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A Circular Economy: Why, and How?Avfall Norge Conference
Dr Dominic HoggChairmanEunomia Research & Consulting
5th June 2018
Outline
1. Commodity Prices2. Why Change?3. The Economic Upside4. Delivering the Upside
Commodity Prices
Underpinning Analysis
• ‘the costs of making stuff are becoming unpredictable & expensive’… ‘resource scarcity and tighter environmental standards are here to stay’
Source: Ellen MacArthur Foundation 2012• ‘In a world of high and volatile resource
prices, a CE offers huge business opportunities’
Source: Chatham House briefing paper
Commodity Prices as a Driver?
Commodity Prices as a Driver?
Why?
A Seductive Identity?
Rising demand +
increasing volatility =
high commodity prices & a circular economy
What if prices fall?
Index of Primary Commodity Prices (2005=100)
Source: IMF
Index of Non-Fuel Primary Commodity Prices (2005=100)
Source: IMF
Key Observation 1
1. A ‘view’ on future commodity prices is not a sound basis for businesses to change what they do
Why Change?
Climate Scenarios
Source: Climate Analytics
Renewables or Efficiency?
Source: IRENA
GHG Impacts
-23 000 -18 000 -13 000 -8 000 -3 000 2 000
Paper / card
Plastic
Glass
Textiles
Steel
Aluminium
Garden (composting)
Food waste (AD)
WEEE
Others
Paper / card
Plastic
Glass
Textiles
Steel
Aluminium
Garden (composting)
Food waste (AD)
WEEE
Others
Landfill
Incineration CHP
Incineration
Emissions, kg CO2 equivalent per tonne of waste managed
RESIDUAL WASTE TREATMENT
RECYCLING & COMPOSTING
AVOIDED PRODUCTION (WASTE PREVENTION)
Resource Efficiency and Climate Change
Source: Green Alliance
Moving to High Recycling Rates
Source: Eunomia
Managing Wastes in a ‘More Circular’ Manner
-30.00
-25.00
-20.00
-15.00
-10.00
-5.00
0.00
5.00
Tentative Transition Positive Transition
GHG
Emiss
ions
(mill
ion
tonn
es C
O2eq
) Waste PreventionPreparation for ReuseDry RecyclingComposting DigestionMBT / C&D TreatmentIncineration - DomesticIncineration - EuropeanLandfill / Land Disposal
Source: Eunomia
Key Observation 2
1. A ‘view’ on future commodity prices is not a sound basis for businesses to change what they do
2. Responding to the threat of climate change will not be possible without radical changes in production and consumption: the CE is a means to achieve this
The Upside
Effects on Gross Value Added (GVA) (incl indirect and induced effects)
-2 000
0
2 000
4 000
6 000
8 000
10 000
12 000
TentativeTransition
PositiveTransition
GVA
of S
witc
hes,
all
figur
es fo
r 203
0,
incl
udes
Typ
e 2
mul
tiplie
r effe
cts,
£
milli
on
Circularising Flows Prevention Recycling and Prep for Reuse TreatmentLandfill, backfilling etc.
Textiles, EEE and Furniture
Mainly food
Source: Eunomia
Key Observation
Source: Club of Rome
Key Observation 3
1. A ‘view’ on future commodity prices is not a sound basis for businesses to change what they do
2. Responding to the threat of climate change will not be possible without radical changes in production and consumption: the CE is a means to achieve this
3. There are additional upsides for businesses and the economy: jobs, and GVA
How can we Access the Benefits?
The Hierarchy
Prevention (incl reuse)
Preparation for Reuse
Recycling
Other Recovery
Disposal
Design
as Viewed by Designers
Savings in Embodied Energy and GHG Emissions Savings in
Embodied Energy, GHG Emissions and Value Added
Too much funding at base of the hierarchy on infrastructure
£
An Industrial Strategy
How Will (More) Businesses Change?
Ø (Some) citizens are seeking more responsible ‘choice editing’ from producers / retailers
ØBusinesses want confidence that citizens will ‘accept’ a change in business model
ØForward thinking businesses want to know they are ‘on the right path’
ØGovernments will act if they have the mandate to do so from citizens
ØAction is required from citizens, businesses and government…
Ø… a co-evolutionary phenomenon
Key Observation 4
1. A ‘view’ on future commodity prices is not a sound basis for businesses to change what they do
2. Responding to the threat of climate change will not be possible without radical changes in production and consumption: the CE is a means to achieve this
3. There are additional upsides for businesses and the economy: jobs, and GVA
4. They will flow from changes made by citizens, businesses and government
