By TERRI BUTLER
With eight billion people on the planet it has never been more important to think carefully about the way that we use our planet’s resources.
We cannot continue indefinitely with the old linear economy approach of take, make, waste. As is often pointed out, in a world in which there is 300 times more gold in a tonne of iPhones than there is in a tonne of gold ore, it is clear that we need to change the way resources are used.
This is easier said than done. It requires a rethink of how products, services, and business models work. And it requires decoupling economic growth from the consumption of virgin resources.
Circular economy thinking has developed in order to rise to these challenges, and to help respond to the crises we are facing together. In simple terms, ‘circular economy’ means:
- Designing out waste and pollution at every stage of production, use and end-of-life;
- Keeping products and materials in use at their highest possible value; and
- Regenerating natural systems (for example through water, food, organics recycling, the removal of toxic waste, or tree planting).
Scaling up circular economy in Australia means a lot of different things. It means recycling and resource recovery, of course. It also means taking a systems-thinking approach to the way that we design, manufacture, and package. It means thinking about the impact of business models on the way that products and services are used and maintained. It means considering whether there may be additional uses for byproducts of existing or developing processes. ‘Circular economy’ is a necessarily broad term because it is really a paradigm shift for resource use.
Reducing consumption of virgin resources and scaling up circular economy has the benefit of helping in the global effort to address both climate change and the biodiversity crisis.
Global circular economy leaders at the Ellen Macarthur Foundation say that energy efficiency and switching to renewable energy would only address 55% of global emissions, and that to reach net-zero, we also need to change the way we make and use products, materials, and food.
They say that circular economy can help address the remaining 45% of emissions that the energy transition doesn’t address. For example:
- By eliminating waste and pollution, we reduce greenhouse gas emissions across the value chain;
- By circulating products and materials, we retain their embodied energy;
- By regenerating nature, we sequester carbon naturally.
PwC recently estimated that scaling up circular economy in Australia would save 165 million tonnes of CO2 per year by 2040.
Scaling up circular economy and decoupling growth from virgin resource use can also help mitigate the need for human activity that causes biodiversity loss. The biodiversity crisis affects ecosystems, water cycles, food security, and, ultimately, life on earth. An approach that reduces impacts on habitats and the natural environment more broadly is important as we face this challenge together. Australia, as a world leader in mammal extinctions, has a particular interest in, and responsibility to act on, the biodiversity crisis.
Circular economy is also an economic opportunity. In the same report, PwC estimated that going circular would generate almost $1.9 trillion in economic benefits for Australia over the next 20 years.
With all of the challenges and opportunities in mind, circular economy has emerged as a critical framework as we transition to a resource and carbon constrained future. Change is imperative.
That’s why Circular Australia is on a mission to scale up the circular economy. We’re an independent, not-for-profit body that is working with industry, business, researchers, government, and the community across the country to accelerate the adoption of a circular approach.
Australia is not yet well advanced in the journey to circularity, but there are promising signs. In October we welcomed the communique from the meeting of the nation’s environment ministers, which contained a significant leap forward in acknowledging the need for circularity. They agreed collectively to ‘work with the private sector to design out waste and pollution, keep materials in use and foster markets to achieve a circular economy by 2030.’ It is terrific to see the acknowledgement of the need for circularity implicit in the language of the communique.
Then, in November, we were excited to see the Albanese Labor Government announce the creation of the new Ministerial Advisory Group on the Circular Economy to be chaired by Professor John Thwaites AM. In announcing it, Minister Plibersek acknowledged that: ‘A circular economy will create jobs while reducing greenhouse gas emissions, pollution and the amount of waste we put into landfill.’
Her colleague, Minister Husic, supported the announcement and said: ‘A circular economy will ensure that we are on track to make these changes and support the energy transformation. It’s a great opportunity to create manufacturing systems that are optimised to be less resource intensive, produce less waste, and have less impact on the environment.’
It is terrific to see the Ministers for Environment & Water, and for Science & Industry, working together on scaling up circular economy, and the fact that they are doing so signals that the Albanese Labor government recognises the circular opportunity in manufacturing, and in the deployment of signature policies and programs such as their National Reconstruction Fund and Future Made in Australia policy.
The new government has the opportunity to build on advances made by the states, and on the pre-election commitment to include circular economy principles in procurement policy, along with recycling and waste policy.
All governments can consider regulatory frameworks and investment opportunities that support and promote circular economy. In parallel, business, industry, academia, and households can all take action to change the way resources are used. At Circular Australia we would love to see governments working in partnership with stakeholders to develop a National Roadmap for circular economy, so that Australia can take advantage of the opportunities and benefits transitioning will bring.
We also consider it important that there be a shared understanding of how we set targets and measure progress on circularity here in Australia. That’s why we recently launched a national dialogue on circular economy metrics, alongside our latest research on metrics in partnership with the Sustainable Futures Institute at University of Technology, Sydney.
We know that there is a growing appetite amongst the Australian community for fast tracking circular economy. In partnership with the Commonwealth Bank — a member of our Finance & Investment Taskforce — we recently published consumer research which showed that the rising cost of living, extreme weather events, and supply chain disruption have brought waste and consumption into sharper focus for Australians, with 85 percent of consumers concerned about the issue.
Published in Commbank’s latest Consumer Insights Report, that research addressed Australia’s material use — on the most recently available data, we’re the largest material user per capita in the Asia-Pacific, and the third largest in the OECD. At the same time, our economic output per kilogram of materials used (also known as material productivity) is much lower than the OECD average, and among the lowest of any OECD country. The good news is that there is plenty of upside for us in improving against these measures, and everyone can make a contribution.
Australians have an appetite to directly participate in circular economy, as can be seen from the increase in recycling and reduction of waste per capita over time. However, the largest opportunities in circular economy are arguably those that will be driven by industry, and business, supported by the right policy settings from government and the best advice from academia and experts.
Industry and business can help with the transition in multiple ways. And there are some big opportunities to demonstrate to others the practical and tangible benefits.
In my home state of Queensland, the Olympics is the main game. The President of the Organising Committee, at his recent Queensland Media Club address, spoke about innovation for the Olympics in terms of resource recovery, noting that at the Tokyo Olympics ‘5,000 medals were created using 100% recycled materials, including 6.21 million mobile phones, and 79,000 tons of donated electronics.’ Alongside the questions of circularity in the conduct of the Games is the opportunity to incorporate circular economy practices into the projects that will be the Games’ long-term legacy. This is an opportunity for every firm, government, and government-owned-corporation with an interest in the Olympics — from building infrastructure, to powering the Games, to promoting tourism, and every other aspect, to demonstrate the economic and environmental benefits of transitioning to circular economy.
Similarly, there are circular economy opportunities ready to be developed in infrastructure, energy, water utilities, construction, manufacturing, finance, healthcare, planning, agriculture, and almost every imaginable area of economic activity. Combined with growing consumer and household interest these opportunities are exciting, meaningful, and crucial. Australia is poised to take advantage of them, through the exercise of will, effort, and collaboration. Let’s get to it.
Terri Butler is the Chair of Sustainable Aviation Fuels Alliance of Australia and New Zealand, and a non-executive director for the Smart Energy Council. She was previously the member for the Queensland seat of Griffith and Labor shadow minister for the Environment, and former Chair of Circular Australia. Prior to being elected to the parliament, Terri was a practicing solicitor, leading Maurice Blackburn’s Queensland industrial law practice.
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