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A new relationship with our goods and materials would save resources and energy and create local jobs, explains Walter R. Stahel.
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CONSERVATION Czech national
park under threat from
development pressures p.448
ECONOMICS How China has
driven businesses to reuse
each other’s waste p.440
PSYCHOLOGY Game our
emotions about ownership to
reduce consumption p.438
Circular economy
A new relationship with our goods and materials
would save resources and energy and create local jobs,
explains Walter R. Stahel.
W
hen my battered 1969 Toyota
car approached the age of 30,
Idecided that her body deserved
to be remanufactured. After 2 months and
100hours of work, she returned home in
her original beauty. “I am so glad you finally
bought a new car,” my neighbour remarked.
Quality is still associated with newness not
with caring; long-term use as undesirable,
not resourceful.
Cycles, such as of water and nutrients,
abound in nature — discards become
resources for others. Yet humans continue to
‘make, use, dispose. One-third of plastic waste
globally is not collected or managed1.
There is an alternative. A ‘circular
economy’ would turn goods that are at the
end of their service life into resources for
others, closing loops in industrial ecosystems
and minimizing waste (see ‘Closing loops’).
It would change economic logic because it
replaces production with sufficiency: reuse
what you can, recycle what cannot be reused,
repair what is broken, remanufacture what
cannot be repaired. A study of seven Euro-
pean nations found that a shift to a circular
economy would reduce each nations green-
house-gas emissions by up to 70% and grow
its workforce by about 4%—the ultimate low-
carbon economy (see go.nature.com/biecsc).
The concept grew out of the idea of substi-
tuting manpower for energy, first described
40 years ago in a report2 to the European
Commission by me and Geneviève Reday-
Mulvey while we were at the Battelle Research
Centre in Geneva, Switzerland. The early
1970s saw rising energy prices and high
unemployment. As an architect, I knew that
it took more labour and fewer resources to
refurbish buildings than to erect new ones.
The principle is true for any stock or capi-
tal, from mobile phones to arable land and
cultural heritage.
Circular-economy business models fall
in two groups: those that foster reuse and
extend service life through repair, remanu-
facture, upgrades and retrofits; and those
that turn old goods into as-new resources by
recycling the materials. People — of all ages
and skills —are central to the model. Own-
ership gives way to stewardship; consumers
become users and creators3. The remanu-
facturing and repair of old goods, build-
ings and infrastructure creates skilled jobs
in local workshops. The experiences of
Workers at Umicore in Brussels separate out precious metals from electronic waste.
ECO-DESIGN Three case
studies of circular
manufacturing p.443
24 MARCH 2016 | VOL 531 | NATURE | 435
COMMENT
UMICORE
© 2016 Macmillan Publishers Limited. All rights reserved
workers from the past are instrumental.
Yet a lack of familiarity and fear of the
unknown mean that the circular-economy
idea has been slow to gain traction. As a holis-
tic concept, it collides with the silo structures
of academia, companies and administra-
tions. For economists who work with gross
domestic product (GDP), creating wealth by
making things last is the opposite of what they
learned in school. GDP measures a financial
flow over a period of time; circular economy
preserves physical stocks. But concerns over
resource security, ethics and safety as well as
greenhouse-gas reductions are shifting our
approach to seeing materials as assets to be
preserved, rather than continually consumed.
In the past decade, South Korea, China
and the United States have started research
programmes to foster circular economies by
boosting remanufacturing and reuse. Europe
is taking baby steps. The Swedish Founda-
tion for Strategic Environmental Research
(Mistra) and the EU Horizon 2020 pro-
gramme published their first call for circular-
economy proposals in 2014. The European
Commission submitted a Circular Economy
Package to the European Parliament last
December. Since 2010, the Ellen MacArthur
Foundation, founded by the round-the-world
yachtswoman, has been boosting awareness
of the idea in manufacturers and policymak-
ers. And circular-economy concepts have
been successfully applied on small scales
since the 1990s in eco-industrial parks such
as the Kalundborg Symbiosis in Denmark,
and in companies that include Xerox (sell-
ing modular goods as services), Caterpillar
(remanufacturing used diesel engines) and
USM Modular Furniture. Selling services
rather than goods is familiar in hotels and in
public transport; it needs to become main-
stream in the consumer realm.
Few researchers are taking note. Excellence
in metallurgical and chemical sciences is a
precondition for a circular economy to suc-
ceed. Yet there is too little research on find-
ing ways to disassemble material blends at
the atomic level. The body of a modern car
incorporates more than a dozen steel and
aluminium alloys, each of which needs to be
retrieved.
Circular-economy knowledge is concen-
trated in big industries and dispersed across
small–medium enterprises (SMEs). It must
be brought into academic and vocational
training. A broad ‘bottom up’ movement will
emerge only if SMEs can hire graduates who
have the economic and technical know-how
to change business models. Governments
and regulators should adapt policy levers,
including taxation, to promote a circular
economy in industry. And scientists should
scan the horizon for innovations that could
be patented and licensed to pave the way for
greater leaps in splitting up molecules to
recycle atoms.
SYSTEMS THINKING
There are three kinds of industrial economy:
linear, circular and performance.
A linear economy flows like a river, turn-
ing natural resources into base materials and
products for sale through a series of value-
adding steps. At the point of sale, owner-
ship and liability for risks and waste pass
to the buyer (who is now owner and user).
The owner decides whether old tyres will
be reused or recycled —as sandals, ropes or
bumpers — or dumped. The linear economy
is driven by ‘bigger-better-faster-safer’ syn-
drome — in other words, fashion, emotion
and progress. It is efficient at overcoming
scarcity, but profligate at using resources in
often-saturated markets. Companies make
money by selling high volumes of cheap and
sexy goods.
A circular economy is like a lake. The
reprocessing of goods and materials gener-
ates jobs and saves energy while reducing
resource consumption and waste. Cleaning
a glass bottle and using it again is faster and
cheaper than recycling the glass or making
a new bottle from minerals. Vehicle owners
can decide whether to have their used tyres
repaired or regrooved or whether to buy new
or retreaded replacements — if such services
exist. Rather than being dumped, used tyres
are collected by waste managers and sold to
the highest bidder.
A performance economy goes a step
further by selling goods (or molecules) as
services through rent, lease and share busi-
ness models4,5. The manufacturer retains
ownership of the product and its embodied
resources and thus carries the responsibility
for the costs of risks and waste. In addition to
design and reuse, the performance economy
focuses on solutions instead of products, and
makes its profits from sufficiency, such as
waste prevention.
For example, Michelin has since 2007 sold
tyre use ‘by the mile’ to operators of vehicle
fleets. The company has developed mobile
workshops to repair and regroove tyres at
clients’ premises and aims to develop prod-
ucts with longer service lives. Worn tyres are
sent to Michelins regional plants for retread-
ing and reuse. The Swiss company Elite uses
the same strategy for hotel mattresses, and
textile-leasing companies offer uniforms,
hotel and hospital textiles and industrial
wipes as a service.
Conventional waste management is
driven by minimizing the costs of collection
and disposal — landfill versus recycling
or incineration. In a circular economy, the
objective is to maximize value at each point
in a product’s life. New jobs will be created
and systems are needed at each step.
Commercial markets and collection points
are needed for users and manufacturers to
take back, bring back or buy back discarded
garments, bottles, furniture, computer equip-
ment and building components. Goods that
can be reused may be cleaned and re-mar-
keted; recyclables are dismantled and the
INNOVATION
CLOSING LOOPS
Using resources for the longest time possible could cut some nations’ emissions by
up to 70%, increase their workforces by 4% and greatly lessen waste.
Ownership
transfers from
manufacturer to
consumer at
point of sale.
Is controlled by
buyer-owner-consumers
of goods, or by eet
managers who retain
ownership and sell
goods as services.
USE
EXTRACTED RESOURCES
Water, energy and natural resources
enter the manufacturing process.
DISTRIBUTION
T
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E
Research is needed to
transform used goods
into ‘as-new’ and to
recycle atoms.
Resource losses
partly recoverable
by industrial
symbioses.
MANUFACTURING
Renewing used
products lessens
the need to make
originals from
scratch.
THE CIRCULAR ECONOMY
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COMMENT
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parts are classified according to their residual
value. Worn parts are sold for remanufactur-
ing, broken ones for recycling. These markets
used to be common — milk and beer bottles
and old iron were once collected regularly
from homes. Some have re-emerged as digi-
tal global market places, such as eBay.
Professional marketplaces (perhaps
online) also need to be set up for the
exchange of used parts, such as electric
motors, bearings and microchips. Even
components of liquid waste, such as lubri-
cation and cooking oils or phosphorus from
sewage, can be refined and resold. Scientists
should re-market rather than dump their
used kit.
Stewardship rules are needed for used
goods. Austria is a world leader in this area.
Collecting and reusing ‘waste’ are labour
intensive and expensive, but they have been
fostered in the nation through taxation
changes and by recouping costs through
re-marketing rather than scrapping parts.
The ultimate goal is to recycle atoms.
This is already done for some metals. The
Brussels-based company Umicore extracts
gold and copper from electronic waste. The
Swiss firm Batrec removes zinc and ferro-
manganese from batteries. These processes
are energy-intensive and recover the metals
only partly. To close the recovery loop we
will need new technologies to de-polymer-
ize, de-alloy, de-laminate, de-vulcanize and
de-coat materials.
Methods and equipment are needed
to deconstruct infrastructure and high-
rise buildings. For example, the ANA
InterContinental hotel in Tokyo was
demolished in 2014 beneath a ‘turban’ that
was lowered hydraulically floor by floor to
minimize noise and dust emissions. A verti-
cal shaft with a goods lift in the middle of
the building allowed the deconstructors to
recover components and sort materials while
using the lift as a generator.
Services liberate users from the burden of
ownership and maintenance and give them
flexibility. Exam-
ples include:‘power
by the hour’ for jet
and gas turbines;
bike and car rentals;
laundromats and
machine-hire shops.
Fleet managers ben-
efit from resource
security—the goods
of today become the
resources of tomorrow at yesterday’s prices.
Covering the costs of risk and waste within
the price of use or hire provides economic
incentives to prevent loss and waste over the
lifetimes of systems and products.
SOCIETAL TREND
The circular economy is part of a trend
towards intelligent decentralization—wit-
ness 3D printing, mass customization of
manufacturing, ‘labs-on-a-chip’ in chemis-
try and functional services. The French car-
sharing service Autolib offers people flexible,
hassle-free urban mobility by using small
electric cars that have low maintenance costs
and can be recharged in reserved parking
spaces throughout Paris. Such business
models jeopardize the fundamentals of the
linear economy — ownership, fashion and
emotion — and raise fears in competing
companies. For example, car manufactur-
ers’ strengths of mass production, patented
technologies in combustion engines and
gearboxes, big investments in robotic facto-
ries and global supply and marketing chains
are of little use when competing with local
Autolib services.
Public procurement can exploit the
potential of the performance economy. Yet
despite some successes, governments remain
hesitant. NASA decided a decade ago to buy
space transport services, leading to start-up
companies such as SpaceX competing for
contracts using innovative, cheap and reus-
able equipment. Assigning maintenance costs
to the private constructor of the Millau Via-
duct in the south of France led the tenderer,
Eiffage Construction, to develop a structure
that could be erected quickly and would have
minimal maintenance and liability costs over
its 75-year service life.
TIPPING POINTS
Realizing a circular economy will take
concerted action on several fronts.
Research and innovation are needed at
all levels — social, technological and com-
mercial. Economists and environmental
and materials scientists need to assess the
ecological impacts and costs and benefits of
products. Designing products for reuse needs
to become the norm, making use of modu-
lar systems and standardized components,
for instance6. More research is needed to
convince businesses and governments that a
circular economy is feasible.
Communication and information
strategies are needed to raise the awareness
of manufacturers and the public about their
responsibility for products throughout their
service lives. For instance, it should be fash-
ion magazines, not science journals, that bang
the drum about jewellery sharing, leased jeans
and rental designer handbags.
Policymakers should use ‘resource-miser’
indicators such as value-per-weight and
labour-input-per-weight ratios rather than
GDP. Policies should focus on performance,
not hardware; internalization of external
costs, such as emissions and pollution, should
be rewarded; stewardship should overrule
ownership and its right to destroy. The Inter-
net of Things (in which everyday objects are
digitally connected) and Industry 4.0 (intel-
ligent technical systems for mass produc-
tion) will boost such a shift, but also demand
a policy review that considers questions of
ownership and liability of data and goods7,8.
Policies
9
should promote activities that are
desired by society and punish those that are
not. Taxes should be raised on the consump-
tion of non-renewable resources, not on
“W
e will
need new
technologies to
de-polymerize,
de-alloy,
de-laminate,
de-vulcanize
and de-coat
materials
.”
Autolib car-sharing schemes free users from the demands of ownership.
24 MARCH 2016 | VOL 531 | NATURE | 437
COMMENT
GONZALO FUENTES/REUTERS
© 2016 Macmillan Publishers Limited. All rights reserved
H
umans are unique in the animal
kingdom in their capacity for
materialism. We make, use and trade
objects for their symbolic value as much as
their functionality. One of the earliest exam-
ples of such artefacts— a piece of carved ochre
found in the Blombos Cave in South Africa
— dates from at least 70,000years ago. Pos-
sessions are extensions of our selves. Beyond
making tools, we adorn ourselves and bury
our dead with objects.
Objects have social significance. Through
them we signal our identity and status to
others. Marketing experts know that belong-
ings convey aspirations that owners wish to
display to others. Designer goods have cachet
because of their expense or exclusivity. To all
but the most ascetic among us, it is important
to some degree what others think about our
choice of gadgets, car, décor or clothing.
These mores of ownership inform the value
that we assign fakes or those who own them.
When it comes to second-hand goods, most
of us care about who previously handled them
and what they were used for — we would
rather wear the clothing of a beloved celebrity
than a murderer. We reverently hand down
great-grandmas costume jewellery to the next
generation, but toss last season’s bling from
Make recycled
goods covetable
To reduce consumption and waste we must overcome
our squeamishness about repurposing pre-owned
possessions, says Bruce Hood.
Stalls known as mtumbas (‘second-hand’ in Swahili) in Nairobi sell repurposed goods, many from the West.
renewable resources including human
labour. Value-added tax (VAT) should
be levied on value-added activities, such
as mining, construction and manufactur-
ing, but not on value-preserving stock
management activities such as reuse,
repair and remanufacture. Carbon credits
should be given to emissions prevention
at the same rate as to reduction.
Societal wealth and well-being should
be measured in stock instead of flow, in
capital instead of sales. Growth then
corresponds to a rise in the quality and
quantity of all stocks — natural, cultural,
human and manufactured. For exam-
ple, sustainable forestry management
augments natural capital, deforestation
destroys it; recovering phosphorus or
metals from waste streams maintains
natural capital, but dumping it increases
pollution; retrofitting buildings reduces
energy consumption and increases the
quality of built stock10.
Marrying the three types of economy
is a formidable challenge. A shift in
policy focus from protecting the envi-
ronment to promoting business models
that are based on full ownership and
liability, and that are unlimited in time,
rather than imposing a two-year war-
ranty for manufacturing quality, could
transform a nation’s competitiveness.
Walter R. Stahel is founder and director
of the Product-Life Institute in Geneva,
Switzerland. He is also a member of the
Club of Rome and a visiting professor at
the Faculty of Engineering and Physical
Sciences, University of Surrey, UK.
e-mail: wrstahel2014@gmail.com
1. Ellen MacArthur Foundation, World Economic
Forum and McKinsey & Company. The New
Plastics Economy: Rethinking the Future of
Plastics (Ellen MacArthur Foundation, 2016).
2. Stahel, W. R. & Reday-Mulvey, G. Jobs for
Tomorrow: The Potential for Substituting
Manpower for Energy ((Vantage Press, 1981).
3. Stahel, W. R. in The Circular Economy — A
Wealth of Flows (ed. Webster, K.) 86–103
(Ellen MacArthur Foundation, 2015).
4. Stahel, W. R. The Performance Economy
(Palgrave, 2006).
5. Stahel, W. R. in Handbook of Performability
Engineering (ed. Misra, K. B.) Ch. 10, 127–138
(Springer, 2008).
6. Stahel, W. R. in Our Fragile World: Challenges
and Opportunities for Sustainable Development
Vol. II (ed. Tolba, M. K.) Ch. 30, 1553–1568
(UNESCO/EOLSS, 2001).
7. Giarini, O. & Stahel, W. R. The Limits to
Certainty, Facing Risks in the New Service
Economy (Kluwer, 1989).
8. Stahel, W. R. in The Industrial Green Game:
Implications for Environmental Design and
Management (ed. Richards, D. J.) Ch. 4,
91–100 (National Academy Press, 1997).
9. Stahel, W. R. Phil. Trans. R. Soc. A 371,
20110567 (2013).
10. Stahel, W. R. & Clift, R. in Taking Stock
of Industrial Ecology (eds Clift, R. &
Druckman,A.) Ch. 7, 137–158 (Springer,
2016).
THE CIRCULAR ECONOMY
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COMMENT
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... The negative effects of the currently dominant production models based on taking, making, and disposing of resources threaten natural ecosystems and affect human health and wellbeing (1,2). Nowadays, governments and non-governmental organizations (NGOs) stimulate companies to look for new way of producing while meeting environmental goals. ...
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The present economy is not sustainable with regard to its per capita material consumption. A dematerialization of the economy of industrialized countries can be achieved by a change in course, from an industrial economy built on throughput to a circular economy built on stock optimization, decoupling wealth and welfare from resource consumption while creating more work. The business models of a circular economy have been known since the mid-1970s and are now applied in a number of industrial sectors. This paper argues that a simple and convincing lever could accelerate the shift to a circular economy, and that this lever is the shift to a tax system based on the principles of sustainability: not taxing renewable resources including human labour-work-but taxing non-renewable resources instead is a powerful lever. Taxing materials and energies will promote low-carbon and low-resource solutions and a move towards a 'circular' regional economy as opposed to the 'linear' global economy requiring fuel-based transport for goods throughput. In addition to substantial improvements in material and energy efficiency, regional job creation and national greenhouse gas emission reductions, such a change will foster all activities based on 'caring', such as maintaining cultural heritage and natural wealth, health services, knowledge and know-how.
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Sumario: Introduction -- Analysis: Two case studies and their national context -- Syntesis: Feasibility of the substitution of labor for energy -- Appendix I: The European Community and its institutions -- Appendix II: What is the French "Plan"? -- Bibliography
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Sumario: The new battleground for risk-taking: the service economy -- Facing social uncertainty: towards a new social policy in the service economy -- Producing the wealth of nations; the risk takers and the supply-side of the economy. The dynamics of disequilibrium -- At the roots of uncertainty
Book
The overarching contribution of this book is a review and assessment of the current and future impacts of globalization on the world’s forests. The work has been developed by the "Resources for the Future" Task Force for the International Union of Forest Research Organizations (IUFRO). Four key themes are addressed: the effect of globalization on forests (including future trade flows); plantations as the primary source of forest products and its consequences, including plant breeding and forest health; the effect of new products such as bio-products and markets on forests; and the emergence of forest ecosystem services and their impact on the landscape and human communities. These four themes are examined in detail to map out the impacts of these trends for forests throughout the world and at multiple scales, and how forest research needs to be adapted to address these trends. Overall, the volume provides a major synthesis of current thinking and knowledge on the topic for advanced students, as well as policy-makers and professionals in the forest sector.
Book
Preface Ilya Prigogine. Foreword Alexander King. List of Figures. 1. Introduction. 2. The New Battleground for Risk-Taking: the Service Economy. 3. Facing Social Uncertainty: Towards a New Social Policy in the Service Economy. 4. Producing the Wealth of Nations the Risk Takers and the Supply Side of the Economy. The Dynamics of Disequilibrium. 5. At the Roots of Uncertainty. Bibliography. Index.
World Economic Forum and McKinsey & Company. The New Plastics Economy: Rethinking the Future of Plastics
  • Ellen Macarthur Foundation
Ellen MacArthur Foundation, World Economic Forum and McKinsey & Company. The New Plastics Economy: Rethinking the Future of Plastics (Ellen MacArthur Foundation, 2016).
in The Circular Economy-A Wealth of Flows
  • W R Stahel
Stahel, W. R. in The Circular Economy-A Wealth of Flows (ed. Webster, K.) 86-103 (Ellen MacArthur Foundation, 2015).
in The Industrial Green Game: Implications for Environmental Design and Management
  • W R Stahel
Stahel, W. R. in The Industrial Green Game: Implications for Environmental Design and Management (ed. Richards, D. J.) Ch. 4, 91-100 (National Academy Press, 1997).