The path to economic growth is circular

Wed Sep 02 12:51:53 UTC 2015

The world faces many major challenges including climate change, slow economic growth and a disproportionate reliance on mineral resources, but it is becoming increasingly accepted that adopting the circular economy model could provide answers for many of these global problems.
The Obama administration reported in June that the failure to act on climate change could cause an estimated 57 000 deaths a year in the United States from poor air quality by 2100.
According to the European Union the air quality in Witbank is among the world’s dirtiest – even when compared to the likes of Beijing, where people wear face masks to protect themselves from air pollution.
It is no coincidence that the Witbank region is also home to 11 coal-fired power stations. A 12th one is currently being built and when completed, this will be one of the world’s largest, burning 17-million tonnes of coal a year.
We are creating an environmental debt that our children, and grandchildren will need to pay. Just as you wouldn’t buy a car and expect your children, or grandchildren, to finance it, this debt isn’t fair. But the question remains, what can we do about it?
The Ellen MacArthur Foundation, the McKinsey Center for Business and Environment, and SUN (Stiftungsfonds für Umweltökonomie und Nachhaltigkeit), recently released an international study entitled Growth Within which was the foundation for the keynote address at the recent EU Commission’s Conference on the Circular Economy on 25 June in Brussels. The study showed that “Europe’s economy remains very resource-dependent…Proponents of a circular economy argue that it offers Europe a major opportunity to increase resource productivity, decrease resource dependence and waste and increase employment and growth.”
This situation is not dissimilar to the challenges facing the South African market, but what’s interesting is that the European market has something to learn from us. Positively, to reduce the pressure on our resources, SA has already implemented a circular economy within the tyre industry – which has become an internationally recognised case study as to how successful this approach can be. Indeed, as a result of the implementation of the ‘Waste into Worth’ concept for tyre waste, REDISA was invited onto the advisory board of organizations and individuals providing input on the Growth Within study. 
Let’s move from resource-dependency
For example, in cement kilns waste tyres can be substituted for up to 20% of current coal usage which in South Africa could mean replacing tens of thousands of tonnes of coal. This equates to reduced reliance on coal (less demand for mining coal), reduced net carbon emissions and reduced air pollution (as in the correct controlled environment, tyres burn cleaner than coal). Ultimately too cost savings for the cement companies that are passed to the consumer. PPC De Hoek, Natal Portland Cement, AfriSam and La Farge are already doing this and realising the benefits.
But what about increasing employment and growth?
In South Africa, the tyre industry has been a pilot project for circular economy development. Tyres are unusual since the collection points where waste arises are mostly known because tyres are mostly exchanged at dealerships, not at homes. This eases the “first mile” collection task.
The Integrated Industry Waste Tyre Management Plan was developed to fulfil a mandate of job creation and to bring order to South Africa’s recycling of tyres, a market that was only processing 10,000 tonnes of tyres each year of the 240,000 tonnes sold.
In two years, this project has resulted in more than 2 000 new jobs being developed, and over 190 SMME’s developed and supported – tangible proof that where some see waste, others see opportunity.
The way forward
True sustainability means balancing economic growth, infrastructure development and creating small business and job opportunities while lowering our emissions and overall impact on the environment.
The challenge is that generally, big business struggles to find a balance between reducing carbon emissions and protecting the environment, whilst driving a positive impact on the bottom line of the business.
Although interest in the circular economy approach is growing, it is happening at a slow pace. If it is to become more widespread, we must consider all industries to see how, through innovation and cooperation, we can double our efforts.
Notes to the editor:
REDISA is a firm supporter of the circular economy and was a key contributor and participant in this year’s Ellen MacArthur Foundation, the McKinsey Center for Business and Environment, and SUN ‘Growth within’ report compilation.
Although the report looked at the European economy there are learnings which South Africa should take note of:
According to the report the benefits of introducing a circular economy approach in Europe are:
·       An 11% GDP increase compared with 4% in the current development path by 2030.
·       An increase in average disposable income for EU households by €3,000, or 11% higher than the current development path.