Circular Economy Notes

Circular Economy

Week 1: Introduction to Circular Economy

  • Lecturer: Dr. Rabia Fatima
  • Attendance: Mandatory
  • Assessment: Individual written exam
  • Literature: PowerPoints and recommended literature on Brightspace

Course Content

  • Week 1: Essence of the circular economy
  • Week 2: Business Value in a Circular Economy
  • Week 3: Longer Lasting Products
  • Week 4: Remanufacturing
  • Week 5: Systems Thinking
  • Week 6: Revision/Practice Exam

Learning Goals for Week 1

  • Understand sustainable development and the circular economy.
  • Explain the principles guiding the circular economy.
  • Recognize the necessity for adopting a circular economy approach.
  • Circular economy in practice.

The Concept of Sustainable Development and the Circular Economy

  • Circular Economy Diagram:
    • Includes biological and technical materials cycles.
    • Highlights processes such as soil restoration, anaerobic digestion, farming, collection, materials & parts manufacturing, product manufacturing, retail & service provider, mining & materials manufacturing, cascades, maintain consumer user, reuse & redistribute, energy recovery, leakage, landfill, recycle, refurbish & remanufacture.
  • Informative websites:
    • www.ellenmacarthurfoundation.org
    • www.circle-economy.com
    • https://online-learning.tudelft.nl/courses/circular-economy-design-and-technology/

The Challenges Ahead

  • Threatened marine and coastal terrestrial species.
    • Around 11% of marine species and 14% of coastal terrestrial species are threatened with extinction.
  • Unevenly increasing population.
    • Over 500 million inhabitants.
    • Growing energy demands.
  • Rapid warming.
    • Warming 20% faster than the global average.
  • Intensive industrialization.
    • Putting pressure on available energy resources.
  • Tourism.
    • World’s leading tourism destination, receiving around 30% of international tourists.
  • Sources:
    • https://emuni.si/wp-content/uploads/2021/02/Review132_2020.pdf
    • https://www.medecc.org/wp-content/uploads/2021/05/MedECCMAR1complete.pdf
    • https://www.witpress.com/Secure/elibrary/papers/ST10/ST10019FU1.pdf

The Notion of Sustainable Development

  • Sustainable Development integrates Economy, Society, Environment, and Ecology.
  • Agenda 21, the Rio Declaration on Environment and Development, 1992
  • UNESCO Thessaloniki Conference on Environment and Society, 1997, emphasized Governance.
  • Reading Material: Wright, T. (2014). Education for Sustainable Development (pg. 1814 to 1816). In: Michalos, A.C. (eds) Encyclopedia of Quality of Life and Well-Being Research. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-0753-5_839

The Sustainable Development Approach

  • ESD (Education for Sustainable Development) considers:
    • Economy: pruning, etc.
    • Environment.
    • Society: use & distribution of fruit
  • Caring for the tree ensures sustainable fruit production through attention to Environment, Society & Economy.

Sustainable Development Components

  • Science/Technology, Culture/Awareness/Education, Society, Economy, Institutions, Environment, Governance
  • Effective governance and proper tools are needed.
  • SDGs (Sustainable Development Goals) elaborate on transformations needed for economy, etc.

Tools for Enhancing Circular Economy

  • Institutional and Legal Frameworks and Regulations
  • Financial and other incentives (green taxes, levies, charges, etc.)
  • Socioeconomic Technological: Appropriate, clean technology, de-carbonization of energy and energy saving.
  • Cultural Awareness raising and education (clean consumption and production, value of biodiversity and ecosystem services, intrinsic value of nature).

Critical Role of Agents for Circular Economy

  • Consumers & People: Consumption, lifestyle, and behavioral choices.
  • SMEs: Backbone of economies but critical gap in value chains.
  • Finance sector: Investment from public and private sources.
  • Scientists and academics: Technology innovation and scientific evidence.
  • Urban population: Cities as critical hub for resource use and efficiency.
  • Business: Manufacturing at the core, business model innovation, and scaling up.
  • Policy-makers: Sending coherent market signals through regulation.
  • International organizations: Consensus building and cooperation.

Sustainable Innovation 2030 Agenda for SD

  • 17 Goals, 169 Targets
  • Transforming our World – The 2030 Agenda for Sustainable Development (UN, 2015)

Sustainable Development Goals

  • Transition from WHAT to HOW.
  • Agenda 2030 and the 17 SDGs (169 Targets and 230 Indicators) provide a new hope and opportunity to speed up this process.

The 2023 SDG Index: Score and Rank

  • Figure 2.5 shows the SDG Index Ranks and Scores.
  • Finland ranks 1st with a score of 86.4.
  • Sweden ranks 2nd with a score of 85.7.
  • Denmark ranks 3rd with a score of 85.0.
  • United States ranks 46th with a score of 74.4.
  • Source: https://s3.amazonaws.com/sustainabledevelopment.report/2024/sustainable-development-report-2024.pdf

Sustainable Development in Operation

  • Circular economy is a major tool towards Sustainable Development.
  • Each facet (Culture/Awareness/Education, Environment, Society, Institutions, Science/Technology, CIRCULAR ECONOMY, Economy) should be operationally linked with the other two.

Circular Economy

  • Analogy of photosynthesis: CO2 (waste product of respiration) becomes raw material for organic matter construction.
  • Term has gained popularity among businesses and governments.

Defining Circular Economy

  • A model of production and consumption that involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products as long as possible to extend the life cycle of products.
  • Aims to transform our economy into one that is regenerative, reducing waste and ecological and environmental impact of anthropogenic productive activities.
  • Designing new processes and solutions for resource optimization and decoupling reliance on finite resources.

Visualizing Circular Economy

  • Transition from Linear to Circular Economy *Natural resources flow in a loop *Circularity Strategies
    • Lower ones: Recover, Recycle, Repurpose
    • Higher ones: Remanufacture, Refurbish, Repair, Re-use, Reduce, Rethink, Refuse
  • From a linear to a circular economy, showing the flow of natural resources (renewable and non-renewable), use, eventual landfill and incineration, and the progression toward circularity through various strategies.

Visualizing Circular Economy

  • The circular economy model: Less raw material, less waste, fewer emissions.
  • Illustrates flow between Raw materials, Production, Distribution, Consumption, Reuse, Repair, Recycling, Collection, and Sustainable design.

Circular Economy: Material Flow

  • Linear Economy: Materials in a Linear Economy create waste after use. TAKE - MAKE - USE - DISPOSE
  • Circular Economy: Materials in a Circular Economy are collected and reused after each use. REUSE - MAKE - USE - TRANSFORM - COLLECT

The Difference Between a Linear and a Circular Economy

FeatureLinearCircular
Step planTake-make-disposeReduce-reuse-recycle
FocusEco-EfficiencyEco-Effectivity
System boundariesShort term, purchase to salesLong term, multiple life cycles
ReuseDowncyclingUpcycling, cascading, high grade recycling
Business modelFocuses on productsFocuses on services
  • Source: https://kenniskaarten.hetgroenebrein.nl/en/knowledge-map-circular-economy/how-is-a-circular-economy-different-from-a-linear-economy/

The Principles Guiding the Circular Economy

  • The three principles required for the transformation to a circular economy are (Ellen Macarthur Foundation):
    1. Eliminating waste and pollution
    2. “Circulating” products and materials
    3. The regeneration of nature

The Need for Circular Economy Approaches

  • Conventional model of the economy: Households and Firms interacting with the Biosphere and physical environment, leading to pollution and waste.
  • THE LIMITS TO growth: Thomas Malthus and The Club of Rome.
    • Thomas Malthus, 1798: "The power of population is so superior to the power of the Earth to produce subsistence for man, that premature death must in some shape or other visit the human race."
    • The Club of Rome think tank, 1972: "If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next 100 years."

The Need for Circular Economy Approaches

  1. Increasing resource use is the main driver of the triple planetary crisis.
    • Extraction and processing of material resources account for over 55% of greenhouse gas emissions (GHG) and 40% of particulate matter health related impacts.
    • If land use change is considered, climate impacts grow to more than 60%, with biomass contributing the most (28%), followed by fossil fuels (18%) and then non-metallic minerals and metals (together 17%).
    • Biomass also account for over 90 % of the total land use related biodiversity loss and water stress.
  2. Material use has increased more than three times over the last 50 years and continues to grow by an average of more than 2.3 % per year.
    • The built environment and mobility systems are the leading drivers of rising demand, followed by food and energy systems.
  3. High-income countries use six times more materials per capita and are responsible for ten times more climate impacts per capita than low-income countries.
  4. Climate and biodiversity impacts from material extraction and processing greatly exceed targets based on staying within 1.5 degrees of climate change and avoiding biodiversity loss.
  5. Delivering on the SDGs for all requires decoupling, so that the environmental impacts of resource use fall while the well-being contributions from resource use increase.
  • Source: UNEP, GRO 2024 Annotated Key Messages Some Important Facts!

Natural Resources and the SDGs

  • Report studies natural resources essential for producing goods and services to meet human needs, based on the following categories:
    • Biomass: crops for food, energy and bio-based materials, as well as wood for energy and industrial uses
    • Fossil fuels: including coal, gas and oil
    • Metals: such as iron, aluminum and cooper
    • Non-metallic minerals: sand, gravel, limestone and minerals used for industrial applications
    • Land
    • Water
  • Assessments refer to material resources (biomass, fossil fuels, metals and non-metallic minerals), also referred to as "materials".

Earth Overshoot Day

  • Plots past Earth Overshoot Days from 1971 to 2023 and 1971-2024, showing the trend of earlier and earlier overshoot.
  • Source: National Footprint and Biocapacity Accounts 2023.
  • Data: data.footprintnetwork.org

Impact of Material Use

  • Material use has increased more than three times over the last 50 years, growing at an average of more than 2.3% per year.
  • Demand is driven by the built environment, mobility, food, and energy systems, which account for approximately 90% of global material demand.
  • Without action, material resource extraction could increase by almost 60% from 2020 levels by 2060, from 100 to 160 billion tonnes.

Drivers of Global Resource Use Trends

  • Figure 2.1: Global changes in population, GDP, GDP per capita and urban population.
  • Source: United Nations Department of Economic and Social Affairs (UN DESA World Population Prospects 2022; UN DESA National Accounts 2022).

Resource Use Analysis

  • Source: UNEP, GRO 2019 Annotated Key Messages Historical Analysis of Material Resource Use Global material extraction, four main material categories, 1970 – 2024, million tonnes. Global GHG emissions by gas, 1970 – 2021, million tonnes.

Income and Resource Use

  • High-income countries use six times more materials per capita and are responsible for ten times more climate impacts than low-income countries.
  • High-income countries displace environmental impacts to other income groups through global trade.
  • Per capita resource use and related environmental impacts in low-income countries have remained comparatively low and almost unchanged since 1995.

Climate and Biodiversity Impacts

  • Climate and biodiversity impacts from material extraction and processing greatly exceed targets based on staying within 1.5 degrees of climate change and avoiding biodiversity loss.
  • Sustainable resource use in the implementation of Multilateral Environmental Agreements (MEAs) is necessary to meet agreed climate, biodiversity, pollution and land degradation neutrality outcomes.
  • A sustainable and circular bioeconomy must prioritize the use of biomass to maximize well-being and minimize impact.

Waste Generation

  • Generation of municipal waste worldwide as of 2021, by select country (in million metric tons).
  • United States (2018): 265.2
  • China (2017): 215.2
  • Germany: 53.7
  • Japan (2020): 41.7
  • France 38
  • Source: OECD, Statista 2023
  • https://www.statista.com/statistics/916749/global-generation-of-municipal-solid-waste-by-country/

Waste Disposal Methods

  • Figure 2.13 illustrates Disposal Methods by Income.
    • High-income: Landfill 39%, Recycling 29%, Incineration 22%, Composting 6%, Open dump 2%, Anaerobic digestion 2%.
    • Upper-middle income: Landfill 54%, Open dump 30%, Recycling 10%, Incineration 4%, Composting 2%.
    • Lower-middle income: Open dump 66%, Landfill 18%, Recycling 10%
    • Low-income: Open dump 93%, Landfill 3.7%

Circular Economy in Practice

  • Products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, recycling, and composting.
  • The circular economy tackles climate change and other global challenges, like biodiversity loss, waste, and pollution, by decoupling economic activity from the consumption of finite resources.

Decoupling

  • Delivering on the SDGs requires decoupling, so that the environmental impacts of resource use fall while the well-being contributions from resource use increase.
  • Decoupling occurs when resource use or a pressure on the environment or human well-being grows at a slower rate than the activity causing it or declines while economic activity continues to grow.
  • Absolute decoupling in high-income countries can lower average resource consumption, distribute prosperity equally and maintain a high quality of life.

Decoupling Natural Resource Use

  • Conceptual diagram illustrating the relationships between Economic activity, Resource use, Environmental pressures & impacts, and Well-being, showing Resource decoupling, Impact decoupling, and Well-being decoupling.

Growing Materials Use Leads to Growing Environmental Impacts

  • Growth of materials use and GDP, 2011-2060

The Limits of Decoupling

  • “The hypothesis that decoupling will allow economic growth to continue without a rise in environmental pressures appears highly compromised, if not clearly unrealistic.” European Environmental Bureau, Decoupling debunked, 2019

Circular Economy: Renewable Energy

  • Oil and gas energy resources are incompatible with the idea of a circular economy.
  • A sustainable circular economy can only be powered by renewable energies.
  • Renewables need the support of batteries to store clean energy.
  • Barriers and potentials are dependent on the country's development stage.

Circular Economy: Renewable Energy

  • Interconnection between Circular Economy and Energy Transition

Circular Economy: Agriculture

  • Circular agriculture focuses on using minimal amounts of external inputs, closing nutrients loops, regenerating soils, and minimizing the impact on the environment
  • Circular agricultural practices: Mixed farming, Organic agriculture, Agroforestry

Circular Economy: Tourism

  • Travel industry actors have an important role as enablers within the circular transition.
  • All tourism actors need to learn and embrace concepts such as ‘deep cooperation’, ‘value co-creation’, ‘destination carrying capacity’, ‘system optimisation (instead of commercial silos maximisation)’, and ‘purpose-driven operations’.

Circular Economy: Tourism

  • A Virtuous Circle involving:
    • Selection, planning and booking through a sustainable process
    • Choosing a sustainable transport for the stay
    • Sustainable stay (Hotel establishments selected, local consumption, waste sorting…)
    • Feedback between tourists and/or professionals to improve the sustainable tourism global offer

The Way Forward: Doughnut Economics

  • Proposed to regard the performance of an economy by the extent to which the needs of people are met without overshooting Earth's ecological ceiling.
  • A visual framework for the progression of circular economy combining the concept of planetary boundaries with the complementary concept of social boundaries.
  • Source: Doughnut Economics Action Lab: https://doughnuteconomics.org/about-doughnut-economics

Seven Ways to Think Like a 21st-Century Economist

  1. Embrace the 21st Century Goal
  2. See the big picture
  3. Nurture human nature
  4. Think in systems
  5. Be distributive
  6. Be regenerative
  7. Aim to thrive rather than to grow
    *Source: Doughnut Economics Action Lab: https://doughnuteconomics.org/tools/2

Inclusion of Circular Economy (CE) Within Corporate Reports

  • Examples from Heineken, ASML, and BMW.
Heineken N.V. Annual Report 2022
  • Maximize Circularity to Reach net zero carbon
  • Reduce scope 3 emissions by 21% by 2030
ASML Annual Report 2022
  • ESG at a glance with SDGs aligned with
  • Environmental: RESPONSIBLE CONSUMPTION AND PRODUCTION
  • Social: QUALITY EDUCATION DECENT WORK AND ECONOMIC GROWTH
  • Governance: INDUSTRY, INNOVATION AND INFRASTRUCTURE and PARTNERSHIPS FOR THE GOALS