The Best Economy in the World
Adventures in Sustainable Living
Episode 46
The Best Economy in the World
An important part of sustainability is recycling. There are many reasons that things get recycled. For example, in 1776 during the American War for Independence, US patriots took down a statue of King George III, melted it down and used it to make over 42 K bullets. And during the Great Depression, many people recycled things out of necessity.
And while recycling is important, it actually should not be your first choice. In fact, the waste that we create and how we manage it actually has a significant impact on our economy. So, if you want a simple, sustainable, and not so boring lesson in economics, then listen to this episode on The Best Economy in the World
Welcome back everyone to the Adventures in Sustainable Living podcast. This is your host Patrick and this is E46 which is called The Best Economy in the World
Now I know that if I mention economics some of you will roll your eyes and turn me off. But hold on for a second and allow me to explain. I am not talking about the economics that you may have studied in college and were probably bored to tears. What I am referring to in this episode is how our economy actually relates to our waste management and obviously to our sustainability.
So just please bear with me for a moment. In the simplest and most concise terms, economics is a social science that deals with the production, distribution, and consumption of goods and services. So essentially, it is the study of how a society utilizes its resources. Now from that definition, it does not take a stretch of the imagination to see that economics is directly related to sustainability.
From a sustainability perspective, there are three types of economies: linear, recycling, and circular.
Linear Economy
For most of human history we have operated on the basis of take-make-dispose. What this means is raw materials are collected and then used to produce a product. When that product is used up, no longer functions, is broken, etc. it is then disposed of as waste and you go purchase a new product.
Now in this type of economy value is created by producing and selling as many products as possible. Thus the natural environment is simply a resource to be used to our advantage. This linear economy obviously results in business practices that assume there is an unlimited supply of natural resources. Which of course as we now know, our planet does not have unlimited resources. In fact, this take-make-dispose approach to goods and services is coming under increased pressure simply because of the environmental and economic disadvantages.
Ecological Disadvantage of a Linear Economy
The underlying disadvantage of this type of economy is that the production of goods and services is at the expense of the environment. Every step of this take-make-dispose systems has detrimental affects.
Harvesting raw materials is costly in many ways. It requires huge amounts of energy and water, it destroys natural resources, and of course emits toxic substances. The same is true with the production phase. And finally during disposal, products go the landfill.
Economic Disadvantages of a Linear Economy
There are also several economic disadvantages to a linear economy. And truthfully, the linear economy is a basic economic nightmare.
One of the big problems with a linear economy is that it produces enormous interdependence. For example, it is quite obvious that we now live in a global economy. If one country has very little water but they have an excess of oil, then they will use that oil to trade for other commodities. The challenge is that the production process for most goods requires a lot of fuel and water. Consequently, the scarcity of one single raw material now has widespread effect on many other goods and services.
The additional thing that factors in here is something we all know too well. The lifespan of our products has shorten considerably. But, we are the ones producing the positive feedback for the companies. We want the latest products as fast as we can get them. Consequently, we dispose of our older products faster. What this means is that product lifespan now does not have to be very long because of market demand. This in turn promotes the production of even more products that don’t last very long. And because of the overall poorer quality, we want new products even faster.
And the cycle goes on.
Additionally, the global middle class continues to grow. So does expendable income. Now there are more people that want even more products so there is an even greater demand for raw materials that are quickly dwindling.
Now obviously the linear economy, which the world has operated on for eons, is not sustainable. It becomes a downward spiral. We now have environmental degradation due to the depletion of natural resources. We are disposing of waste at a rate that exceeds the decomposition rate of what we are disposing of in the first place. We are also depleting our renewable resources faster than what those resources can renew themselves. Consequently, the environment can no longer stand the negative impacts of human activity and the resulting degradation is becoming a threatening issue.
Consequently, here comes the recycling economy.
Recycling Economy
Now early on in this episode, I mentioned that products are recycled for many reasons. And actually, the history of recycling is really kind of interesting.
1887 New York established the first crude recycling plant.
1904 The first aluminum recycling plant was opened
1970 The Earth Day movement sparked a lot of change. Twenty million people took part in Earth Day marches. US Senator Gaylord Nelson raised national awareness about increasing waste and the need to recycle. April 22nd is still globally recognized as Earth Day.
Now there are tremendous benefits to recycling. So much so, that the UK has set an aggressive goal of 65% recycling on the national level by the year 2035. But, to hit some of the highlights here.
Conservation of natural resources
Obviously, we have a finite amount of natural resources, some of which are in short supply. Recycling paper and wood saves trees and forest. Recycling metal reduces new mining operations. Obviously recycling plastic means less new plastic is produced.
Reducing the demand for raw materials
I have already talked about how our on-going demand for raw materials is degrading the environments.
Reducing carbon emissions
It takes a lot less energy and water to recycle something than it does to use new materials.
Recycling is cheaper than waste collection and disposal.
It is 6 times less expensive to collect and reuse recyclables than it is to dispose of waste materials.
So, what recycling does is of course conserve natural resources and reduces pollution. This means that wastes is systematically collected, processed and re-used on a national level.
Disadvantages to a Recycling Economy
Of course a recycling economy is a huge step above the linear economy. However, there are still some disadvantages of this type of economy.
Lack of compliance
The first, and most obvious disadvantage that I see is lack of compliance. Unless recycling is made easy, or unless there are strict standards that are enforced, there will be very low compliance.
I am consistently surprised of the total lack of recycling programs in Colorado since this state is touted as being such a progressive, outdoor, healthy culture. Yet recycling programs in my mountain community were completely discontinued. Consequently, it makes recycling very difficult for tens of thousands of mountain residents. Or people have to go considerably out of their way to make it happen.
Energy consumption
Also, the reality of recycling is that all those millions of tons of recyclable waste have to be picked up, transported, sorted, cleaned and processed at various locations. This of course requires time, energy, and water consumption in order to make it a reality.
Increased pollution
It is entirely possible that toxins from the original material can still be reprocessed and passed right along into the new product. There have been some examples of radiation poisoning due to using recycled steel.
In many cases, recycling anything requires the use of harsh chemicals. For example, just to recycle paper, bleach has to be used. We all know that this is a rather harsh chemical.
Low quality jobs
Recycling is labor intensive and requires a lot of manpower. But, the kind of work that is involved offers low pay, produces poor morale and often a low quality of life for the workers involved.
Ineffective
And because of all of these factors, many people simply consider recycling to be much more ineffective than what most people want to believe. Additionally, the amount of material that needs to be recycled often far exceeds our present abilities. For example, the average American drinks 2.5 sodas per day. That amounts to 778 million aluminum cans that need to be recycled. And the present rate of aluminum recycling cannot keep up with the demand. Consequently, aluminum mining is still necessary.
Linear economy
So, just for a quick summary, so far in this episode we have looked at two different types of economies, that being the linear and the recycling economy.
It should be obvious that the take-make-dispose system that has been used throughout most of human history is just not the way to go. Contrary to what most people may still believe, we do not have unlimited resources. Not any more. But a step above that is the recycling economy. But this also has clear advantages and disadvantages.
Circular Economy
As I have stated before, recycling is a great idea. However, it should not be your first choice. Your first choice should be to simply not produce the trash in the first place. Now we move on to what is called the Circular Economy, which is by far the most sustainable.
So, what exactly is a circular economy and what are the benefits?
Now remember at this beginning of this episode I discussed the definition of economics. In the simplest and most concise terms, economics is a social science that deals with the production, distribution, and consumption of goods and services. So essentially, it is the study of how society utilizes its resources.
A circular economy is simply a model for production and consumption of goods and services that involves sharing and leasing, repairing, refurbishing, reusing and recycling existing materials and products for as long as possible. If this is accomplished, the lifecycle of our products is greatly extended.
Now in contrast, if you remember in the linear economy, value is added by simply producing as many products as possible. But in the circular economy the products that we purchase and use everyday, are manufactured in such a way that they are easily repaired and reused. In our present economy, the products we use everyday are easier and far less expensive to replace than they are to repair.
But the very nature of the circular economy implies reducing waste to a minimum. Once a product reaches the end of its lifecycle, the materials in that product are still kept in the economy whenever possible. This means reusing those materials for something else again and again which of course creates further value.
Furthermore, what this eliminates is our present model of
take-make-comsume-throw away which relies on inexpensive and easily accessible materials and energy. This also eliminates our present model of planned obsolescence. What this means is that a product has been designed to have a limited lifespan simply to encourage consumers to purchase it again.
And as you likely could have guessed, there are many benefits to this economic model. Waste prevention is an obvious benefit. Consumers being provided with more durable products, which in the end, saves them money. But we also will greatly reduce our carbon emissions because 45% of our present CO2 emissions is due to the production of materials that we use everyday. Another obvious benefit is reduced pressure on the environment. And another not so obvious benefit for consumers is that manufacturers will be driven toward producing more innovative products out of necessity.
How is this going to happen?
Well, at this time, you may be wondering about just how all of this is actually going to happen. Well, of course, big business, big government, big global economy means big changes. But it is possible and I will give you some examples.
Shift from a waste mentality to a circular mentality.
Presently our mentality is toward managing our waste instead of minimizing it. Just look at what you do everyday in your household. How many times do you drop something in the trash without giving it a thought.
What we need to do is create further value by producing products that actually last longer. Once they are disposed of then maximum effort must be placed into recovery as much of that material as possible.
Change our Climate Plans
As I mentioned before, 45% of our greenhouse gas emissions is from extracting raw materials that are used in our everyday products. Once again, designing products that last and retain their value can reduce our needs for new raw materials by as much as 80 to 90%.Consequently, we can vastly reduce our green house gas emissions.
Tax Incentives
This is an easy thing for governments to accomplish. They just have to offer tax incentives to manufacturers that reuse recycled materials in the production of their products.
Examples
And if you think such things are not coming into play in our economy, allow me to give you some examples of real things that are happening.
Netherlands
The Dutch government has made moves to ensure the Dutch economy is completely circular by the year 2050.
Royal Philips
Royal Philips is an international healthcare company that is now starting to focus on remanufacturing and refurbishing programs for medical imaging equipment.
Sweden
Sweden has now introduced tax incentives that promote the repair and reuse of products. They have reduced their VAT tax at the point of sale, which is their version of sales tax. They are now offering tax rebates to citizens on repairs.
The value of this is that the appliance repair technician now contributes to a circular economy, extends the lifecycle of the product and also has nice job security.
Canada
The Canadian government has now implemented a nation wide strategy toward zero plastic waste. They are improving recovery and remanufacturing processes. This of course offers a lot of job security to those that work in the recycling industry.
France
The city of Paris is strongly promoting the idea of the 15 minute city. This means that everything that the residents need can be reached within 15 minutes, either my foot, bike, or public transportation. Obviously this would greatly reduce the consumption of fossil fuels.
The Necessity for Change
It should be obvious by now that our economic system needs to change.
Unfortunately our global economy still embeds waste as a necessary by product of success. This is evident because we threw away 300 million tons of plastic in 2019. By the year 2050, scientists expect that there will be more plastic in the ocean than fish. One year’s worth of electronic waste is about 50 million tons. And while hunger still remains as a global crisis, the developed world throws away approximately 1/3 of all food produced. Furthermore, 100 billion tons of resources flow into the our economy every year and more than 60% of that ends up as waste.
So how do we prevent this from happening instead of just pointing the finger of blame at big business and big government?
One simply thing to do is consume less. Obviously we need to focus more on the wise use of our natural resources. During the 20th century, the world’s use of natural resources out paced population growth by 2 times. The wealthiest countries in the world consumes 10 times more than the poorest countries.
One simple, and often used example, is eliminating single use plastic bags. Over 127 countries have now introduced some form of ban or tax to regulate their use. One of the strongest policies is actually in Kenya. The government introduced a ban in 2017 and now 80% of the population has now stopped using them.
Another approach is to consume better. What this means is choosing versions of products that are produced in a more sustainable fashion, manufactured to have a longer lifespan, and can be recycled at the end of its life cycle.
One other aspect to our lives that most of us do not think about is how we eat. Shifting to a plant based diet offers numerous benefits to the environment. While I have no intention of being a vegetarian, I have reduced my meat consumption by at least 50%. And I rarely purchase beef any longer.
Sharing programs is another way to reduce our consumption of goods. Simply sharing some of your power tools with neighbors keeps them from purchasing things on their own. Renting tools that you need only for a specific job is another way to save yourself money and resources.
One thing that many of us commonly do these days is take advantage of streaming services. This saves from physically purchasing CDs and DVDs.
And obviously big business and big government have to get involved for this change over to be successful. For example the UK has introduced a tax on plastic packaging. The Republic of Korea introduced a compulsory food waste recycling program. They have also banned food waste in landfills which has led to virtually 95% of this waste being recycled into compost, animal feed, biogas or solid fuel. And the proposed European Green Deal has set out similar policies.
Summary
In the beginning of this episode, I first mention that the very basic definition of economics is that it is a study of how society utilizes its resources, meaning production, distribution, and consumption of goods and services.
What most of us have lived with for the majority of our lives is this take-make-dispose society. In other words, a linear economy. But this type of economy is completely dependent on a cheap and easy constant source of raw materials. This of course has significant detrimental ecological and economic effects. This type of economy also adds value as long as there is constant production of new products.
But, we are running out of resources and pushing the planet to the brink. We are now using resources far faster than they can be replenished.
Along comes recycling. While recycling has its obvious advantages, it is also resource dependent, the true effectiveness is in question. In fact, many critics simply say it is not worth it. However, it is a huge step above the linear economy.
Then we come to this concept of a circular economy where the object is to use, reuse, and recycle everything we can. Under this type of mentality, any product produced would be by design a repairable, reusable, recyclable product. What this means is that the resources that went into that product are used over and over again.
Consumers can participate and promote a circular economy by reducing what they use, reuse and repair what they do have. We can consume less and consume better. We can also support an increasing focus on purchasing products from companies that adhere to sustainable practices.
The bottom line is that this is not limited to being simply an environmental problem. It clearly makes social and economic sense to make use of the resources we have by having a system in place that avoids the production of waste and keeps our resources in the supply chain as long as possible.
In closing, I want you to think about these three simple facts as an example of why we need to produce a circular economy.
There is 100 times more gold in a ton of discarded mobile phones that there is in a ton of gold ore.
A circular economy produces a $4.5 trillion economic opportunity by avoiding waste, creating business growth, and producing employment opportunities. It also disconnects our economic growth from our environmental impact.
And lastly, if you listened to my last episode, Green Growth in Action, then you are familiar with the United Nations 17 Sustainability Goals. Number 2 on that list is zero hunger. If we could reduce food loss and waste by only 25% we could feed 870 million hungry people.
So think about all these things the next time you are tempted to open your laptop, order something online, and expect it to be on your doorstep the next day. Is that product reusable? Was it produced sustainably? Was it produced by a company that has environmentally friendly practices?
One of my goals of this podcast, which I stated in my introductory episode over a year ago, was simply to make this a fun learning adventure. But my other goal is to make you have doubts about the way you live. And at the same time to inform, teach, enlightened, and encourage you to put sustainable practices in every corner of your life. I truly hope that my simple lesson in economics has helped to accomplish just that.
This is your host Patrick signing off until next week. Always remember to live sustainably because this is how we build a better future.
Resources
From a Linear to a Circular Economy
Disadvantages of a Linear Economy
5 Ways to Unlock the Value of a Circular Economy
The Mind Boggling History of Recycling
13 Advantages and Disadvantages of Recycling
A Big Step Toward Ending Plastic Waste
Circular Economy: definition, importance, and benefits
