Last Sunday, I attended a “working dinner” on the circular economy. It was held at the Residence of the Holy See Representative to the UN, Chaired by the Vatican Minister of Foreign Affairs, and sponsored by ING. The residence of the Vatican in NYC is extra-ordinary. It was built and donated by the first 20thcentury mayor of the city: Hugh J Grant. It is the only NYC townhouse with a built-in chapel and a bullet proofed bedroom where 3 popes have slept.
I was intrigued by the interest of the Vatican in the circular economy. That’s because I had missed the reference in Pope Francis’ Laudato Si: “We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them. A serious consideration of this issue would be one way of counteracting the throwaway culture which affects the entire planet, but it must be said that only limited progress has been made in this regard.” [Emphasis added]
The circular economy proposes a growth model decoupled from natural resources. This means a shift from a linear model that “takes, makes and disposes” to a circular model that “reduces, reuses, and recycles”. The concept was born in environmental economists circles. It is connected to other, more familiar, concepts such as the sharing economy, the green economy and sustainable development. It is presented as a response to co-existing trends that contribute to environmental degradation: the increasing resources scarcity and commodity price volatility; and the growth of population and middle-class consumers.
Accenture estimates that the circular economy could generate 4.5 trillion by 2030. The first World Circular Economy Forum was held this year. And more and more businesses, mostly European so far, are embracing the concept. This means big changes to their strategies: Unilever commits to 100% recyclable packaging by 2025, Philipps moves from selling light bulbs to selling lighting as a service, Michelin leasesand retreads tires, etc.
A key question at the Vatican-hosted dinner was about the impact of the circular economy on the poor. This matters because so far the conversation has mostly happened in rich countries and focused on the environmental dimension of the circular economy. Not much has been written on its human dimension. My main message during the dinner was that circular economy advocates should not consider human wellbeing as an ex-post issue only. Rather human wellbeing should be a core element of the model where human capital wastes are considered alongside natural resource wastes. Under this broader message, here are some ideas I put on the table:
The circular economy
- Should seek to optimize all resources, including human resources. That would require pricing negative human externalities (eg inequalities) so that goods and services bear the full cost of their production and consumption;
- Could make certain goods and services more accessible to the poor (sharing is cheaper than owning);
- Could offer jobs opportunities to young “green” entrepreneurs provided they have the skills, finances, and technology.
- Would require life-long learning systems.
- Could help formalize informal economic activities, in particular when digital platforms are used to share goods and services.
In short, the circular economy concept is transforming big industries into service providers, being promoted by influential political and financial actors, but missing a fully-fledged human dimension that I, for one, would like to help shape.
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