austerity. The world has no real shortage of money but a diabolical shortage of imagination on money. The mechanisms below can finance the necessary acceleration of investments in 'global security' including climate security. They also provide a solution to a classic dilemma with price correction, since there is one source for funds (the unsustainable product, eg fossil fuels) and two calls upon those funds (supporting a sustainable alternative and supporting those hit by the higher prices, eg the 'fuel poor'). Bringing in extra funds means that both calls can be supported. 

How to finance restabilising the climate at sufficient speed:

1. • The whole economy. Premiums from risky products will be redistributed to fund activities and products compatible with sustainability. Resources previously lost become available again to the economy. (This proposal: switch 3. See reference 1 below for outline of the other switches.)
2. • Creative renaissance. A society not stuck in its ways can make brilliant innovations rather than expensive mistakes. (Switch #2)
3. • Economic growth based on regeneration rather than depletion and exploitation, stimulating vast private and public investments. (This proposal: switch #3)
4. • Redirection of institutional investments (eg subsidies, grants and aid) to match the new economic vision. (Consequence of switch #3 - subsidies always fit the prevailing vision/paradigm).
5. • Release of vast funds previously thought necessary for accumuation of weapons. (Consequence of switch #4).
6. • Generation of revenue and reduction of costs from reversing the loss of nature. (Switch #3 and #5)
7. • Sharing of wealth previously accumulated by the super-rich and diverted from productive use into speculation. (Switch #6)
8. • The public creation and spending of new money previously created and lost by banks. (Switch #7) 
9. • The gift economy (volunteering, donating, sharing, exchange of favours). This is stimulated by the shift from fragmented self-interest to shared ambition and positive visions of the future. (Switch #1 and all other switches). Small amounts of funds from switch #3 can enable large amounts of effort in the gift economy (eg funding volunteer co-ordinators).

 

Developing and developed nation perspectives. The vague language of 'development' has provided a working consensus where almost any activity causing any change could be called development and present itself as progress. Yet how real is that progress when much of the world lacks the means for basic survival and the climate approaches irreversible instability? The opportunity of real progress (or positive development, see reference 1) has yet to be grasped. Circular economics is already recognised sufficiently in China to become a national planning strategy. It can equally be advanced by any nation, developed or developing, as a development strategy applicable at any scale from single products to trading regions to the globe. The advantages of building economic growth upon activities that support further growth are clear and no nation need wait for others to take the lead. 

Circular economy is a national planning goal for China. "There is an urgent need to accelerate transition of the economy from traditional model to circular one." Image: International Conference on Environment and Circular Economy, Nankai University, Tianjin, China

 

Computer modelling 

The available computer modelling does not so far cover the range of CO2 concentration targets (ie rapid reductions) that are compatible with an opportunity for continuing civilisation. It appears that the scientists working on the models had not been asked to consider concentration targets below existing levels. Hence the model's message for mitigation costs in the 'actions and impacts' tab, "The actions for this plan are outside the range of acceptable inputs... and it may mean that the modelers deem the plan's actions infeasible" is not fair or reliable as a judgement of feasibility. Perhaps it would it be more accurate to report that the models may not be feasible for the scenario where atmospheric concentrations are already too high? Consequently the actions and impacts for this proposal are set at the expected results of this proposal, including the financing options given above (for speed of response) and the allied biochar proposal (for rapid worldwide sequestration).  

Further work should be urgently done on the models to reflect both the climate realities (need for reduced concentrations not just emissions) and the actual available policy opportunities (such as carbon-negative activities and circular economics). The 'damage cost' graph has a scale that considers only negative effects on GDP from climate initiatives, when any meaningful (ie massive) scale of activity in addressing the issue would indicate a positive boost to economic activity. The language used to describe mitigation costs unfortunately obstructs understanding that most spending on climate-related initiatives would count positively towards GDP so it is actually a question of financing not of economic damage. It appears the modellers have also not yet been asked to consider scenarios where increased spending on a global transition cause GDP increases, thus creating a 'damage cost' with a positive % change in GDP. A good start would be to simply show a positive scale on the graph!

Over the past year, the economic modelling used internationally has moved on beyond politically-unhelpful presumptions that mitigation can only harm economic prospects. The UNEP report 'Towards a Green Economy' showed positive gains to growth from green sector investments (see figure 9 page 32). The report 'A New Growth Path for Europe' shows that win-win gains for both emissions cuts and GDP improve even when Europe adopts stronger emissions targets. A next stage for modelling would be to consider the climate and growth benefits of reshaping the whole economy, not just carbon-related change and not just 'green' sector change. A systems dynamics model using precycling premiums to implement circular economy could calculate outcomes from the many reinforcing feedbacks between phasing out all waste accumulation (including rising CO2 concentrations) and GDP.

I would gladly help with this modelling work even though it's not yet clear that it would be possible to encompass the real-world complexity involved in a new economic pathway and an economic mechanism that affects almost all decisions in markets and almost all resource flows. There is an 'uncertainty principle' in climate policy that suggests a trade-off between the predictabiity of key variables (quantity of emissions and GDP) and the speed of societal response. Policies which seek set levels of cuts in emissions (such as the past 20 years of international climate talks) appear to be slow to agree or enact. Focussing instead on the speed of response offers the opportunity to create fast change (far beyond Kyoto or EU climate targets) with policies that are powerful but not quantitatively predictable. The resulting effects on emissions, ecosystems and GDP can certainly be modelled qualitatively which may even be sufficient to demonstrate to politicians that there is an alternative to governance, economics and climate change in spirals of decline. 

 

Vision? Achieving diverse goals with policy that unites goals

 

This proposal is compatible with visions of a peaceful prosperous sustainable co-operative simpler fulfilling future on a shared Earth. This vision is widely shared and perennial but has not been achieved previously due to lack of tools for merging goals that have previously appeared in conflict - such as environment and economics. Circular economics and precycling premiums are a key example of these tools which are now available and ready to use (others are given in reference 1 below).  

Please support this proposal and invite your friends to do the same! Reach your networks quickly using the share tool on this page. Please comment using the 'comment' tab above.  Many thanks!

 

References

 

Reference 1. Advanced Research Workshop paper for NATO Science for Peace and Security Programme 2010 by James Greyson. Author's link: Seven Policy Switches for Global Security. Publishers link: http://www.springerlink.com/content/g715w8718726x736/

Abstract: Everyone desires a secure life. Yet the security of more and more regions is undermined by unreliable and unequal availability of basics such as energy, water, food, natural resources, funds, co-operation, trust and hope for the future. Shocks such as the credit crunch, infectious diseases, climate instability and ecological collapses are converging towards a ‘planet crunch’ where security would become a fond memory. Traditional policy-making, that manages problems separately and incrementally, offers only the illusion of protection against impending unaffordable and irreversible shocks affecting all people. Future security anywhere requires all facets of security everywhere. This ‘global security’ ambition can be sought with a new era of policy-making that encompasses the indivisibility, scale and urgency of all planet crunch issues. This paper offers a selection of seven simple ‘policy switches’ (or ‘leverage points’ in complex systems). Each policy switch offers an expanded vision of people’s role on Earth and a whole-system change to implement it. Together the switches define a practical strategy for global security, for a serious attempt at revival of co-operation, ecosystems and prosperity.

The proposed policy switches are:

1. The strategy of aiming to reduce problems can be switched to reversing them with ‘positive development’. Less bad is not good enough.

2. Education can inspire a culture of joined-up thinking and engagement by switching from predetermined to curiosity-led learning. 

3. Economic growth can be switched from consuming the basis for further growth to building it by correcting markets with ‘precycling premiums’. [The subject of this proposal in the CoLab!]

4. Rapid global disarmament can be launched by switching from Gross Domestic Product to ‘Gross Peaceful Product’, that omits weapons-related transactions.

5. Exploitive commodification of the Earth’s surface can be switched to guardianship by international treaty that interprets ownership in terms of responsibility to future generations. 

6. Surplus accumulations of financial wealth, which would be wiped out by the planet crunch, can be switched by the wealthy into investments that secure all forms of wealth.

7. Global financial stability can be regained by switching money creation from the private sector to central public authorities and local currencies.

Reference 2. Author's link, Systemic Economic Instruments for Energy, Climate and Global Security. Publisher's link. Nato Science for Peace and Security Programme. Elsevier. May 2008.

Reference 3. Author's link, An economic instrument for zero waste, economic growth and sustainability. Publisher's link. Journal of Cleaner production. Special issue on Zero Emissions. July 2006.


Some key organisations involved with circular economy

 

Centre for Low Carbon Futures
Zero Emissions Research & Initiatives (ZERI)
Ellen MacArthur Foundation
Circular Economy Business School Network
Biomimicry Institute and Biomimicry Network
Industrial Ecology organisations
Cradle to Cradle organisations, including McDonough Braungart Design Chemistry
The Product Life Institute
UNEP Circular Economy: An alternative model for economic development
Green Alliance
Institute of Science in Society
World Bank
Tongji University,Shanghai
Ministry of Environmental Protection, China
Circular economy in China
Tsinghua University, UNIDO
DEFRA (UK), International Synergies
Story of Stuff (animation)
UNDP
International Institute for Sustainable Development