CIRCULAR CHANGE CIRCULAR ECONOMY PROSPECTS DEVELOPMENT, POLICIES, ROLE OF THE BUSSINES SECTOR 11 th May 2018 JANEZ POTOČNIK Co-chair UNEP

Transcription

1 CIRCULAR CHANGE CIRCULAR ECONOMY PROSPECTS DEVELOPMENT, POLICIES, ROLE OF THE BUSSINES SECTOR 11 th May 2018 JANEZ POTOČNIK Co-chair UNEP International Resource Panel (IRP) Partner SYSTEMIQ

2 OUR WORLD AND OUR ECONOMY

3 Signed by over scientists from 184 Countries on 13.November 2017 Humanity has failed to make sufficient progress in generally solving these foreseen environmental challenges, and alarmingly, most of them are getting worse. Especially troubling is the current trajectory of potentially catastrophic climate change due to rising GHGs from burning fossil fuels, and agricultural production particularly from farming ruminants fro meat consumption. From 1992 humanity has: unleashed a mass extinction event, the sixth in roughly 540 million year, wherein many current life forms could be annihilated or at least committed to extinction by the end of this century.

4 EMPTY WORLD AND THE FULL WORLD Source: Club of Rome: Simplified after Herman Daly

5 Price Signals: Finacial Capital Overvalued Human Capital Undervalued Natural Capital not Valued Market Producers/Consumers Rational Behaviour Economic model Inbuilt Economic, Social, Environmental Inbalances

6 In the mid-term, except in specific cases, resource shortage will not be the core limiting factor of our (economic) development but the environmental and health consequences caused by this excessive and irresponsible use of resources will be!

7 DISCONNECT BETWEEN RESOURCE EFFICIENCY AND ECONOMIC EFFICIENCY There is a need to rebalance the cost of labour, and the costs of resources and pollution by pricing externalities, using taxation and other incentives for actors to favour paying for labour to save materials, rather than for materials to save labour

8 LIVING WELL WITHIN ECOLOGICAL LIMITS ECONOMIC SYSTEM FUNCTION OF ECOSYSTEM Withdrawals from the ecosystems Ecosystem services Policy ECOSYSTEMS SOCIO-TECHNICAL SYSTEMS providing social needs and value Energy system system Food system Industry Deposits Emissions Pollution Profits privatized Environmental externalities Values system Mobility system Technology system Science Market Costs socialized

9 MEASURES OF SOCIETAL DEVELOPMENT THAT INCLUDE NATURAL CAPITAL DEPLETION GROW MUCH SLOWER THAN GDP Progress per capita 3, globally, , real terms Gross Domestic Product Human Development Index Genuine Progress Indicator 1 Inclusive Wealth Index 2-0,1-0,2 0,8 Considerations C a p i t a l Economic Social 2,0 Natural , as later data not available globally, 2 IWI exists in two versions, one unadjusted, and one where adjustments are made for environmental damage, oil capital gains, and total factor productivity. The adjusted version is shown here, 3 Global population growth was 1.6 percent per year during the period SOURCE: UNEP (2014a), Kubiszewski et al. (2013)

10 It is not helping if you are walking faster, if you are walking in the wrong direction!

11 DPSIR FRAMEWORK

12 OUR COMMITMENT AND OUR OBLIGATION

13

14 Trade-offs among various SDGs are unavoidable. Sustainable Consumption and Production is the most efficient strategy to mitigate trade-offs and create synergies to resolve the development and environmental challenges articulated in the SDGs.

15 SDGs DIRECTLY DEPENDENT ON NATURAL RESOURCES

16 CIRCULAR ECONOMY PROSPECTS

17 Principles Preserve and enhance natural capital by controlling finite 1stocks and balancing renewable resource flows Renewables flow management Biological materials OUTLINE OF A CIRCULAR ECONOMY SYSTEM Regenerate Farming/ collection Renewable materials Renewables Substitute materials Parts manufacturer Finite materials Virtualise Restore Stock management Technical materials Optimise resource yields by circulating products, components and materials in use at the highest utility at all times in 2both technical and biological cycles Soil restauration Biogas Biosphere Biochemical feedstock Cascades Product manufacturer Service provider Share Recycle Refurbish/remanufacture Reuse/redistribute Extraction of biochemical feedstock Consumer Collection User Collection Maintain Foster system effectiveness by revealing and designing out 3 negative externalities Minimise systematic leakage and negative externalities Source: Ellen MacArthur Foundation; McKinsey Center for Business and EnvironmenStiftungsfonds für Umweltökonomie und Nachhaltigkeit;

18 FIRST CIRCULARITY GAP REPORT Circle Economy, January 2018 Our world economy is only 9.1% circular, leaving a massive Circularity Gap

19 CIRCULAR AND DIGITAL ARE ON THE SAME DEVELOPMENT CURVE

20 DIGITAL TRANSFORMATION In 1997, DeepBlue beat Gary Kasparov world Chess champion - using an algorithm conceived in the 1950s and lots of human data. In 2017, AlphaGo beat Ke Jie - world Go champion discovering by itself the principles of the game and how to play it (Era of Artificial Intelligence)

21 Regeneration ADAPTED BUTTERFLY DIAGRAM INTEGRATING HUMAN FLOWS BIOSPHERE Biosphere Biochemical Feedstock Farming, Collection EVOLUTION Life / Food HUMANSPHERE DEVELOPMENT Access / Experience TECHNOSPHERE Recycle Refurbish/remanufacture 1 SOCIAL ASPECTS OF CIRCULAR ECONOMY Biogas ADAPTATION Cascades Energy / Resource VALORISATION Energy / Service Share Reuse /redistribute Maintain/Prolong Extraction of Biochemical Feedstock The Golden Rule of priorities: Natural Capital! Human Capital! Remanufactured Capital Source: A. Lemille, adapted from the Butterfly Diagram of the Ellen MacArthur Foundation

22 2 CIRCULAR ECONOMY AND CLIMATE CHANGE

23 CLIMATE CARBON MANAGEMENT LAND WATER ENERGY MATERIALS DECOUPLING RESOURCES

24 Plastics 3 Food systems Land management BIOECONOMY AND CIRCULAR ECONOMY

25 URBAN 4 SYSTEMS AND CIRCULAR ECONOMY SHARING MODELS MOBILITY SYSTEMS WASTE RECYCLING SUSTAINABLE BUILDINGS ENERGY EFFICIENCY

26 THE WEIGHT OF THE CITIES - RESOURCE REQUIREMENTS OF FUTURE URBANISATION 2050 Preliminary results Urbanization is expected to be more or less completed in 50 years. We have a once-in-a-lifetime opportunity to shift the expected urbanization onto a more environmentally sustainable and socially just path.

27 RETAINING VALUE IN CIRCULAR ECONOMY 5

28 RETAINING VALUE IN THE SWEDISH MATERIALS SYSTEMS The Case of Plastics Offical statistics on plastic waste recycling 53% Value end of use plastic each year 10 bil SEK 80% incinerated energy value 0.4 bil SEK 16% new plastics 0.9 bil SEK 4% landfield 0.0 bil SEK All value retained 1.3 bil SEK Value retained/value end of use 13% Source: Material Economics

29 COMING SOON: Assessment of Resource Efficiency and Innovation in Circular Economy through Remanufacturing, Reuse, Repair, and Refurbishment

30 Focus on production processes that retain value within the circular system through: direct reuse, repair, refurbishment, and remanufacturing. Product Perspective Production Perspective Barriers Perspective Design Perspective Policy Perspective

31 OVERVIEW OF CASE STUDY SECTORS, PRODUCTS AND SAMPLE ECONOMIES ASSESSED Case Study Sectors Case Study Products Sample Economies Industrial Digital Printers Digital Production Printer Digital Printing Press #1 Digital Printing Press #2 Brazil Vehicle Parts Heavy-Duty and Off- Road (HDOR) Equipment Parts Vehicle Engine Vehicle Alternator Vehicle Starter HDOR Engine HDOR Alternator HDOR Turbocharger China Germany USA

32 BARRIERS TO CIRCULAR PROCESSES OCCURING THROUGHOUT THE SYSTEM

33 Assessment of Resource Efficiency and Innovation in Circular Economy through Remanufacturing, Reuse, Repair, and Refurbishment There is no evidence that economic status determines a country s ability to successfully engage in Value Retention Processes (VPRs) as a strategy for more sustainable production; rather, it is the presence and nature of systemic barriers that affect the speed at which VRPs can be integrated and adopted, and the resulting economic and environmental benefits realized.

34 LEADERSHIP GOVERNANCE

35 THEY WANT CHANGES BUT THEY DO NOT WANT TO CHANGE

36 System Initiative on Environment and Natural Resource Security World Economic Forum Annual Meeting 2018 Complexity and scale of these challenges requires a space that allows actors with responsibility for those environmental governance mechanisms to be able to consider and experiment with both new forms of collaboration and more systemic approaches... through promoting multi stakeholder cooperation, more agile governance (including sub-state actors, such as cities, states and provinces), the use of new technologies, and enhanced accountability and transparency.

37 System Initiative on Environment and Natural Resource Security World Economic Forum Annual Meeting 2018 The challenge seems to not be one of not inadequate scientific evidence anymore; rather it is one of cooperation and implementation. There is a deepening perception of a lack of synchronicity between economic and environmental policy responses to global risks.

38 GOVERNANCE REDEFINING SOVEREIGNTY

39 Existing 1992 RIO conventions (Climate change UNFCCC, Biodiversity CBD, Combating Deforestation UNCCD) There is a need for a new instrument, connecting existing conventions to resource management and to the system change of current economic model, enabling the removal of existing market and trade barriers Natural Resources Management Convention

40 Responsibilities of the Business Sector Aligned with the SDGs From being a pure product or service providers managing the risks of the company through profit maximisation To socially responsible companies managing also the risks of the society

41 TO CONCLUDE

42 Signed by over scientists from 184 Countries on 13.November 2017 We require the help of the world community of scientists -natural, social, economic, political; We require the help of the world s business and industrial leaders; We require the help of the world s religious leaders; and We require the help of the world s peoples. We call on all to join us in this task.

43 European Commission and EU member states have unique opportunity and responsibility to align all existing funding instruments and policies (CAP, FP9, Cohesion policy, Trade ) to support this transition. Agenda for Sustainable Development 2030 Next MMF likely for the period AND IF THIS WILL NOT BE DONE

44 The time is gone, the song is over, Thought I d something more to say (Pink Floyd)

45 THANK YOU For more information Contact IRP Secretariat at Visit our website at