Short series: Circular Economy in brief Part 2. Energy, Production and Usage
Author: Alonso Muñoz Solís
The aim of this 3-piece series of papers is to introduce the reader to the characteristics of a circular economic system. I will do so by comparing each of the phases of the linear system with those put forward by the proponents of a new circular economy, mainly the Ellen Macarthur Foundation. I will use their definition for the sake of clarity, and also because, even though there are many similar definitions of circular economy, the European Commission often refers to this body as a leading voice in the field, due to its rigorous work and detailed case studies regarding the topic (Kirchherr, Reike, & Hekkert, 2017; European Commission, 2015).
In the first paper, I explained the need of a new system and the virtues of a circular one. In this second paper, I will contrast the phases of the linear system with how the Foundation claims the circular system should work. I will start by explaining energy, production, and usage. At doing so, I will introduce basic principles of a circular system. In the next and final paper, I will analyze disposal, and finish the short series with closing remarks about the topic.
Let’s begin with the generation of the energy that powers the system.
How is energy being produced right now, in a linear system, and how should it be generated under a truly circular model?
Ever since the Industrial Revolution, our societies have been dependent on energy. Given England’s abundant and accessible coal deposits, coal quickly became the primary energy source to move the newly invented steam engine and the machines derived from it. For the 250 years, from the start of the Industrial Revolution until 2019, England produced most of its electricity from fossil fuels (Department for Business, Energy and Industrial Strategy, 2019), much like all the countries that started developing shortly after (Sachs, 2015). Right now, about 40% of the electricity produced worldwide is still generated using Coal (Ministerio de Ambiente y Energia MINAE, 2015).
Coal, however, like any fossil fuel, has two big problems. The first is that, by definition, it is a non-renewable material. Coal needs to be extracted from the ground and then burned, and for obvious reasons, this process can only happen once.
The residue, its second problem, is made up of an array of potentially toxic chemicals and CO2, the main driver of climate change (Munawer, 2018; Sachs, 2015). Something similar happens with the other fossil fuels that are now being used to generate energy: oil, gasoline, diesel, etc. They are all non-renewable hydrocarbons that release CO2 when burned. From a circular economy perspective, using energy sources that contradict its most basic cyclical principle is unviable.
Furthermore, given that energy encompasses more than just electricity, when analyzing it, it is necessary to incorporate the complete array of energy sources that a system uses to meet its requirements. An important percentage of the energy consumed by any country is a mix of electricity, which is often generated by coal, and the fuels that power its vehicles and industries.
In Costa Rica, for example, even when most of its electricity is produced using renewable sources (mainly hydropower), most of the country’s energy consumption is really fueled by fossil fuels (Ministerio de Ambiente y Energia MINAE, 2015). Because of this, the Sustainable Development Goals encourage the electrification of the system (Sachs 2015), which means converting all industrial machinery, vehicles, transportation vessels, etc. to run on electricity, while making the electric grid run on renewable, clean sources only.
Given that demand for electricity is likely to continue increasing in the years to come and we are trying to leave fossil fuels in the ground, the world has to respond a basic, yet very complicated question: What are the renewable and clean sources that are promoted by the SDGs and the circular economy? Wind power, hydro power and solar energy are the most common, but there are others that are gaining traction (Department for Business, Energy and Industrial Strategy, 2019).
Each energy source has its own complexities, characteristics, and advantages. By definition, these are all renewable in the sense that the main driver of the energy is not diminished by its use, even when this does not mean that they are harmless. For hydro, for example, big areas of land need to be flooded in the construction of the dam. This means the displacement of towns and wildlife, and the deforestation of the forest standing where the lake will be. For solar, very complex and hard to recycle solar panels are being used, what will happen to them when they have reached their usable limits? Development is a complex field and there are no easy one-size fits all solutions (Sachs, 2015).
Besides these popular energy sources, there are several clean sources (in the sense that they do not generate carbon dioxide) that are up for debate. In this paper, I will mention two of them. The first one is nuclear energy. A high-quality energy supply with minimal impact on the environment (when operation goes according to plan) but often associated with catastrophes.
For some, nuclear is the best way to move forward in a low-carbon economy because it is cheap, reliable, clean and very large-scale. Right now, nuclear reactors generate about 11% of Germany’s electricity, 20% in the United States (Environmental Protection Agency, 2019), and 70% in France, due to its long-standing policy based on energy security (Nuclear Power in France, 2022). According to the International Energy Agency (IEA), the Global nuclear power capacity needs to double by mid-century to reach net-zero emissions targets and help ensure energy security as governments try to reduce their reliance on fossil fuels (Reuters, 2022).
For its detractors, on the other hand, it is considered simply too dangerous to risk its inherent hazards. Among many others, the Fukushima Daiichi nuclear disaster, in 2011, was a recent catastrophe that received worldwide attention. If disasters occur in highly developed countries like Japan, no wonder the nuclear share of global electricity production has been declining since 1993 (Horvath & Rachlew, 2015).
The other debatable energy source is waste to energy, as it is often referred to (Seltenrich, Incineration Vs Recycling – A Debate Over Trash, 2013). Waste-to-energy plants thermally treat waste and generate electricity from it. The way these facilities operate, is using waste as the fuel that powers the turbine that moves the generator that produces the electricity. The convenience of solving the waste problem by generating valuable electricity from it, many European countries are adopting this process (European Commission, 2017; Seltenrich, Emerging Waste-to-Energy Technologies – Solid Waste Solution or Dead End?, 2016).
A problem that arises from these plants, however, is that how environmentally friendly they are varies a lot depending on the technologies used. From very basic and polluting “burning”, to sophisticated and clean processes that produce more electricity while emitting less pollution per tonne of waste incinerated.
I will further explain and discuss this process in the “End of life” section. For the scope of this paper, however, the importance of this energy source lies in the philosophical dilemma of what we, as a society, decide to do with our waste. This question urges us to rethink the whole concept of “waste”. Which leads us into the second phase of the linear model: production and usage.
Production and Usage
For a circular system, waste is a design flaw (Tonelli & Cristoni, 2018; World Economic Forum, 2014; Ellen MacArthur Foundation, 2013). This means that instead of figuring out what to do with “waste”, a circular system begins by designing products that won’t generate any. It is perhaps not surprising to realize that in order to achieve a truly circular system, no waste can exist.
In nature, for example, everything is part of a circular system. A fruit in the ground becomes food for fungi and bacteria who decompose it into soil. At the same time, this soil will become food for another tree. If the fruit gets eaten by an animal, its energy is used by the animal’s muscles, and the animal faeces will eventually be nutrients in the ground for something else. Even the seeds, when they are expelled by the animal that ate it, will become a tree in the future. In this sense, circular economy mimics nature, as Janine Benyus advocated in her book. This is another principle of a circular economy, there is no such thing as waste (Lacy & Rutqvist, 2015; Tonelli & Cristoni, 2018; Ellen MacArthur Foundation, 2013).
This is where the linear and the circular systems differ the most. Circularity does not start at the disposal phase, as it’s often misunderstood given current recycling schemes, but at the designing of the product. In the present system, only a very small fraction of the original product value is recovered after use (Ellen MacArthur Foundation, 2013). In a circular economy, products are designed and optimized for a cycle of disassembly and reuse. These tight component and product cycles define the circular economy and set it apart from disposal and recycling, where large amounts of invested energy and labor are simply lost (Lacy & Rutqvist, 2015), as explained in the previous article.
In order for the principle of no waste to occur, one required aspect is for product components to have a certain purity and quality in the materials they are made of. Currently, given that products are not designed for circularity, many post-consumption material streams become available as mixtures of materials.
Think of the way a Tetra Pack package, the beverage container, mixes cardboard, plastic and aluminium (Tetra Pack, 2019). This mixture makes it hard to separate materials after use, reducing the value of each of the materials. After a product contained in a Tetra Pack has been consumed, the cardboard cannot be composted, the aluminum cannot be recycled, and the plastic cannot be reused on its own without undergoing costly processes to separate them. On the other hand, if you think of a glass bottle or an aluminum can after use, both materials can be easily recycled into any new glass or aluminum products indefinitely; a bottle and a can, yes, but also a jar and a window frame as well.
In order for all product waste to be directed back to where it can be taken advantage of, a whole new logistics scheme must be implemented. This process is often referred to in terms of “reverse cycles” – the process of taking what is left after a product has been consumed back to the company that produced it for reuse (Tonelli & Cristoni, 2018; World Economic Forum, 2014). In order to return each glass bottle, each phone or any product back to where it can be used, a reverse cycle must be implemented.
Different products need different strategies to make this happen. Several countries, Denmark being the one with the most advanced system, use deposit systems for beverage containers (Dansk Retur System, 2019), for example. In a similar manner, overall collection of products can be encouraged with lease or buy-back models that benefit the manufacturing companies as well as its customers (World Economic Forum, 2014). This reverse logistics must be implemented beyond nondurable goods like drinks and cellphones and extended to items like washing machines and large-scale industrial machinery.
In a true circular economy, consumption happens only in the biological cycles; elsewhere “use” replaces “consumption”. This means that an apple, that belongs to the biological cycle, will be eaten (consumed), but a hair-dryer will only be used and not consumed in the way we understand it now, when this happens, it will never become “trash”. That’s why a circular economy incentivizes that ownership remains with the manufacturing company, and products be rented instead of sold (World Economic Forum, 2014).
For this to happen, circular economy largely replaces the concept of a consumer with that of a user, just as already happens with long distance travel and commuting where users don’t own the plane or the train they travel in, they just rent the “service” of transportation while airlines maintain ownership of their planes. More and more, different industries are implementing this scheme because of its many benefits for all involved.
In France, for example, the governmental car fleet rents the tires it uses instead of buying them (Lacy & Rutqvist, 2015; Ellen MacArthur Foundation, 2013). The lighting of the Schiphol airport in the Netherlands is leased by Phillips Lighting, who is responsible for guaranteeing its functionality (Lacy & Rutqvist, 2015). In both cases, and many others, the traditional consumption (the purchasing of tires or lightbulbs) is replaced by that of users who pay for a service.
This ownership change incentivizes manufacturers to develop new ways to extend the life of their products, while they benefit from keeping control of them, allowing them to analyze them and better understand how the users are using them. Users, at the same time, benefit from the availability of the usage of the products without having to buy them upfront. In order for this new model to become a reality throughout the system, new businesses and new technologies have to be developed.
Replacing consumption by usage, and implementing reverse logistics combined with ubiquitous technology, greatly improves the overall system at least in two ways. First, the company that owns the product being used is encouraged to design and improve its quality; instead of lightbulbs that need to be replaced every 10,000 hours, companies are now encouraged to develop lightbulbs that last for as long as possible. Instead of generating revenue by selling low quality products often, the company now earns its income by developing and renting long-life products, partially decoupling economic gains from resource consumption. Instead of disposable materials that are mined and frequently discarded, this scheme promotes long-lasting products, diminishing the need of new raw materials and landfill space.
Imagine all the trash that would be avoided by making sure that all products go back to their manufacturer at the end of their live. The other benefit is that the company will be able to collect and reprocess the products after they are no longer working, which will allow them to really understand how their customers are using their products and where they are failing, and then, to reuse, refurbish, remanufacture and recycle them correctly.
When appropriately implemented, a circular system saves us the need to answer the life-long question that so many economies struggle to respond: What shall we do with our products after they have been used? This question leads us into the conversation of end of life, to be addressed in the next article.
To read Part 1 visit https://www.ideasforpeace.org/content/circulareconomypart1/
To read Part 3 visit https://www.ideasforpeace.org/content/circulareconomypart3/
List of References
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Dansk Retur System. (2019). Dansk Retur System. Retrieved from https://www.danskretursystem.dk/en/
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Horvath, A., & Rachlew, E. (2015). Nuclear power in the 21st century: Challenges and possibilities. Springer Netherlands.
Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An analysis of 114 definitions. Resources, Conservation and Recycling, Volume 127: 221-232
Lacy, P., & Rutqvist, J. (2015). Waste to Wealth – The Circular Economy Advantage. UK: Palgrave Macmillan.
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Munawer, M. E. (2018). Human health and environmental impacts of coal combustionand post-combustion wastes. Journal of Sustainable Mining.
Nuclear Power in France. (2022, March). World Nuclear Association. Retrieved June 30, 2022, from https://world-nuclear.org/information-library/country-profiles/countries-a-f/france.aspx
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Seltenrich, N. (2013). Incineration Vs Recycling – A Debate Over Trash. Yale-Environment- 360.
Seltenrich, N. (2016). Emerging Waste-to-Energy Technologies – Solid Waste Solution or Dead End? Environmental Health Perspectives.
Tetra Pack. (2019, July 20). Tetra Pak. Retrieved from Packaging material for Tetra Pak carton packages: https://www.tetrapak.com/packaging/materials
Tonelli, M., & Cristoni, N. (2018). Strategic Management and the Circular Economy. United Kingdom: Routledge.
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Author’s Short Bio
Professor Alonso Muñoz (Costa Rica) is Instructor in the Department of Environment and Development at the University for Peace (UPEACE), where he coordinates the Master of Arts (M.A.) degree in Responsible Management and Sustainable Economic Development (RMSED) and the Master of Arts (M.A.) degree in Development Studies and Diplomacy (DSD). He holds a B.Sc. in Electrical Engineering from the University of Costa Rica and an M.Sc. in Business Administration. He has worked in the private sector, and has volunteered on various national and international projects regarding peace education, migration, environmental impact of systems and Social Enterprises. His most recent work revolves around the transition towards a more Circular Economy, a field that he feels passionate about, and for which he has high expectations. You can contact Professor Muñoz at email@example.com