Building a circular economy — based on reuse and refurbishment of products, components, and materials..

Long back Mahatma Gandhi said “the world has enough for everyone’s need but not for everyone’s greed”.

Frans van Houten CEO of Royal Philips has this interesting piece revisiting the Gandhi dictum (does not mention it though). He says world economy is going to be majorly urbanised and middle classed by 2030. This will put huge constraint on the available resources given our current economic system of use and throw:

In the sixteenth century, the astronomer Nicolaus Copernicus made a profound discovery: the sun, not the earth, was at the center of the known universe. At the time, many denounced Copernicus’s insight as heresy against established Christian doctrine; eventually, of course, the Copernican Revolution paved the way toward a new, scientific worldview and enhanced human prosperity.

Today, the world needs a similar paradigm shift. But this time it is the prevailing economic model that must be transformed.

By 2030, the global middle class will total nearly five billion people, all of whom will expect the same kinds of opportunities and comforts that wealthy populations have long enjoyed. This will put increasing strain on the environment and deplete the world’s stock of resources.

The problem is that the world has long maintained a myopic focus on producing and consuming goods as cheaply as possible. The result is a linear economy based on the rapid use, disposal, and replacement of goods. Sustaining the current model would require unlimited, easily accessible resources and infinite space for waste – something that clearly is not possible. Indeed, the consequences of our disposable economy – skyrocketing CO2 emissions, unmanageable waste streams, and the increasing difficulty of extracting resources, to name a few – are already apparent.

Time to revisit the model:

To find a sustainable alternative, one need only look to nature, where nothing is wasted. Forests, for example, are completely efficient systems, with species’ lifecycles occurring in perfect harmony with the seasons. This underpins levels of resilience and longevity that economic systems should strive to emulate.

Just as ecosystems reuse everything in an efficient and purposeful cycle, a “circular” economic system would ensure that products were designed to be part of a value network, within which the reuse and refurbishment of products, components, and materials would ensure the continual re-exploitation of resources.

Of course, building a circular economy would require a fundamental restructuring of global value chains. Instead of selling products, businesses would retain ownership, selling the use of the goods they make as a service. Selling a product’s benefits instead of the product itself would create a powerful incentive for producers to design for longevity, repeated reuse, and eventual recycling, which would enable them to optimize their use of resources.

This requires a new generation of materials, as well as innovative development and production processes. It also demands new business models, a redefined concept of legal ownership and use, new public-tendering rules, and novel financing strategies. Finally, a circular economy calls for adaptive logistics and a leadership culture that embraces the new system and rewards progress toward establishing it.

He points how his company is shifting its strategy towards using materials what can be recycled and so on..The author says this will be another Copernican revolution. Not really. It is going back to basics.

Like all major transitions in human history, the shift from a linear to a circular economy will be a tumultuous one. It will feature pioneers and naysayers, victories and setbacks. But, if businesses, governments, and consumers each do their part, the Circular Revolution will put the global economy on a path of sustainable long-term growth – and, 500 years from now, people will look back at it as a revolution of Copernican proportions.

We did have this culture in India of reuse and refurbishment. As a result there was plenty of help to mend and repair things. This has changed in the last few years as culture of use and throw has picked up significantly…



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