How a Circular Economy Can Build Resilient Communities

Circular Economy is the term for a more sustainable economic system. It is a term for environmentally sustainable and socially responsible practices and contrasts the current ‘take, make, waste’ system where resources are used and disposed of.

A Circular Economy is based on three principles*:

1. Designing out waste and pollution
2. Keeping products and materials in use
3. Regenerating natural systems

It is a complete rethink of the system and requires some significant changes to the way that our economy works. Many of these changes would benefit us as well as the environment, building resilient communities that will be less vulnerable in times of crisis.

*Ellen MacArthur Foundation

Localised

Doing things locally means that there are fewer resources required to transport products but also means that you are less likely to be cut off from services and supplies. In a global economy, Aotearoa is at the mercy of numerous markets such as products and supplies coming in and waste and recycling going out. Similarly, each of our properties could be considered the same way: for example if we can produce our own food, we don’t have to travel to buy it, be dependent on other people growing it, we have control over the conditions that it is grown (i.e. avoid pesticides) and would grow what is in season with little or no carbon footprint.

Covid-19 example: Limited access to shops during the Covid-19 Rahui/Lockdown meant that Kiwis saw the opportunity to plant veggies and resort to baking from scratch, evident by the rush on associated products before the lockdown kicked in. An example of severed global markets is the inability for numerous Councils to send recycling offshore due to financial barriers and restrictions on transport. The circular solution to this would not be to build more onshore recycling facilities, but to build a system that creates less waste.

Connecting and sharing knowledge and resources

A circular system builds on the idea that things are localised but connected to one another. Thanks to technology we have the ability to share information and files – providing an opportunity to distribute things quickly and with little carbon footprint, but also allowing contribution to communal knowledge - we can build on each other’s work and create information that is beneficial and accessible to everyone. (Learn more about the ‘Collaborative Commons’ here).

Covid 19 examples: researchers around the world have collaborated on the study of the Covid-19 virus. This has provided a quicker response than if everyone worked independently and has input from numerous researchers with varying backgrounds. Digital files have been shared around the globe so that anyone with a 3D printer can make protective visors for front line workers. The file transported is instant, accessible (free) and almost entirely carbon free.

Renewable 

A circular economy is built on renewable resources rather than limited ones. For example, wind and solar in place of oil and coal. These renewable resources are more accessible in times of crises because they are available anywhere, they just require the infrastructure.

Covid-19 example: As the price of oil rises and global transport and travel is restricted, industries reliant on fossil fuels will be hit more than those using renewables. For example, many New Zealand power providers use renewable energy, so the cost of power is less likely to go up compared to our Australian neighbours. People that have solar and/or electric vehicles will fare better as well because they have access to what they need from their home.

Repairable 

In a circular economy, resources stay in the system rather than being disposed of. A key element to this is being able to repair things when they break. This involves more than just the skills and the knowledge around how to repair but also requires products be designed in a way that they are repairable. Many companies design their products to break and must be thrown out and replaced. In a time of crisis, that is not a great system as you are dependent on having the funds to replace things and having access to replacement products.

Covid-19 example – in Aotearoa’s Level 4 Rahui, we have had limited access to replacement products as well as homeware’s for repairing things. This restriction on consumption has imposed limitations on our ability to be independent and function for a long period cut off from resources.

Resilient Businesses

Businesses that have embedded social and environmentally responsible practices are more resilient in downturns. This is due to numerous factors but generally because they have built a more resilient business model through:

1. Paying decent wages and engaging staff, leading to higher staff retention and productivity.
2. Manufacturing locally allows companies to be reactive and reduce stock levels as demand changes. This means less capital is invested in stock and more is spent on operations. This allows companies to be adaptive.
3. Considering environmental impacts means businesses look at much longer time frames than those that are financial focused. This allows companies to be forward thinking and take advantage of long-term opportunities.

The fact that socially and environmentally responsible businesses are more resilient than others is also reflected in investment data. This follows on from the above points around responsible businesses using more resilient business models but people that have ethical investments are less likely to withdraw their funds if returns drop than those that are purely financial focused. This is because there are more considerations than just the financial value.

You may have noticed a running theme through these examples is that a circular system provides resilience through independence. Independence from a linear model of consumption that has trapped us and forces us to measure success as purely financial. There is enough evidence to show that what is good for the environment is also good for people AND good for business. We need to see the opportunities to make positive changes now because the global pandemic that is gripping the world is likely the first of many crises that we will face. Underneath this we are still facing a climate crisis and tackling that will require resilient communities.

 Information in this post was originally from the So Circular Podcast episode 6: