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Home » Circular Economy, Resource Efficiency

Resource efficiency is not a choice, it is inevitable

Submitted by on 28 Sep 2015 – 09:01

Calling for a paradigm shift towards circular economy, Jo Leinen, member of European Parliament says we can’t continue with a business as usual scenario any more. if we do, immense pressure on availability of resources will arise and potentially limit chances of growth and prosperity

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According to several estimations, there will be nearly 9 billion people living on this planet by 2050 which will all have similar expectations for a high standard of living. By 2030, there will be 3 billion extra middle-class consumers whose living standards would have risen. This is definitely  good news but worrying at the same time. If we continue with a business as usual scenario, there will be immense pressure on availability of resources and this could potentially limit the chances of growth and prosperity for such a large population. With the expectation that the demand of resources will triple by 2050 and the demand for food, feed and fibre is projected to increase by 70 percent, there is no doubt that we will exceed our planet’s boundaries, the safe thresholds within which humanity can continue to develop and thrive for generations to come.

Crossing these boundaries could generate abrupt environmental changes and irreversible damages to our ecosystems. Resource efficiency is not a choice, it is inevitable. Our choice is whether to develop it now, or whether we wait until we are forced to when critical resources are exhausted and expensive

The changeover from resource-inefficiency

The challenge in hand is to transition from a resource inefficient infrastructures, resource inefficient economic and financial systems, resource inefficient business models and resource inefficient behaviour. The overarching objective is thus to decouple resource use and its impacts from economic growth.

Of course that requires more than a legislative approach; it requires changes in our everyday life, and that in turn requires profound changes in thinking, behaving, producing and consuming as well as economic and social structures. Today’s economy and consumption patterns are based on a linear ‘take, make, dispose’ model with a ‘fast turnover’ principle. Many gadgets, especially mobile phones or tablet computer, are often designed to be replaced after two or three years, well ahead of their expected lifetime. This leads to some critical resources getting scarce while increasing volumes of waste and pollution, thereby imposing greater threats to welfare and wellbeing.

The solution is a circular economy, where products are designed to last and can be repaired, reused, recycled and re-manufactured

The development of such a resilient, resource efficient economy does not only implicate the decoupling of growth and the use of natural resources, but offers major benefits in terms of job creation, innovation and environment protection. The EU needs to start the transition to a circular economy to ensure sustainable growth, resilience and benefits for the society.

To achieve this, it requires an industrial transition towards a well-functioning economic system where materials are sustainably sourced, reused and recycled in order to limit the amount of virgin raw materials ‘entering’ the cycle as well as the end of life waste ‘leaving’ the cycle. In the future product policy, products are designed to last, to be repairable, reusable, recycled and re-manufactured.

The consumer should be informed about the ecological footprint of the product. Once it is purchased, there should be an opportunity to get upgrades and updates to improve its performance. Planned obsolescence or the need to replace the product every two or three years to get a better performance will be a thing of the past.

In addition to the advantages for the consumers, the circular economy offers benefits for companies as well

It’s increasingly evident that there is a limit to growth in terms of availability of natural resources, which means our companies must respond to increasing costs and scarcity of natural resources. In the business-as-usual scenario, companies tend to become more dependent on resource imports and vulnerable to price hikes.

To avoid this, they have to leave this path and become more resource efficient and resilient out of a logical, ecological and economical reasoning.

Reuse, recycling and re-manufacturing of products thus reduces the threat, from a business point of view, to competitiveness, profits and business continuity. Furthermore, all services around a product in a circular economy – from sustainable design, to maintenance, upgrading, repair, reuse and re-manufacturing – require more labour and will thus create new jobs.

Setting the right incentives to decouple economic growth from natural resource use

The need of the hour is a coherent policy framework for the transition towards a circular economy. A policy framework with a carrots-and-sticks approach: binding targets to become more resource efficient combined with rethinking taxation in a way that it will be beneficial for all: shifting taxation from labour to the consumption of non-renewable resources and removing VAT from recycled materials.

Especially at a point where Europe faces multiple crises, we are in a situation where we need to increase our competitiveness and become less dependent on resources imports. Therefore, Circular economy is  a win-win-win policy and Europe can’t afford to delay action any more.