The circular economy. It’s been a buzz phrase floating around sustainability circles for a while now. But what does it really mean in practice? And what’s the potential for its application in our cities and everyday lives?
What is the "Circular Economy"?
In simple terms, the circular economy means closing the loop on waste. Rather than a linear model where a product is only used once and then discarded, a circular economy aims to keep products, components and materials at their highest utility, retaining full value.
Think of a world where waste becomes our biggest resource; a new way of production. Instead of following our usual “take, make, waste” strategy, we take our waste and reuse, repurpose, convert or redesign it: the new paradigm becomes “take, make, recreate”. The products we enjoy today become the resources of tomorrow.
The benefits that can be realised from the circular economy are more than just sustainability focused (hence the “economy” part to “circular economy”). According to the World Economic Forum, Australia is set to garner $26 billion in value from the circular economy by 2025. For the world it’s set to grow to $1 trillion.
Where did it come from?
There are several different schools of thought about where the circular economy concept came from (read about them here).
The idea of reuse has been around for several generations (think the Great Depression), but its application broadly across our economic systems was, perhaps surprisingly, only put forward in the late 1970s.
As we live on a planet with finite resources, the limits of which we are quickly reaching, the importance of this new way of thinking is paramount.
We still have a way to go before we can eliminate everything out of the waste stream that cannot be used for other purposes and put back into creating resilient, smart, cities, but the circular economy is a strong economic and environmental foundation with which to begin.
The key to this foundation is its applicability to many areas. Most people’s experience of reuse extends to things like recycling packaging. More than recycling, the circular economy involves applying innovative technologies and business models to support new modes of designing and, importantly, consuming.
In doing so, it creates new ways for us to interact with our food, energy, health, transport, even fashion – ways which are restorative and regenerative by design.
The perfect candidate
Urban areas—which continue to expand—currently account for 60% and 75% of global drinking water and energy consumption, respectively, and are responsible for 80% of greenhouse gas emissions. These sizeable environmental challenges are part and parcel of urbanisation.
However, the dense, developed areas of cities also make them the perfect candidates to explore the benefits of circular economy thinking.
As one of the most urbanised nations in the world, Australia is well-placed for an early start. Leading industries and businesses are working to close the loop on their activities by applying circular economy thinking, with increasing investment in technologies and facilities that can drive maximum resource recovery.
Cities on the move
Examples of cities moving towards a circular economy are beginning to emerge.
Amsterdam, capital of the Netherlands, has a plan to transform into a resilient city through the circular economy, focusing on optimising food, phosphate, waste, water, electricity and heat cycles. Last year it announced what it called “the largest testing ground” for the circular economy, with 3500 homes and 200,000m² of workspace to be built in the former industrial area of Buiksloterham. The space will be designed “as sustainably as possible” with buildings creating their own energy and businesses collaborating to repurpose waste and integrate supply chains.
Rotterdam, also in the Netherlands, is a port city that is responsible for 30% of Europe’s imports and exports. It’s seen as a key city to expand the power of the circular economy globally. A Circularity Centre has been established to progress the city to one where “nothing is lost”.
In Denmark, the Billund BioRefinery is a powerful example of the circular economy in action. It takes the notion that rather than being problems, our organic waste and wastewater can be resources. Wastewater is treated to produce clean water, with the sludge – along with household, business and agricultural organic waste – sent through to an energy factory. Here, through the process of thermal hydrolysis, the waste streams become high-value products like organic fertiliser, phosphorus, bioplastics and also biogas, which goes on to produce clean electricity and heat. The technology has caught the attention of many cities around the world, with contracts already signed for two Korean cities.
China is also putting in serious effort. In Tianjin, steel manufacturers have developed strong relationships with nearby companies, from cement producers to auto part manufacturers, to trade waste like blast furnace slag for iron scraps and even steam – reducing cost for both inputs and waste disposal. The Tianjin Ziya Circular Economy Industrial Park includes 120 companies that can recycle up to 1.5 million tonnes of waste a year, recovering valuable resources like copper and aluminium. Also in Tianjin Ziya, sewage treatment, water reuse and rainwater harvesting have been integrated to save energy, and has led to 100% water reuse.
Big benefits
The circular economy will spark innovation and creativity as products become more focused on reuse. It will create a whole new economy and jobs around reuse, refurbishment, recycling and remanufacturing – the jobs of the future. Cities will also become more resilient to volatile commodities prices, for supplies used in production, such as oil and minerals. The new jobs will also provide increased economic resilience for cities.
But companies, as well as consumers, will have to step up to help realise the potential of a circular economy. The rates at which products are collected at end use will need to increase dramatically to enable them to be reused as feedstock into other processes. Goods will also need to be designed such that their components can form part of a materials cycle – that is they must be designed with disassembly and reuse in mind.
Working towards a more circular economy is becoming a necessity. As resources dwindle and it becomes harder to get the raw materials needed to uphold our standard of life; society must become smarter and more efficient.
Cities that choose to adapt to a new paradigm more in tune with natural cycles are set to see massive economic, social and environmental benefits.
With the circular economy, there's a world of opportunity to re-think and re-design our cities to make them more liveable and resilient.