As resources dwindle and waste piles up, it is clear our ‘take, make and waste’ linear economic model is in need of a rethink. This model, with its focus on never-ending economic growth, relies on a relentless use of Earth’s finite natural resources. It has led to environmental degradation and extreme wealth inequality.
According to the Global Footprint Network, we would need 1.7 Earths to support our current natural resource dependency and waste generation. This means that it now takes the Earth 1.7 years to regenerate what we use in just 1 year. If the current population and consumption trends continue, United Nations estimates predict that we will need the equivalent of the resources of 2 Earths to support us by the 2030s. Bottom line: the current economic system is unsustainable and is moving our society and the planet towards collapse. It is time for a new economic model, one that benefits all people while staying within the means of the planet.
Economist Kate Raworth has come up with a new framework to do just that and it looks like a doughnut - the kind with a hole in the middle. The hole in the middle represents where people are falling short on life’s essentials and humanity’s challenge is to get everyone out of that hole. At the same time, we must stay within Doughnut’s outer ring which represents Earth’s planetary boundaries. We are currently experiencing what happens when we overshoot this boundary. It leads to ozone depletion, water pollution, loss of biodiversity, climate change, and other such negative environmental impacts. The ‘dough’ of the doughnut represents an “ecologically safe and socially just space”; a sweet spot where humanity can thrive.
The purpose of economics should be to help us all enter that space and stay there. If we put the health and wellbeing of ourselves and the planet at the heart of our economic system, we can radically pivot towards a safer and brighter future for all.
Instead of growth at all costs, our new economic model needs to be restorative and regenerative by design. We need to shift from a linear economy to a circular economy.
A circular economy is based on three principles: design out waste and pollution, keep products and materials in use and enable our natural systems to regenerate. The circular model builds economic, environmental and social capital, and redefines “growth” as actions that provide cascading benefits to society.
To transition to a circular economy, we need to look at the whole system holistically and value our natural assets properly. We need to decouple economic activity from the consumption of finite resources, which means finding clever ways to reuse resources and keep them in circulation instead of turning them into waste. We can power this shift with renewable energy and we can create vast and emerging economic opportunities via new growth industries, business models and job creation. This will inevitably encourage innovation as we develop new materials, redesign systems and products, look at how we can creatively utilise ‘waste’ as a resource, and think up other clever ways to recycle what is already in use.
Another thing we need to consider is how we seek feedback from the environment to easily understand how we are using our resources. One way to do this is with environmental dashboards that can make our resource use visible in real time. Environmental dashboards can help us properly value, and reconnect us with, the natural systems that support us and our economic systems.
The good news is the circular economy movement is well underway. Holland, Finland, France, Slovenia, Italy and other countries have roadmaps for going circular. Japan is committed to making the 2020 Olympics the ‘circular economy games’ with medals produced from recycled electronic devices that were donated by the public. It’s time for other countries to follow their lead. Transitioning to a circular economy needs to become a priority for policy makers around the world. Businesses can help speed up the transition by cleaning up supply chains, going circular, and providing circular products and services. Many companies are already embracing the circular concept – from portable coolers made out of mushrooms, to skateboards made from ocean plastic.
As a consumer, you can support this shift to a circular economy by voting with your money by buying from the businesses that are adopting these practices. Another thing you can do is simply buy less and, when you do buy things, choose to spend your money on items that will have longevity. Yep, it’s time to say goodbye to fast fashion and cheap consumer goods!
We can all embrace the sharing economy, compost food waste, recycle materials, and avoid unnecessary waste like disposable coffee cups and plastic straws. You can also advocate for installing dashboards in your school, work or community! No matter how big or small the action, by taking steps to follow through on any of the 2040 solutions that light you up, you are contributing to creating a healthier planet where we all can thrive.