The Environmental Perspective for Production
In the past few decades, sustainability concerns have been a rising topic surrounding firms’ production structures and increasing growth of countries. All concerns can all be followed back to the current industrial economy that has always followed “a linear model of resource consumption that follows a take-make-dispose pattern.” (World Economic Forum) This model consists of companies extracting raw materials to create their products, which are then sold to consumers who end up throwing the products out when they are no longer useful. It creates a direct chain from using up resources to later discarding them at the end of their lifespan, which translates into depleting resources at an unsustainable rate and creating vast amounts of waste very quickly. In order to combat these environmental issues, society must look towards transforming our linear economy into a circular economy.
Although the idea is fairly new, the thought behind a circular economy has increased in popularity due to the growing transition to renewable energy resources. This production model aims to continue to increase economic prosperity while increasing the utility of already made items and decreasing the amount of waste that is produced. Currently, “the U.S. produces more than 30 percent of the planet’s total waste, though it is home to only 4 percent of the world’s population.” (BradFord) And if things do not change, this wastefulness will only increase as the population increases. The three main goals of a circular economic model are to redesign manufacturing systems that will create no waste or greenhouse gas emissions, redistribute already made products to keep them in use, and allow for natural systems to regenerate themselves. So instead of firms creating products from all new resources, older products are recycled to be used as the foundation for new merchandise. It is a perspective that redefines what a growing economy looks like, challenging the new human instinct that has developed within our materialistic society. By businesses integrating this model into their production systems, it will allow for a reduction in emissions and a rebuilding of natural and social capital.
To begin the transition to a circular economy there first must be a change in mindset. As a society, we have to stop thinking about economic growth “as the consumption of finite resources.” (Ellen Macarthur Foundation) In most cases this is not an explicit thought that consumers have when they are out shopping, but not too many stop to think about the time, energy, and resources that went into creating the goods they purchase and where they came from. By becoming more aware of the intermediate goods that make up final products, the problems of overharvesting and unsustainably depleting certain resources become much more apparent. The circular economy also challenges the human instinct of consuming and later discarding. A great example of this habit is the need to abandon one’s current iPhone when the new iPhone is announced and becomes available. Many people upgrade to the new version while still having a perfectly functioning phone in their possession. This need to have the latest technology adds to an increase in e-waste, and if the old phone is no longer used, all the precious metals and natural capital have now gone to waste. This is just one example, but this human made habit can be seen all over various markets.
According to the Ellen Macarthur Foundation there are three fundamental principles that outline the circular economy. They can be described as 1) resource management, 2) maximizing utility through circular rotation, and 3) preventing any negative externalities. Resource Management involves protecting finite natural resources while stabilizing and enhancing renewable resources that can now be substituted. This first principle is the backbone to transitioning the economy because it aims to prevent further dependency on natural capital and unsustainable depletion. Stock management is the most important factor as it will allow new raw resources to be extracted while also ensuring their restoration. In this section, the need for dependency on renewable energy is introduced and how fossil fuels must be substituted out. By relying on renewables society can begin allowing the earth to heal and restore all of its depleted resources. The decrease in emissions will also lead to a much cleaner and healthier environment.
The second principle is where the circular rotation finally takes place! By diverting people’s waste out of the waste stream and into being used as inputs, there can still be maximized production and economic growth. Production begins with an individual parts manufacturer that then transitions production to the product manufacturer, finally leading to the service provider who sells the product to the people of society. But now society is separated into consumers and users dependent on the product. A person becomes a consumer when buying food and other items that are physically consumed, and the waste from these products are returned to the earth or used as production inputs in the forms of biogas, biochemical feedstock, compost and many more. These natural products can be naturally broken down and help the process of regeneration instead of simply taking nutrients from the earth. A user is someone who buys a product from a company but is moreso licensing or renting the item as it will always be returned in the end. At the end of the product’s life, the user can opt to fix it themselves or take it to the service provider to maintain and prolong the use. If the product is unwanted it can be returned to the product manufacturer to be reused or redistributed, and if it is no longer working the user may issue it back to the parts manufacturer where the product can be broken down and parts saved for future manufacturing. Each item will always return back to the manufacturer and not to a landfill. This feedback loop system decreases the amount of waste that is produced beginning at the level of production. Products are not used at their highest level of utility both technically and biologically. It creates an almost zero waste system that is much more sustainable for future generations than the current production systems.
The final principle is to ensure that any waste or negative externalities are prevented as much as possible. Negative externalities are impacts that affect a third party who did not choose to be involved in the first place. An example of this is the negative health impacts people may suffer by living near coal plantations. Designing out these effects focus directly on improving the community’s social benefits. Here organizations take steps to see that the circular economy is working as an effective system; if there is a failure then the system must be redesigned to further progress. This section may seem as the improvement sector as any error will be seen and therefore adjusted to continue maximizing all production in principle two.
Setting the foundation for future social and environmental growth by transitioning to a circular economy may come with some unexpected consequences. By redesigning the production industry and removing raw materials from the equation, there is a possibility of a whole job sector disappearing. Without the need of extracting raw materials, mining jobs will become extinct, resulting in the need to relocate these people to a new industry, a surge in unemployment, and an increase in job dislocation. These effects can be countered by ensuring individuals jobs in the green sector like recycling industries that will need to be built during the transition. Another unforeseen consequence may be that remaking/recycling items will be harder for certain resources than extracting raw materials from the earth. This includes an increase in energy generation that will have to be used in recycling plants to separate usable materials. If clean renewable energy is not being used, then there is a chance that the new production model may lead to an increase in emissions. But again, by using all renewable energy this dilemma can be avoided! (World Resource Institute)
While introducing this concept throughout the whole economy may seem unrealistic, many companies have already started to incorporate segments of the circular model into their production companies. Not that you should go out and buy a new iPhone if your current one is still in good condition, but it may be a relief to hear that Apple recycles old unusable iPhones and fixes and resells phones that are in good conditions! Another example of this is the backpack company Jansport; they have a lifetime warranty policy that ensures they will fix your backpack for life. All you have to do is ship it to them. They are one of many companies trying to close their production loop to reduce the amounts of inputs required. So if a big company can begin making the switch, why can’t the rest of the economy? Focusing on what will benefit society as a whole by decreasing waste, emissions, and restoring environmental quality is the change that needs to be made soon, and the circular economy is one of the new ideas that will help accomplish this.
Illinois Sustainable Technology Center Blog, 19 Mar. 2020, blog.istc.illinois.edu/.
“Environment.” Apple, www.apple.com/environment/.
“From Linear to Circular-Accelerating a Proven Concept.” Towards the Circular Economy, reports.weforum.org/toward-the-circular-economy-accelerating-the-scale-up-across-global-supply-chains/from-linear-to-circular-accelerating-a-proven-concept/.
“Lifetime Warranty for Backpacks and Bags.” JanSport, www.jansport.com/customer-service/lifetime-warranty.html.
Moss, Kevin. “Here’s What Could Go Wrong with the Circular Economy-and How to Keep It on Track.” World Resources Institute, 30 Jan. 2020, www.wri.org/blog/2019/08/here-s-what-could-go-wrong-circular-economy-and-how-keep-it-track.
“Trash in America: Frontier Group.” Trash in America | Frontier Group, 12 Feb. 2018, frontiergroup.org/reports/fg/trash-america.
“What Is a Circular Economy?” Ellen MacArthur Foundation, www.ellenmacarthurfoundation.org/circular-economy/concept.