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Pitch

Linear (waste-making) economics is the global norm. If we're serious about change in any sector, we must change the economics.


Description

Summary

Sustainability of material use in the fabrics sector, and in all other sectors, is a single big step away. The obstacle to this is not technical; we know we can stop all kinds of waste dumping to air, land and water. The obstacle is not political; politicians so far only hear about narrow solutions that never match the scale of our resource related problems. We have a blindspot, that makes only small steps seem feasible when addressing huge issues.

The big step that has been overlooked for many decades is to change the economics to switch the entire economy from linear to circular flows of resources. This 'circular economy' would enable resources of all kinds, from fabrics to fuels to buildings, to remain as resources and not to be lost as wastes in ecosystems. 

The circular economics to implement circular economy is simple. We just need to correct the economic error of resource externalities (from producers causing but not paying for climate and waste impacts). This cannot be done in the ways it has been tried in the past (eg taxes) but it could be done with a new method based on new thinking. 


  • New thinking 1: focus on accumulating waste in ecosystems, not just waste for disposal. This is called 'ecosystem waste' and includes excess atmospheric carbon, landfilled rubbish, soil contamination and marine waste.  
  • New thinking 2: stop ecosystem waste by actions focussed on the stages before product disposal. This is called 'precycling' and includes new understanding, collaborations, product designs, business models, infrastructure and ecological services.
  • Method 1: support precycling of fabrics and all products (including fuels) by a producer responsibility incentive according to the risk of the product ending up as ecosystem waste. This is called 'waste-risk'.
  • Method 2: Producers would pay an insurance-like premium for high waste-risk products, which would be spent to support the precycling of all products throughout society. This is called 'precycling premiums'.


What actions do you propose?

  1. Reimagine the future. Revitalise the sustainability debate by simply acknowledging how previous debate has for so many decades totally fail to advance solutions at the necessary scale. Acknowledging this blindspot, and not just shifting responsibility onto technical or political failures, is a prerequisite for the necessary creative and systemic solutions becoming visible and making sense. 
  2. Redesign the future. Congratulations! You've now escaped the herd thinking that blocks most people from imagining and implementing change at the necessary scale. Convene a 'scouting group' of diverse people to explore how 'changing the game' from linear to circular economics could be feasible and achievable. 
  3. Weave the future. Rally the fabric/textiles sector to discuss and advance circular economics. What ecosystem wastes are involved? How can all fabrics be precycled? What is the waste-risk of products in this sector? What level of premiums would create a 'level circular playing field'? How could premiums best be spent to enable all fabric-based products to be precycled in future? 
  4. Sell it! Work with the public, colleagues and policymakers to rapidly implement circular economics as a competitive survival strategy in companies, the materials sector, economic regions and internationally. Circular economics could fix the dangerous resource externalities of capitalism by providing economic incentives to eliminate waste (including pricing carbon). Then ordinary market decisions throughout society would drive the long-awaited materials sustainability transformation. 

 

These actions would dramatically accelerate the momentum of progress with resource sustainability in the fabrics industry beyond what has been achieved in the past. The actions would build resource sustainability into all decision-making, making everyone part of a materials revolution whether or not they think about a sustainable future. Without these actions, further sustainability progress is possible but the worlds ecological, waste and climate problems would continue to undermine the future for all of us.  



Who will take these actions?

Circular economics is not based on a tax nor a pollution market so the roles of actors differ from conventional proposals for waste management, sustainability and carbon pricing.

Government will legislate to enact the scheme and also provide accountable oversight. Government agencies will provide web-based guidance and a form for calculating the waste-risk of products based on information about the products and the available natural or technical capacities for returning the product as new resources. Unlike taxes, governments do not handle the funds. Unlike carbon markets, it is the real-world market being corrected, so there is no need to invent new markets for tradable pollution permits. 

Producers (including importers) will be responsible for knowing and publishing on public record the waste-risk of their products (many for the first time ever). For significant waste-risks producers will be responsible for paying a premium to an accredited insurer. Premiums will be higher for higher waste-risks, for higher volumes of production and for materials causing acute problems such as climate change and toxic pollution. 

Accredited insurance organizations will receive premiums from producers and spend them, in partnership with suitable civil society groups, to cut the waste risk of products by supporting the actions needed to close resource cycles. Premiums from fossil fuel producers (for example) will be spent in support of actions to cut the waste-risk of fossil fuels, by energy efficiency and renewable energy supply. 

Individuals and interested organizations will provide crowdsourced monitoring of producers' waste-risk calculations, in support of government agencies able to investigate and remedy as needed.  


 


Where will these actions be taken?

Circular economics is ideally implemented by international agreement, since this should eliminate market distortions where it is not yet in place . However it can also be useful at other scales:

  • At national or regional scale (eg USA, China or European Union), it can be used to gain competitive advantage over economies that continue to waste resources. There would be an innovative stimulus for businesses and a financial stimulus from spending of premiums, causing higher economic growth.
  • At city, industry or business scale it can be used as an innovative stimulus by engaging people in measuring waste-risk and proposing ways to precycle products and resource flows. The language of precycling stimulates creative ideas far more than the stale reduce/reuse/recycle mantra. 


What are other key benefits?

The mechanism for collaboration, for engaging the entire society in a materials revolution, is the market. There would be no need for everyone to understand or care about the wide range of problems related to linear use of resources. The profit motive and market prices would be enough to guide sustainable decisions throughout the economy. Acceptance of sustainability as the new norm would guide lifestyle and career choices. The traditional tension between the competing demands of profit and planet would be largely eliminated. 

Economic benefits include massive savings in business material costs, estimated by World Economic Forum (WEF) as over $1 trillion globally by 2025. In addition 200,000 new jobs and prevention of 100 million tonnes of waste are anticipated (Ref 5).  Further benefits include greater societal resilience due to continued availability of critical raw materials and more stable food supplies due to recycling of nutrients and protection of soil ecosystems. 


What are the proposal’s costs?

  1. Time and effort by producers finding out about the waste-risk of their products and considering ways to reduce the risk and to create savings and new business. This cost may also be seen as a benefit.
  2. Administrative cost of operating a market-based scheme for circular economics. This cost is minimised by web-based data management and by producer responsibility for data (similar to savings from on-line financial accounting). 
  3. Costs of free-riders, such as producers claiming falsely low waste-risk or insurers underpricing waste-risk. This is minimised by accreditation of insurers and an agreed calculation method. Unreliable information from producers would attract fines and possibly also higher future waste-risk assessments.    
  4. Transition costs. Old infrastructure and equipment will need to be replaced or upgraded for compatibility with circular material flows (including carbon flows). In a business as usual scenario some of this cost would be incurred anyway and costs of ecological/climate impacts would exceed transition costs. 

 



Time line

Short term: Circular economics will be led by the fabrics and textiles industry (or another sector) and will be implemented in the short term in order to launch solutions that match the scale of our resource-related problems (including climate change).  

Medium term: Most producers will have chosen to adopt circular (sustainable) business models. Those which did not would be the dinosaurs of tomorrow's circular capitalism. 


Related proposals

Almost all of them. This proposal creates the paradigm shift needed to remove obstacles and provide support for millions of sustainability initiatives. 


References

Global review of policy options for 'governments going circular' by WBCSD, Accenture and E&Y, highlighting precycling premiums as a best practice case study

Academic article in Journal of Cleaner Production: An economic instrument for zero waste, economic growth and sustainability. Publisher’s link, full paper

Further references