TODAY S LINEAR TAKE-MAKE-DISPOSE ECONOMY IS CHANGING. New products = New raw materials

Transcription

1 CE100 USA

2 TODAY S LINEAR TAKE-MAKE-DISPOSE ECONOMY IS CHANGING Our linear take, make, dispose economy is changing. The growing world population (9bn by 2050) and new middle class consumers (+3bn by 2030) put significant pressure on economic growth that is dependent on finite resources. This is especially challenging when all new products are made of new raw materials and the structural waste in the economic system is chronically high. New products = New raw materials Material, Asset, Product waste is chronically high

3 THE CIRCULAR ECONOMY KEY PRINCIPLES PRINCIPLE 1 Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows Renewables flow management RENEWABLES FINITE MATERIALS Regenerate Substitute materials Virtualise Restore Stock management PRINCIPLE 2 Optimise resource yields by circulating products, components and materials in use at the highest utility at all times in both technical and biological cycles Regeneration Biogas Biosphere Farming/collection 1 Biochemical feedstock Cascades Parts manufacturer Product manufacturer Service provider Consumer User Collection Collection Share Maintain/prolong Recycle Refurbish/ remanufacture Reuse/redistribute PRINCIPLE 3 Foster system effectiveness by revealing and designing out negative externalities Extraction of biochemical feedstock 2 MINIMISE SYSTEMIC LEAKAGE AND NEGATIVE EXTERNALITIES SOURCE: Growth Within (2015) - Ellen MacArthur Foundation; Stiftungsfonds für Umweltökonomie und Nachhaltigkeit (SUN); McKinsey Center for Business and Environment; Drawing from Braungart & McDonough Cradle to Cradle (C2C)

4 THE CIRCULAR ECONOMY RESTORATIVE AND REGENERATIVE BY DESIGN Restorative by design keeping products, components and materials at their highest utility and value, at all times eliminating waste, with materials re-entering the economy at end of use as defined, valuable technical or biological nutrients

5 THE ECONOMIC CASE IS COMPELLING Global analyses reveals a circular economy enables significant material cost savings opportunities while at the same time setting up for growth and innovation. " Sector Medium-lived complex goods (EU-27) Fast-moving consumer goods (global) ROUGH ESTIMATES Net material cost savings 1 USD billions per year Motor vehicles Machinery and equipment Electrical machinery Other transport Furniture Others Packaged food Apparel Beverages Fresh Food Others 1 Advanced scenario SOURCE: Ellen MacArthur Foundation Towards a Circular Economy Vol. 1&2; Eurostat Input/Output tables 2007 for EU-27 economies; Euromonitor 2011

6 WHAT BUSINESSES CAN DO The ReSOLVE framework helps business explore circular opportunities REgenerate Share Optimise Loop Shift to renewable energy and materials Reclaim, retain, and restore health of ecosystems Return recovered biological resources to the biosphere Share assets Reuse/secondhand Prolong life through maintenance, durability, upgradability Increase performance/efficiency of product Remove waste in production and supply chain Leverage big data, automation, remote sensing and steering Remanufacture products or components Recycle materials Anaerobic digestion Extract biochemicals from organic waste Virtualise Deliver utility virtually Exchange Replace old with advanced non-renewable materials Apply new technologies Choose new product/service SOURCE: Ellen MacArthur Foundation, SUN, McKinsey Center for Business and Environment - Growth Within: a circular economy vision for Europe

7 WHAT POLICYMAKERS CAN DO No silver bullet, it requires a sector-by-sector approach, using a wide range of instruments Sector-specific instruments Information & awareness Public procurement & infrastructure Collaboration platforms Regulatory frameworks Business support systems Fiscal frameworks Economy-wide instruments Clear direction Realigned incentives Education and knowledge building SOURCE: Delivering the circular economy a toolkit for policymakers : Ellen MacArthur Foundation; McKinsey Center for Business and Environment; NERA Economic Consulting

8 WITH U.S. BUSINESS, GOVERNMENT AND EDUCATION

9

10 EMPOWERING ORGANISATIONS IN THE UNITED STATES Accelerating the transition towards a circular economy requires a multi-stakeholder approach The CE100 USA is a United States centric, pre-competitive collaboration and innovation program, bringing together key stakeholders: Business with a strong focus on the U.S. market keen to learn and develop CE opportunities. U.S. Gov. & Cities who wish to create an effective environment for the growth of the circular economy. U.S. Universities providing insight and capacity through relevant CE teaching and/ or research programs. Emerging Innovators (EI) such as Start-ups and SME s with a unique technology, service or solution that disrupt status quo and accelerate the transition. CE100 international members of the international CE100 program keen to develop opportunities and engage with U.S. like minded organizations.

11 CE100 USA Empowering organizations to reach their circular economy goals faster Over the course of 3 years, the program delivers value on every step of the journey, enabling organizations to capture cost savings, innovative and build new circular economy opportunities: INSIGHTS & ANALYSIS The latest circular economy analyses, intelligence, tools and templates COLLABORATION Tailored activities to stimulate cross-company, cross-sector, pre-competitive collaboration CAPACITY BUILDING Develop understanding of the circular economy as an innovation framework and build organizational capacity NETWORK Network of circular economy experts, businesses and public bodies, across sectors / industries

12 CE100 USA Inspired by the international CE100, the CE100 USA is developed with tailored program elements that fit ambitious organizations operating in the U.S." Benefits & Program Elements INSIGHT & ANALYSIS CAPACITY BUILDING NETWORK Excellent opportunities to connect with like minded US organizations, suppliers, and customers through Events, Member Directory and Member Book. COLLABO- RATION Research and case studies developed by the Foundations and local members addressing new opportunities and insights to overcoming barriers to implementation. Tools and templates for building CE capacity in organizations needed to accelerate implementation of new projects. Action-oriented programs and projects such as 1-day Acceleration Workshop each six months to convene all the U.S members to focus on cross-sector, cross-industry collaboration initiatives CE100 USA Members Online library US centric research Local case studies 10 E-learning places Educational video s, templates, and tools CE100 U.S. directory CE100 U.S. member book 2x 1-day Workshop Collaborative Projects

13 Ellen MacArthur Foundation in the USA Upcoming: Date: CE100 USA Launch Event Circular economy in the US and key pillars of the program 31 March 2016 San Francisco CA USCCF 2016 Sustainability Forum Keynote by Andrew Morlet (CEO) and workshops by the Foundation team 16, 17 May 2016 Washington DC CE100 USA 1 st Acceleration Workshop for program members September 2016 NYC If your organisation is interested in participating in the programme, please contact: CE100USA@EllenMacArthurFoundation.org

14 FEEDBACK FROM CE100 MEMBERS Even if you do not believe in a sustainability agenda, the efficiency gains of managing (circular) material flows should convince you to go after this potential. NATIONAL GRID We re proud to be a founding partner of the Ellen MacArthur Foundation, because we believe that the circular economy offers a solid concept on which we can base our thinking for our potential future business model. KINGFISHER While not every product is appropriate for refurbishment, it seems highly likely that nearly all companies will have parts of their product portfolio where circular business practices will prove profitable. CISCO Nothing is impossible, particularly if it is inevitable. HERMAN MULDER CHAIRMAN OF THE GLOBAL REPORTING INITIATIVE

15 CE100 USA

16 THE ELLEN MACARTHUR FOUNDATION The Ellen MacArthur Foundation works across four areas, with the aim of accelerating the transition towards a circular economy: INSIGHT & ANALYSIS EDUCATION & TRAINING BUSINESS & POLICY COMMUNICA- TIONS & PUBLISHING Providing robust evidence about the benefits of the circular economy transition Inspiring learners to re-think the future through the circular economy framework Catalysing circular activities across the global economy Developing the conceptual framework and celebrating best practice THE CIRCULAR ECONOMY A WEALTH OF FLOWS KEN WEBSTER

17 Not profitable for businesses 1 even if other barriers are overcome Capital intensive and/or uncertain payback times Technology not yet fully available at scale Externalities (true costs) not fully refletcted in market prices Insufficient public goods / infrastructure 2 provided by the market or the state Insufficient competition / markets leading to lower quantity and higher prices than is socially desirable Imperfect information that negatively affects market decisions, such as asymmetric information Split incentives (agency problem) when two parties to a transaction have different goals Transaction costs such as the costs of finding and bargaining with customers or suppliers Inadequately defined legal frameworks that govern areas such as the use of new technologies Poorly defined targets and objectives which provide either insufficient or skewed direction to industry Implementation and enforcement failures leading to the effects of regulations being diluted or altered Unintended consequences of existing regulations that hamper circular practices Capabilities and skills lacking either in-house or in the market at reasonable cost Custom and habit: ingrained patterns of behaviour by consumers and businesses Use of biological elements in architecture (e.g. living roofs that purify water) Return of organic construction material to biosphere Sharing of floor space reducing demand for new buildings Shared residential floor space (e.g. Airbnb, Couchsurfing, Hoffice) Shared office space (e.g. Liquidspace) and increase of desk sharing policies Increased use of under-utilised buildings Multi-purposing of offices and public buildings for better utilisation Re-purposing of building interiors to increase lifetime of existing buildings Coordination of all stakeholders along value chain to reduce structural waste Energy use optimisation through low-energy houses and smart homes Increased reuse and high-value recycling of building components and materials, enabled by Designing buildings for disassembly New business models (e.g. other owner of materials than property owner) Building passports/signatures and reverse logistics ecosystems Increased teleworking to reduce need for office floor space Modular production off-site for rapid assembly on-site 3D printing of building components Net value created in sector EUR million Figure 22: Prioritisation of opportunities Stimulate the development of advanced, high-value bio-refining technologies by funding cross-institutional R&D clusters Reduce VAT on high value chemicals derived from waste feedstock Require municipalities to send organic waste for one round of processing to extract high value compounds before it could be incinerated / used as fertiliser Require municipalities to collect organic waste separately A B Net value created in deep-dive sub-sector EUR million Scale up factor to full sector % Form public private partnerships to finance the deployment of mature biorefining technologies Propose a minimum proportion of 2nd generation biofuels in the EU biofuel target Adoption rate % Number of units in deep-dive sub-sector Net value created per unit in deepdive subsector EUR per unit Size of sector vs. deep-dive sub-sector Provide low-cost loans or loan guarantees for the deployment of mature biorefining technologies Provide a business advice service Incorporate bio-refining into the government s long-term strategic plans HIGH COST LOW % Scalability factor (between 0 and 1) Circular scenario adoption rate, % Business as usual scenario adoption rate, % Additional revenues and cost savings per activity EUR per unit Additional costs per activity EUR per unit Sector size Deep-dive sub-sector size Additional sales Price / value increase Material / labour savings Labour Services Materials / components Energy Capital Identify and communicate necessary changes to EU policy (or its national implementation) to address unintended consequence POLICYMAKERS HAVE AN IMPORTANT ROLE TO PLAY IN ENABLING THE TRANSITION The Toolkit for policymakers has been developed to support national and regional governments who wish to embark on an a circular economy transition The toolkit is a three-step, end-to-end methodology to set ambition and focus, assess specific opportunities, and analyse economy-wide implications a set of 11 tools to identify and quantify circular economy opportunities, identify barriers, map and prioritise policy options It also entails a comprehensive case study on Denmark Full report and more information here: government/toolkit-for-policymakers ECONOMICS MARKET FAILURES REGULATORY FAILURES SOCIAL FACTORS XCHANGE CIRCULARITY POTENTIAL LOW IMPACT HIGH Basic metals and fabricated products Electronic products Water supply, sewerage Rubber and plastic products Agriculture, forestry and fishing Mining and quarrying Construction Food and beverages Machinery Hospitals Electricity, gas Packaging (not sized) Pharmaceuticals ROLE IN NATIONAL ECONOMY toolkit@ellenmacarthurfoundation.org