• Daryll Griffith

A Circular Economy: Lessons for T&T

From the dawn of our existence, we have taken resources, used them and moved on, leaving the remainder behind. Nowadays, our consumption pattern remains largely the same and as our population and desires increase, so has the volume of waste. One common example in the media are plastics, one of the most used commodities on the planet. National Geographic research states that since the invention of plastic in the late 1900s, we made approximately 9.2 billion tons of the stuff of which 6.9 billion tons have become waste, and within that waste, a staggering 6.3 billion tons have never made it to a recycling bin [1].

Source: Mohamed Abdulraheem / Shutterstock.com

The state of the plastic economy has reached new heights, to the point that plastics are being banned in many countries, a running list is kept by several interested organizations. While many approve of this initiative to ban single-use plastics, we are still left to manage the situation that currently exists.

How do we keep plastics out of our oceans and keep them within the economy?

The concept of a Circular Economy comes into play as we attempt to solve this problem. The Circular Economy as described by the Ellen MacArthur Foundation is “ a new way to design, make, and use things within planetary boundaries. A system that involves everyone and everything: businesses, governments, and individuals; our cities, our products, and our jobs [2]. McKinsey describes it as ‘an industrial system that is restorative or regenerative by intention and design [that] replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impairs reuse and aims for the elimination of waste through the superior design of materials, products, systems, and within

this, business models’ [3]. The image below is included to give a visual representation of the circular relationship between inputs, outputs, and consumers.

Figure 1: The circular economy system diagram

Source: Artificial Intelligence And The Circular Economy AI As A Tool To Accelerate The Transition

So why is this important?

Simply put, the current economic system is unsustainable. The rising global population and increases in the standard of living are incredibly limited by the availability of finite metals, minerals, and fossil fuels. The regenerative capacities of land, forests, and water are becoming strained to meet our expansionary needs and destructive practices. Health is potentially affected by the poor air quality in cities, and the ever-increasing threat of climate change on our livelihoods is increasingly becoming a reality [4]. For example, approximately 60-70% more food is needed by 2050 to feed the growing global population [5] however, the manner in which food is produced at scale can degrade soil quality [6]. One approach would be to erase the emphasis on growth, however, stopping or reversing economic development is neither socially acceptable nor desirable by any country and growth is a common theme around political aspirations. How the global economy has grown in the past, i.e higher resource utilization (See Figure 2 below), is incompatible with the complex needs of today’s global environment, economy, and societies as we seek to achieve sustainable development.

Figure 2: The relationship between Domestic Material use and Economic Growth

The Circular Economy, however, presents an opportunity for innovation in business, to evolve their supply chains and create a circular flow that feeds back into their products. Research from the Ellen MacArthur Foundation suggests that shifting to a circular model can yield up to USD 700 million in material savings in the consumer goods industry [7]. McKinsey suggests that in Europe Alone, resource productivity can be improved by 3 percent by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits [8].

So why isn't the world Full Circular?

While the concept of a Circular Economy is gaining popularity in recent years, and several success stories across various industries can be found at the Ellen MacArthur Foundation, shifting to a circular model means changing our linear economy’s value chains, financing mechanisms and customer’s perception of waste. Doing the work mandates that we will need more data, awareness programmes, renewable energy, more bio-materials, biochemicals that are safe to people and planet, and products that are designed to be easily recovered and recycled. Waste has historically presented a data challenge, even within reports from highly regarded sources. Solid waste data is taken with a degree of caution because of inconsistencies in definitions, data collection methodologies, and availability[9]. With a lack of accurate and up to date data regarding waste flows and composition and no monetary value of its indirect effects or positive benefits in defined spaces, it presents barriers for traditional financing mechanisms to accurately quantify returns to stakeholders [10].

Waste as a Data Problem

Solid waste is a complex mixing pot of various materials, particularly when its point of disposal is neither separated nor organized. Quantification, optimization, and monitoring of waste streams are better suited to be handled by autonomous systems as history has shown that traditional systems are unable to do it quickly and effectively. The world is becoming increasingly digital and handling large volumes of complex data is becoming increasingly affordable [11]. Companies such as Google, one of the world's largest users of Artificial Intelligence (AI) systems suggests that AI capabilities can help build a Circular Economy. Google expects AI to: (1) Design circular products, components, and materials; (2) Operate circular business models; and (3) Optimize infrastructure to ensure circular product and material flows [12].

Lessons for Trinidad and Tobago (T&T)

Figure 3: The relationship between Domestic Material use and Economic Growth in T&T

Following the trend of the rest of the world, much of T&Ts growth in GDP has come from increased usage of natural resources as the graph above shows an almost one to one relationship. Data from the Ministry of Trade’s Invest TT’s website [13] states that T&T’s economy is made up of the following categories;

Figure 4: T&T’s Major Economic Drivers

Apart from a well-known Oil and Gas sector, T&T has a non-energy manufacturing sector as seen in the image above. Data on waste management in T&T, however, is not as well defined in the country’s four major landfills. Available data from the 2015 National Waste Recycling Policy states that 1000 tonnes of waste is received by the four landfills per day[14]. Other valuable sources of waste such as Wastewater, Methane deposits, CO2 Emissions, Electronic waste, etc, also exist however little data is within the public sphere to report on and none is disclosed by the private sector. These gaps in data, coupled with a slow regulatory framework will limit entrepreneurship and innovation with regards to helping to create a Circular Economy in T&T.

In closing, if the forward-thinking private sector within T&T rises to the opportunity and incorporates a Circular Economy framework (See figure 5 below) into their business models, the potential to improve their supply chains, create additional revenue streams and reduce imports of raw materials and goods exists. This approach not only creates a competitive advantage that will last well into the future, but it also helps ensure that we in fact, do have a future.

Figure 5: Framework for Circularity in Business Strategy

Source: Tonelli, Marcello & Cristoni, Nicolò. (2018). Strategic Management and the Circular Economy. [15]

End notes

[1]"We Depend On Plastic. Now, We’Re Drowning In It.". 2018. Nationalgeographic.Com. Accessed June 23 2019. https://www.nationalgeographic.com/magazine/2018/06/plastic-planet-waste-pollution-trash-crisis/.

[2] "What Is The Circular Economy?". 2019. Ellenmacarthurfoundation.Org. Accessed June 23 2019. https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy.

[3]EMF, & McKinsey. (2012). Towards the circular economy: Economic and business

rationale for an accelerated transition. Retrieved May 2013, from http://www.ellenmacarthurfoundation.org/business/reports.

[4] "Effects Of Climate Change | Threats | WWF". 2019. World Wildlife Fund. Accessed June 23 2019. https://www.worldwildlife.org/threats/effects-of-climate-change.

[5]2019. Fao.Org. Accessed June 23 2019. http://www.fao.org/fileadmin/templates/ws

[6]"Detail". 2019. Food And Agriculture Organization Of The United Nations. Accessed June 23 2019. http://www.fao.org/soils-2015/events/detail/en/c/338738/.

[7]"What Is The Circular Economy?". 2019. Ellenmacarthurfoundation.Org. Accessed June 23 2019. https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy.

[8]"Mapping The Benefits Of A Circular Economy". 2019. Mckinsey & Company. Accessed June 23 2019. https://www.mckinsey.com/business-functions/sustainability/our-insights/mapping-the-benefits-of-a-circular-economy.

[9]Kaza, Silpa, Lisa Yao, Perinaz Bhada-Tata, and Frank Van Woerden. 2018. "What A Waste 2.0: A Global Snapshot Of Solid Waste Management To 2050". The World Bank. doi:10.1596/978-1-4648-1329-0.

[10]"EU Commission Launches New Report On Financing The Circular Economy - CICERONE". 2019. CICERONE. Accessed June 23 2019. http://cicerone-h2020.eu/2019/03/06/new-report-accelerating-the-transition-to-a-circular-economy/.

[11] "The Economics Of Artificial Intelligence". 2019. Mckinsey & Company. Accessed June 23 2019. https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/the-economics-of-artificial-intelligence.

[12]2019. Storage.Googleapis.Com. Accessed June 23 2019. https://storage.googleapis.com/gweb-sustainability.appspot.com/pdf/AI-and-CE.pdf.

[13]"Economy | Why Invest | Investt". 2019. Investt.Co.Tt. Accessed June 23 2019. http://www.investt.co.tt/why-invest/economy/.

[14]2019. Planning.Gov.Tt. Accessed June 23 2019. https://www.planning.gov.tt/sites/default/files/WASTE%20RECYCLING%20POLICY%202015%20Final.pdf.

[15] Tonelli, Marcello & Cristoni, Nicolò. (2018). Strategic Management and the Circular Economy. 10.4324/9781315102641.

100 views0 comments