A Paradigm Shift That's Getting Around
WHY YOU SHOULD CARE
Thoughtless waste and overconsumption have to stop. Especially before China and India catch up with our bad habits.
Pooja Bhatia is an OZY editor and writer. She has written for The Wall Street Journal, The New York Times and the Economist, and was once the mango-eating champion of Port-au-Prince.
By Pooja Bhatia
By now it’s clear that the economic circuitry of the postindustrial order is worn and frayed, and, in some places, blown out.
Thank goodness someone’s trying to rewire it.
Say hello to the futurists imagining a new economic model: the circular economy. For this cohort, the answers to global ills — our ceaseless consumption; addictions to fossil fuels and high-fructose corn syrup; overfilled landfills and polluted seas — require a wholesale paradigm shift. It’s not just about buying less, being stewards of the environment or reducing consumption. The circular economy requires redefining economic success, whether you’re a consumer, manufacturer or government.
Ideas about the circular economy are gaining traction at places like the World Economic Forum. Perhaps more important, multinational corporations like Royal Phillips and Unilever are testing whether “circular economy” can become more than a buzzword.
It would require rethinking traditional measures of economic success, like GDP growth and short-term profits…
Like many futurist concepts awaiting proof, the circular economy still lacks a precise definition, but spend enough time with the white papers and you’ll start to get an idea. It involves buying less, but it doesn’t mean getting less. It involves recycling but goes beyond it. Moving to a circular economy would require rethinking traditional measures of economic success, like GDP growth and short-term profits, as well as traditional constraints, such as the price and availability of commodities.
And forget planned obsolescence (and forgive the pun, too): Consumer goods would be designed for long-term use and upgrading, instead of being thrown out when they wear out or a new version comes along.
This is all in contrast to the so-called linear model of consumption that took hold in the postwar era in industrialized countries — the “take-make-waste” system, in which we go to the store, buy a washing machine, cart it off to the dump when it falls into disrepair 10 years and 2,000 washes later, and then buy a new one. Rinse, repeat. Rinse, repeat.
From the viewpoint of circular economy enthusiasts, it’s our linear economic system that has turned us into the fat, wasteful, impatient, materialistic creatures we are these days. Apparently we’re not even developed countries anymore, or part of the “global north” or the West. We’ve become Fat Nations, places where the landfills will kill us if the sugar doesn’t first.
In contrast, the circular business model would look more like this: We lease an amazing washing machine, one so well constructed that it can last 10,000 washes. When it finally breaks down, we return it to the maker to be refurbished and leased again. If the machine is beyond redemption, the manufacturer can dismantle it and use it for parts. In the last resort, it’ll be melted down and turned into something else.
The upshot: Things don’t die. They are reincarnated. And advocates say that the model will save consumers money, make manufacturers richer and conserve the environment.
Among the catalysts of the movement is Dame Ellen MacArthur, a 37-year-old, rather pixie-ish Brit. Dame MacArthur is a retired yachtswoman who in 2005 broke the world speed record for circumnavigating the globe solo — which might sound like a non sequitur until you hear her talk about her epiphany. “I suddenly realized there was a much greater challenge out there than sailing around the world,” she said in an interview, “which was trying to find a global economy that would function in the long term.” In 2010, MacArthur hung up her wetsuit for a business suit and started a foundation that has become the preeminent advocate of the circular economy, the Ellen MacArthur Foundation.
But circular business models require huge investments in rethinking and remaking every aspect of manufacturing.
Many other companies have signed on, in one way or another. Renault, the French automaker, has a “rejuvenating” plant devoted to repair of parts; warranty customers who buy remanufactured parts save about 30 percent, while the company reduces energy, waste and water by 70 to 80 percent.
To be sure, some purported exemplars of the circular economy sound too obvious to be shifting any paradigms. British retailer M&S’s “shwopping” campaign, for instance, aims to reduce landfill waste by encouraging customers to bring in old clothes for recycling or donation. Others examples seem more like marketing aimed squarely at ironic, self-hating hipsters. Consider, for instance, Patagonia’s various “Don’t Buy” campaigns, which urge consumers not do to things (like buy Patagonia clothing). The ads seemed to result in a significant uptick in sales. More interesting is Philips Lighting, which has been testing “pay-per-lux” lighting solutions, instead of selling lamps or lightbulbs. (A lux is one lumen per square meter.)
Sharpening the concept is one of the challenges circular economy proponents face. Another issue is convincing companies that they can make money from circular planning, design and sale. The Ellen MacArthur Foundation says the the transition to a circular economy could provide $1 trillion in annual savings by 2025 and create 100,000 new jobs within five years. But circular business models require huge investments in rethinking and remaking every aspect of manufacturing, from the drawing board to the distribution network. Every aspect must be designed for regeneration instead of quick demise.
Moreover, it’s not clear what will keep usage prices in check. In these tough times, it’s not that hard to imagine an evil washing machine monopoly raising the rents per wash, so that only the very wealthy — or, er, their servants — could afford to use the good ones.
The rest of us? Well, we admit we’re paranoid and cynical, but we still worry we’ll spend our best years at the laundromat.