A regenerative ‘Circular Economy’ includes more localisation of economic activity

The Circular Economy is advocated to replace and address the social and environmental damage done by the current ‘Linear Economy’ with its ‘take, make, dispose’ model, depleting finite reserves to create products that end up in landfill or in incinerators. It achieves its objectives through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling – reducing waste to zero. Some examples of such practice are presented on the website of the World Economic Forum.

The idea of circular material flows as a model for the economy was presented in 1966 by an economist, Professor Kenneth Boulding, in his paper The Economics of the Coming Spaceship Earth.

In the 70s, Walter R. Stahel, architect, economist and a founding father of industrial sustainability, worked on developing a “closed loop” approach to production processes. He co-founded the Product-Life Institute in Geneva; its main goals are product-life extension, long-life goods, reconditioning activities, waste prevention, advocating “more localisation of economic activity”.

With Genevieve Reday, he outlined the vision of an economy in loops (or circular economy) and its impact on job creation, economic competitiveness, resource savings, and waste prevention. Their Hannah Reekman research report to the European Commission, “The Potential for Substituting Manpower for Energy” (1976) was published in 1982 as a book (left) Jobs for Tomorrow: The Potential for Substituting Manpower for Energy. 

The Waste & Resources Action Programme (WRAP) a charity, which receives funding from the Department for Environment, Food and Rural Affairs, the Northern Ireland Executive, Zero Waste Scotland, the Welsh Government and the European Union was set up in 2000.  From its headquarters in Banbury it works with businesses, individuals and communities to achieve a circular economy through helping them to reduce waste, develop sustainable products and use resources in an efficient way. Below: the header for its March report:

On 17 December 2012, the European Commission published a document entitled Manifesto for a Resource Efficient Europe. This manifesto clearly stated that “In a world with growing pressures on resources and the environment, the EU has no choice but to go for the transition to a resource-efficient and ultimately regenerative circular economy” and outlined potential pathways to a circular economy, in innovation and investment, regulation, tackling harmful subsidies, increasing opportunities for new business models, and setting clear targets.

‘Resource’, the first large scale event for the circular economy was held In March 2014 and Walter Stahel joined the programme of 100 business leaders and experts. Many major stakeholders and visitors from across the globe attended. An annual large scale event is now increasing the uptake of circular economy principles. Circular Economy Examples may be seen on the website of the World Economic Forum and there are indications that some multinational companies may be cherry-picking related ideas which cut costs and increase profits.

Some will have reservations about the involvement of McKinsey & Company, which has issued two reports on the subject – one commissioned by the Ellen MacArthur Foundation.

Peter Day explored the work of the Ellen MacArthur Foundation and its associates on radio (In Business) on 23rd April 2015 – listen again here.

Ellen established this independent charity in 2010 and eloquently outlines the economic opportunity of a circular economy, giving the concept wide exposure and appeal.

 

 

 

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The Resilience imperative – Cooperative Transitions to a Steady State Economy

resilience imperative conatyLocalise West Midland’s co-founder, Patrick Conaty, has just published a book co-authored with Mike Lewis: The Resilience imperative – Cooperative Transitions to a Steady State Economy. It examines many elements of a resilient local economy, collating and critiquing many examples of how this has been achieved all over the world over the last 150 years.

The term ‘resilience ‘ is coming to the fore; the American organisation of that name focusses on building community resilience in a world of multiple emerging challenges: “the decline of cheap energy, the depletion of critical resources like water, complex environmental crises like climate change and biodiversity loss, and the social and economic issues which are linked to these”.

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Extracted from Pat’s interview with Naresh Giangrande from the Transition Network:

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NG: Why should someone involved in a Transition Initiative read this book?

PC: Mike and I were aware that although there have been many social and environmental change solutions developed, there has been a lack of strategic thinking. How can we join these partial solutions up? Through co-researching and co-writing the book over three years, we felt that we could clarify a Great Transition strategy for going forward by bringing together different fragments of positive change strategically and practically. We saw a need to bring ecological and cooperative economics together. Kenneth Boulding, a founder of ecological economics was the first to call for a Great Transition in the mid 60s, and saw the need to link cooperative and ecological economics together. . .

NG: You were involved in the 1990’s in The Real World Coalition seeking to bring together the third world development, green movement, social justice movement, small business, and micro credit movement.   Is this book in some way an expression of that impulse?

PC: The Real World Coalition united over 30 NGOs in the UK from these sectors and was led by Jonathan Porritt, Sara Parkin and Mike Jacobs. It was unique in that it spent three years developing a common manifesto among the NGOS. We need something like this again. How do we unite the fragments of change, to tackle the big issues? We have to come together .Yes this book is looking at the intervening years and what are the practical, tried and tested ways that people have been cooperating and  been successful in creating the pieces of local resilience . . .

NG: If you were to synthesize ecological and cooperative economics what would you come up with?

To root the integrated theory with practice, we looked at basic needs – food, shelter, finance, and energy services – and how could we meet human needs  co-operatively and what are the practical ways that have been pioneered to satisfy these needs and build a sustainable society  . . .

NG: I loved your tables at the end of chapter showing the costs to an average family.

PC: Yes we took a family of four and looked at what if we were addressing their needs in the new economics way and what would be the impact on their household budget.

NG: And the result?

PC:  We substituted usury based on high rates of compound interest with mutual fee based money and private energy and food monopolies with energy and food coops. We also show savings by converting housing to Community Land Trusts to take the land cost out of the market. The result we found is that there are significant savings to be made in each instance and the cumulative results show the practical potential for a steady state economy.

For an average family of four, you make a savings on energy and financing of over $360,000 over 25 years. Local organic food would be more expensive, but the net savings including food are still $280,000 over 25 years. We converted this to life hours which translated into saving 10 hours a week per household. This is significant . . .

NG: You have a keen sense of how there is nothing new. The REconomy project, need for land access, and social justice. Others have been over this ground many times before.

PC: We have lost sight of the historic and international struggles over that past 170 years for achieving land reform, economic democracy and for a co-operative economy.

As a result each generation typically starts with a blank page which is tragic because we lose sight of what these struggles can tell us so we can move forward faster and more effectively.

I am convinced that cooperative solutions lie at the heart of the new economy. We explore in diverse chapters the growing social solidarity economy internationally – which is generally below the radar – but none the less a powerful force. It is often unaware of its power, despite the fact that co-ops globally employ more people than multinationals . . . Some exciting work we show is going on with La Via Campesina uniting small farmers globally, in Quebec with co-op federations in Montreal and in the social co-ops in Northern Italy.

 

The Resilience Imperative Michael Lewis and Pat Conaty New Society Publishers 2012. Paperback: ISBN: 978-0-86571-707-7; ebook ISBN: 978-1-55092-505-0

Read this interview in full on the Resilience website and an interview with Mike Lewis here.