Monday, July 10, 2017

The circular economy


It’s a very trending subject so, as part of our series of articles on the new types of economy in the technological era, I will explain the circular economy.

Well, they say it’s new though personally I see it as an extension of how things were done 30 years or more ago.

If you’re older than 40 you’ll remember that, when you were a kid, if the TV broke, mom or
This guy!
dad called the technician. This man would come over, open the monster of a TV we all had back then, through the back and, after removed a whole lot of dust, he’d take a look around and pronounce something along the lines of –the cathode tube is broken- or “this internal fuse blew”. And he’d change the part out and be done. If it was something big, he’d take it to his shop. Or he’d tell you he’d be back with that missing part after lunch.

Either way, your television got fixed. The same way they also fixed your home appliances, your stereo and even the landline phone at home.

The broken pieces the technicians took with them, and either they’d fix those parts themselves, or they’d return them to the manufacturer so that they would refurbish them.

The process I just described is, in a nutshell, half of the circular economy. The other half, the newer one, involves having had your TV built using recycled materials to start with.

Technically speaking, the circular economy consists in production that aims to minimize or

eliminate the use of completely new resources, to maximize recycling and repurposing, and to ensure that the product is repairable; if not repairable, the emphasis passes to making sure that all components of the product are reusable or recyclable themselves. The overall focus is reducing the usage of new raw materials. It’s very distant from the current lineal production model of taking (mine, cut, etc.)/making/using/throwing away.

They say the circular economy is very good for the environment, but bad for companies. Is this true?

The resources of our planet aren’t endless, and that’s why we’ve been recycling since the 80s. The circular economy represents a logical follow-up to recycling. Back in the 80s and 90s we had grumpy people and companies that didn’t want to join the recycling wave, saying it was bad for companies; we have some saying the circular economy is bad for businesses.

Recycling wasn’t bad for business, though it did cut into the profits of those who specialized
Mining pollution on a river.
in commodities (the raw materials); when paper recycling started, it’s true that fewer trees were cut and there were job losses in that sector. With plastic recycling less oil was needed, but that drop in consumption was put to use in other types of materials. Metal recycling did not affect mining because the demand for ore is constantly going up. Employment did not go up because of recycling, but the opposite. The recycling systems were built from scratch, and its creation spurred a redistribution of labor, the creation of jobs that were actually better qualified, and thus, better paid. Nowadays, it’s the paper mills themselves that recycle the paper.

The same thing happens now: business models need to adapt to the circular economy. Let’s use as example the light bulb. Electric engineers know how to build light bulbs that will never burn out. Some of the original light bulbs built are still burning today, over a hundred years later. While it’s true that those light bulbs use insane amounts of energy, what I mean
Sorted cardboard going to recycling.
is that there could be light bulbs that didn’t break. But manufacturers won’t make them. The same way that Apple doesn’t want you to fix the latest iPad, so they made it impossible to open. Both want you to replace the product so they make more money.

Thankfully people and businesses are beginning to see the error of this practice. Number 12 on the Global Goals for Sustainable Development, drafted by the United Nations, and which 193 nations have agreed to pursue, reads “To guarantee sustainable consumption and production”.

And while many of them don’t boast, there are many companies –in fields that one would expect to be tough nuts to crack regarding these types of changes- introducing shifts to their production lines so that they turn towards a circular business model; to read about some of the cooler ones, here’s a few.

But cynics abound, and so do cushy business owners, who think that because their specific business models have been working out profitably for 30, 40, or 100 years, that why change?

The press can answer that very well: up till 20 years ago newspapers were printed, period. Today most of us read the news online, just check the printed production statistics of the last 2 decades for your favorite newspaper to see what’s happened to this 150-year old, very lucrative institution.

There are others who say that the circular economy cuts on the sales of new products, and that takes profits margins away from businesses.

Not long ago I spoke about the bad turn that the corporate mentality has taken in the last 30 years, a shift to caring exclusively about the bottom (profit) line, because the salaries and
Somehow, some still don't want to change...
bonuses of the executive staff depend on those profits, as do the dividends of shareholders; these people only want to make more and more money. The shift is reflected on companies’ abuse of the environment, and the unfathomable rise of deplorable work conditions and the gig economy, which I explain here. If we start building products that can be repaired, fixed, it’s true that their manufacturers’ profits would drop; but there would be a global rise in demand for qualified people and the parts needed to make those repairs; that means jobs, and more jobs. I don’t know you, but I would rather have more people with dignified employment, and the training of qualified workers who will earn more and get more benefits, than maintain a system that would keep people working with little to no benefits for corporations who don’t care about them at all.

After all, nothing resists the passage of time and, if you ask the experts, the technological revolution has just now started. The Sustainable Goals are a realistic way of tackling the issues of a growing overpopulation, the need to feed them and provide them with jobs, and help them become a productive part of societies worldwide; and, to attain all this while nor destroying the planet in the process, because we depend on this Earth to feed us and provide all the resources needed for all the things to keep us all alive and thriving.

Ultimately, the circular economy is but one gear of a productive, sustainable machinery that is setting out to provide us all with a viable future; we could say that it’s a gear that shifts us to a new mentality: one that proposes to provide for today while ensuring that it will continue providing tomorrow. It’s a model that requires the education, now and in the future, of many more people, so that working for the expansion of a circular economy will raise the standard of living worldwide. I can’t feel much sympathy for those who insist on defending the take/make/use/throw away model because I find it obsolete and selfish. Personally, I will extend my warmest welcome to those who bid on a future that is all at once productive, reasonable, healthy and sustainable for all, including our planet.


If you want to learn more about the Global Sustainable Goals, this is the UN official webpage for them.

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