We’re proud to bring you the second of the Salt Ideas Essays: 15 pieces of expert thought leadership on the innovations and ideas that will change the world for the better. Switching from a linear to a circular economic system would slash our environmental impact and trigger societal transformation, writes Ellen MacArthur.
There’s growing momentum in industrialised economies behind the idea of a circular economic system, where growth is gradually decoupled from the consumption of finite resources and where biological and technical flows of materials are kept at their highest value at all times.
The circular economy is a positive vision for a prosperous global economy. Regenerative by design, it aims to optimise the distinct material flows, with biological materials returning to the food and farming system, and technical materials being kept in production and use loops without loss of quality.
The linear, take-make-dispose economy, inherited from the industrial revolution, which fueled development in the 20th century, was dependent upon reliable access to cheap materials and energy, and plentiful credit. The context is now distinctly different, with slow or absent growth, and increased resource price volatility. Traditional solutions and gradual efficiency gains will not suffice.
Launched last June at the European Commission’s stakeholder conference on the circular economy, our most recent report explored the potential for a different model in Europe. Produced by the McKinsey Center for Business and Environment and supported by SUN, Growth Within compared the current developmental path with a scenario where circular economy principles were adopted for mobility, built environment and food. It presented an alternative vision for the future of Europe’s economy, where maximising the utility of existing assets creates growth. The report revealed that currently, the average European car is parked for more than 90 per cent of its lifespan, office space is used less than 50 per cent of the time and more than 30 per cent of food is waste throughout the value chain.
Overall, the research found that the European economy is currently capturing just five per cent of the original value of the raw materials it uses. Growth Within concluded that Europe can take advantage of the impending technology revolution to create a net benefit of £1.8 trillion by 2030, twice the benefits expected on the currentdevelopmentpath Thecirculareconomywouldalsohave significant impacts on the environment for Europe: carbon dioxide emissions would halve by 2030 relative to today’s levels. Primary material consumption measured by car and construction materials, real estate land, synthetic fertiliser, pesticides, agricultural water use, fuels and non-renewable electricity could drop 32 per cent by 2030 and 53 per cent by 2050 compared with today.
The circular economy is fast gaining traction globally and there are already numerous examples of early adopter businesses, governments and innovators working at the forefront of a wave of positive economic development. At the core of the transition, is the importance of bringing together a number of elements into an effective system – careful design for ease of disassembly, for instance, the elimination of toxicity, not to mention re-invented logistics, IT-enabled asset tracking, and business models relying on the provision of a service rather than the transfer of product ownership, to name just a few critical elements. Creative cooperation and cross-disciplinarity are encouraged throughout.
Taking full advantage of these opportunities and creating a system capable of rebuilding stocks of economic, social and natural capital will require a re-thinking and re-designing of the future. Our research and analysis indicates that the circular economy is a significant opportunity for businesses and society alike. Ultimately, reaching this goal will require pioneering ambition, combined with creative and varied cooperation and cross-disciplinarity action.
ABOUT ELLEN MACARTHUR
Dame Ellen MacArthur is a retired sailor who broke the world record for the incredible feat circumnavigating the globe solo. Her foundation aims to accelerate a transition to a regenerative, circular economy.
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