The importance of a circular economy and why we must move towards it

The annual Abu Dhabi Sustainability Week is once again upon us and it has led me to revisit an idea I often discuss with others: that of a different way of living, one that helps society, the environment and our finite natural resources.

Instead of an endless, excessive cycle of consumerism, the world today needs an economic model that reflects our social values and benefits the planet. In other words, what we need is a circular economy, a system where we employ principles of reducing waste, of repairing things instead of throwing them away and buying new things, of restoring, regenerating and recycling. But what we have in place today is not a circular economy but a linear one.

The origins of our current model date back to the period after the second World War when the global economy was in disrepair and we needed a way to revive it. That necessity led to the creation of what is called a linear economy, that is, taking from our planet’s natural resources and making products, most of which end up in landfills.

This model was created to support growth through constant buying of products, a global habit that fuelled consumerism and kept the economy moving.

In the mid-1960s, the surge in growth and manufacturing, called the Great Acceleration, led to exponential consumption patterns across all sectors.

The inventions in that period it is safe to say revolutionised our everyday lives. During that time, a Swedish engineer, Sten Gustaf Thulin, created the modern plastic bag. That definitive invention was followed in the next decade by an American inventor, Nathaniel Wyeth, who patented the plastic container as a cheaper, lighter, and more energy-efficient alternative to glass bottles.

Plastic inventions have their place but today as we face concerns of rising population and finite, diminishing resources, we need to rethink inventions and the way we design our products. We need to create businesses that serve the economy and our environment, and crucially, we need to learn to manage products when we no longer use them.

Given the ecological concerns of the world today, I believe that a linear economy is a function of the past. Businesses, cities and countries should start making the shift towards a circular model. After all, by 2030, according to a report by the consulting company Accenture, the circular economy could unlock $4.5 trillion in new economic growth. To unlock value at the scale required to make sustainable change though, we need collective solutions. Those solutions can emerge by harnessing the expertise of people in the fields of technology, operational excellence, financial structuring and governance. We also need the involvement of public, private and third party sectors. Only by taking a holistic approach will we be able to generate sustainable economic, environmental and social value.

Take the example of mining, an industrial activity synonymous with coal or mineral extraction, but have you heard of urban mining; a new business sector aimed at solving the challenge of electrical and electronic waste in the urban environment? The UN says there is 100 times more gold in e-waste than in one tonne of gold ore. Precious metals such as gold, silver, platinum, copper and palladium are routinely extracted from end-of-life mobile phones and computers. But while the world disposes of 50 million tonnes of electronic waste annually, less than a quarter of that is recycled.

To tackle this problem, it is key to design products that last longer and have minimal packaging. We deal with packaging on a daily basis – at grocery stores, for example. While fruit has a natural protective cover, for some reason it is marketed and sold in an extra layer of plastic. This layer, after only one use, gets thrown away, adding to the $80billion-120 bn worth of plastic packaging that is disposed of annually.

I have always been astonished to see how difficult it is to get children’s toys out of their original packaging, ploughing through metal wires, plastic rope, tape, all while the child you are opening it for is trying to help. So I was pleased to come across a great partnership between Amazon and Hasbro to design “Frustration-Free Packaging” that comes without excess packaging material, thereby being more environmentally friendly.

While all measures to reduce waste are commendable and necessary, we need a balance to ensure that environment-friendly solutions do not jeopardise commercial viability for industry.

In a previous article, I mentioned the importance of biodiversity to our existence. Our ways of managing waste, especially landfills, disrupt ecosystems. Products wash up on shores and are found in the ever-growing Great Pacific Garbage Patch. In the world today, most of our waste is neither composted nor recycled. There is immense opportunity to rectify this, especially as global municipal waste is set to nearly double by 2050. While governments usually think within their borders, ecosystems exist beyond borders, and waste travels.

But organisations are also working to reduce their carbon footprint, using new business models where they keep the product on their balance sheet and manage a reverse supply chain, thus gaining a competitive edge. I am sure many of you have been buying light bulbs that you eventually get rid of, but consider the merits of what Philips and Turntoo are doing: selling light as a service, factoring in daylight and allocating only what is required to keep a check on wasting resources.

Conscientious of its environmental impact, the French tyre manufacturer Michelin has made its tyres lighter and more durable by adopting a 4R strategy: reduce, reuse, recycle and renew. Even though 90 per cent of their environmental impact occurs when tyres are in use, the company decided to reuse old tyres to produce chemicals and to take back old tyres to recycle them into alternative products.

All the efforts of corporates and governments notwithstanding, nature has always been the ultimate resource-efficient ecosystem where one animal’s waste is another’s nourishment. Biomimicry should inspire and guide us to make better decisions using a closed-loop approach. Interestingly, two separate studies have found that mealworms and fifty types of mushrooms are capable of eating plastic and breaking down polyurethane. Perhaps these discoveries could hold solutions to contain and reverse the damage plastics do to the environment.

While all those innovative measures are something to ponder, the Circularity Gap Report 2019 has found that our global economy is only 9 per cent circular today. Improving this reality will require policymakers, businesses, and consumers to work together towards a common goal. When that happens and efforts are aligned, we will be able to make the necessary shift to a circular economy.

Sheikha Shamma bint Sultan bin Khalifa Al Nahyan is chief executive officer of Alliances forGlobal Sustainability