It's not just renewables that will transform the world's economy, By Jeremy Leggett, Recharge News, October 05 2016
Alongside the rise of renewables will be a second transformation of the global economy — one that may be just as important to reducing carbon emissions and combating climate change.
And like renewables, it will be good for business and the wider economy. In the 20th century, products were made, used and at the end of their useful lives either incinerated or sent to landfill.
In the 21st century, those products will increasingly follow circular, rather than linear pathways: products and their component parts will be recycled, remanufactured and refurbished.
This transition to circular economies is well summarised by Accenture analysts Peter Lacy and Jakob Rutqvist, in an excellent book, Waste to Wealth. “The old linear model of business is not only environmental suicide,” they write, “it’s also business suicide.” These are strong words for consultants making a living by advising some of the largest corporations in the world, entities not often noted for the ease with which they embrace fundamental change.
The authors go on to argue that the savings are too big to ignore — a $4.5trn reward for performing circular economy business models by 2030. They take no prisoners articulating the extent of the change inherent in a switch to a circular economy.
“It’s about eliminating the very concept of ‘waste’ and recognising everything has a value.”
Business models become very different in this world, just as they do in energy. Companies intent on embracing the circular economy have to go well beyond the point of sale, creating connections through product returns and customer engagement.
As energy companies move from centralised to decentralised power, they have to do the same: they are operating in new waters, where people are beginning to provide themselves with the energy they need for homes and commercial premises, and will increasingly do so if energy companies don’t find attractive new offerings consistent with the global energy transition.
The emissions prizes of both a renewable economy and a circular economy are huge. Adopting a circular economy could involve 70% cuts in carbon emissions by 2030 — through fewer emissions from landfill and incineration, and less use of raw materials — according to a recent study of five European economies by the Club of Rome think-tank.
Modelling a combination of strategies for renewable energy, energy efficiency and material efficiency (ie, the proportion of raw materals used in products, construction, etc), the study finds that gross national product would grow by about 1.5% across these five nations, with more than 100,000 additional jobs created, cutting unemployment by one third.
Champions are essential in this new paradigm, and they already exist.
Take the city of San Francisco. It has a 100% renewables target, and is taking policy steps consistent with that, not least requiring solar to be installed on or incorporated in all new buildings.
As long ago as 2002, it became a pioneer of the circular economy, taking on a target of zero waste to landfill or incineration by 2020. Within a decade of that it had reduced waste to landfill by 50%, winning the Greenest American City award in 2011 in the process.
It currently holds the North American record for recycling and composting, with an 80% diversion rate.
As for greenhouse-gas emissions reductions, its targets are a 40% reduction below 1990 levels by 2025, and a 80% reduction below 1990 levels by 2050, consistent with the Paris Agreement.
Continuing to target a renewables-powered economy and a circular economy in parallel will surely help it achieve those, inspiring other cities to do the same. Of course, it is possible in principle to go much faster than this.
The Centre for Alternative Technology’s Zero Carbon Britain plan gets the UK to decarbonisation as soon as 2030 without any outlandish assumptions about new disruptive technologies.
Bioenergy comprises more than a quarter of the fuel mix by then: a mix of biomass, synthetic liquid fuel/biofuel, and synthetic gas/biogas. The scope for using the recycling of existing biological material in this scenario is huge. Incredibly, global food waste alone would be the third-biggest emitter of greenhouse gases after the US and China, if it were a country.
And of course, there will be innovation en route by the new confederacy. This too is already happening. Take Dong Energy’s recent funding of the first full-scale power plant using bugs to clean up household waste.
Novozyme enzyme technology “washes” organic matter from unsorted waste from the equivalent of 110,000 homes, creating a slurry that can be turned into gas for use in power generation, or motor fuels.
The future can be both renewable, and circular. Sooner than you might think.