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The three cycles of the circular economy

The biological, monetary and technical cycles of the circular economy

Most people take a narrow view of the circular economy, seeing it as renting out your car, selling second stuff etc. All true, but there is more to it. Firstly, things from nature need to circulate – food waste goes to compost goes to soil goes to food- for example. And trees go to wood to waste wood to fibre board to fuel maybe. And things come from the earth, like metals and they are made into, say, raw iron, then steel, then a product, then scrap, then more steel, and so on.

But money needs to go round too. Forget government hoarding surplus – that only removes money from the economy. We need the workers to get good wages so they buy stuff from factories that make good profits that pay good taxes and wages and so it goes round.

Many people react to the idea of people spending more because they think business will extract some stuff and dump others and leave the earth exhausted and polluted. They will. Unless there are either strict laws or stiff fees to stop them. So the circular economy will make it very expensive to extract or dump. And that is where the first and last invoice come in. In the life of a material, be it iron or sand, for example, the first invoice (paying for extraction) is the start of a long chain of invoices that the circular economy continues as long as possible. It puts dumping or burning off – the last invoice – and delays it in time. And the economy is rigged to reward them.

So, there are the basics. If you want to learn more about the three cycles, do look up the relevant course in our online school: https://circleeconomy.teachable.com

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We are a long way off from the true art of the deal

Stephen Hinton 2016, photo Maj-Lis Koivisto

Everyone knows, don’t they, that we we Brits need a good deal from Brexit – one that is good for us and does not give the EU an advantage over us? A bad deal will mean everyone in the UK gets a drop in standard and the EU will rise, doesn’t it? Well, not everyone thinks that. Wise leaders and experienced negotiators think differently. If Brits and indeed Europeans are to come out of this situation in a good way we need to give our trust to these wisest leaders and sharpest negotiators. And we need to think differently. Radically.

Being in or out of EU is about being part of a framework of agreements on trade, migration, food standards etc. It is about a deal. This assumes that if we get a bad deal, the EU will get a better deal. Because there is a finite cake and we must fight to get our share. Or if we are outside the EU we will get better deals and the EU will be worse off with less of the cake.

Let me lay this out for you as someone who has followed, if not been involved in, deals for a very long time. The first thing is that a bad deal for one does not necessarily – and most often not – mean it is a good deal for the other.

You see, we humans are more like a family. A really good deal – the best – is one that is good for both. Both sides have different situations and the good deal makes the best of both sides. In trading nations, one nation’s excess – that which they easily produce – can be traded for another nation’s excess where the other nation has difficulty in producing that thing. Win-win, or fair play if you like. Together we make the cake larger and share it fairly.

A bad deal for one will only reduce that partner’s capacity – less support for you post-deal – and probably get them feeling bad and wanting revenge. So the next deal after you got a “good deal” will probably see your trading partners dig their heels in looking for ways to screw you back. A good deal is a long game – good for family long term. A short deal where one gets screwed over is bad for the family as a whole. Good deals require good negotiators but above that they require good leadership.

Good leadership is seeing when a deal needs to be struck and doing everything to get parties to the table. Good leadership is having a vision of the long game and holding the values of family whilst looking after their own people. Whatever happens you need to know that the leaders you chose have YOUR back. Leadership is seeing when a good deal can be improved, or a bad deal can be remedied. Good leadership understands the balance between deals being made now and the momentum that creates, and the long game of nothing is forever.

Deals take time and effort to set up. The long game is highly effective, helping both sides thrive, increasing prosperity for both and therefore more opportunities to work together.
Bad deals leave one side disadvantaged and this brings down the whole family. Bad deals – like austerity – impact the whole family.

Good negotiators set deals up so they work. Good leaders make sure that the deal making is supported. Bad leaders let bad deals go on for too long. Good leaders see when new deals are needed and start the process. Good leaders carry with them a sense of mutualism and fairness whilst having a high degree of care for the ones they represent. Good leaders attract other good leaders.

The attitude of dominating one partner – rather than looking to mutual advantage – has been creeping into society and even the way institutions are run. You could say it is being normalised. This is utterly reprehensible behaviour.. We see examples of poor leadership all the time. Here’s one: a nation offers young men the chance to join the army – the chance of a career, identity, money, job security, doing something important and necessary maybe outweighing the risk of losing your life. But the same nation sees a large percentage of soldiers in the ranks of homeless rough sleepers. Bad deal. Waste of talent, waste of resources, and sending a “don’t care” signal that characterizes poor leadership and permeates all of society. One ex-soldier on the street is one too many yet we are forced to live in a society that lets it happen and we have to helplessly accept we have poor leaders.

A word of caution on deal making. There are times when the other side have poor leaders and even poorer negotiators. The other side resorts to all kinds of dirty tactics and seeks only to dominate the other part. What to do? Well, you need to recognise how dangerous they are to deal with. They often would rather go for a short öerm gain and one that gave them power than a decent deal for both.

Suppose you were planning a football tournament and had to play a really dirty team – how would you strategize? I know nothing about football but I can imagine you would study the other side and learn their tactics. Get the best referees you could, identify the dirtiest players and work to isolate them, train the team do deal with dirty tactics and to stay out of harm’s way as far as possible.

The standard approach is to just not even try to do a deal with unjust players. If you have to, create defences that protect you and your organisation as far as possible before doing the deal and restrict the deal to the absolute minimum. BUT still try to do the minimum deal. A small bridge between peoples is better than no bridge at all.

So how are the EU as a negotiating partner – do we want to deal with them, and are they fair, and are they doing their best to get a good deal for both sides? From where I stand I’d say “no”. They used strong arm tactics against Greece, shutting down their banks. They have unelected leaders and tend to stay on a path that favours liberalism and shuts out other approaches. I might be wrong, but if I were a UK leader I’d ask for a year’s postponement at least and get my best – absolutely best – people onto it. I’d need intelligence, military, diplomatic corps, business, university, union, human rights just to name a few. With such a dangerous partner you need to be fully prepared. And you need to be prepared to walk away.

Seeking out partners whose leaders have the moral fibre you are looking for is what you need to concentrate on. It may have once been a false front for greedy businessmen, but the commonwealth as a concept is sound. Trading for our common wealth. We should pursue it if we can find countries that match our moral standpoint.

In a way, in this family of humans, we are all leaders because we elect leaders. So it is incumbent upon everyone to make an effort to identify and bring to positions of responsibility good leaders. The greater the responsibility the greater moral fibre is needed.
Then it is incumbent on every leader to find good negotiators and give them the opportunity to forge these good deals.

In Britain, where sides are being taken, it is important to build bridges between the sides. If you are an avid Brexiter you should show leadership and seek out avid remainers. Seek to understand their view, seek common ground, seek to already now be looking at how to manage the aftermath of whatever result turns out. For example, whatever the deal, a sovereign nation has to find ways to forge a good deal for everyone whether in or out. There is always the possibility that a good deal with EU would be anyway a bad deal for ordinary working people if not done in a good way. And visa versa.

We as a nation understand fair play and we like it. We invented football and grew up intuitively understanding fair play because we got to explore it day out day in in our playgrounds and playing fields. With fair play, the cost of playing is lower and the results are better for both sides. Having strong morals is actually the most effective way of dealing with people. And efficient.

So do what good leaders do. Find good leaders, promote them, support them. Remove the bad ones. Take the long view in the short view. Focus on making sure people are alright and that anyone who gets the bad end of any deal gets it put right. We can do this – humans have been demonstrating good leadership and deals since time began – it is who we are – let’s get to it!

Case Study: Bringing citizens closer to sustainability in creative ways

trianglePLACE: Stockholm, Sweden, the office dealing with Cultural Affairs

SITUATION:  Stockholm is a forward-thinking city when it comes to sustainability. Helene Mårtenson from the office of cultural development explains the challenge;

to inspire citizens to a sustainable life-style by communicating substantially in new, creative forms.

FRAMING QUESTION: How can cultural institutions like libraries and theatres engage citizens in sustainable development?

See the Video below of the follow-up at the end of this post.


SOLUTION:  Engaging Stephen Hinton as environmental “creative consultant” the suburb of Farsta, Stockholm installed in the lobby outside the library and theatre a “sustainability kiosk” and embarked on filling the kiosk with ideas, events and other creative approaches.


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A first sketch of the sustainability kiosk

DETAILS:

  • Suggestions box  for ideas and questions
  • Brochures from local organisations with environmental focus
  • A round Farsta environmental walk – get to know your suburb’s environmental assets and concerns first hand
  • A social network connected to the kiosk – sign in and join the debate
  • A environmental story telling  corner for the younger ones
  • A set of “what’s its all about” cards – with environmental information relevant to the suburb for groups to use to get discussions going
  • Planned sessions and activities include
    • “Doctor Environment” who will sit and listen to symptoms and dish out “prescriptions”
    • A giant plastic foot that represents fossil emissions of C=2 from the city
    • A request for  early retirement written in a letter from “Mr Oil”
  • A mini- lecture corner for local organisations to invite people in to present their environmental activities


FOLLOW UP:

Trees help bring the conditions of peace – if you know how

Guest Post by Rishabh Khanna.
This year’s Right Livelihood Award carries an important message: if farmers using simple techniques can restore hundreds and thousands of hectares of degraded land in Africa then there is hope we can feed the world. We may, however, need to ditch some deep-rooted ideas. At Vi I Skogen ‘s Award Seminar in November, recipients Tony Rinaudo and Yacouba Sawadogo presented Agro-foresty to an enthralled and enthusiastic audience.

The standard practice of clearing trees to make fields for farming brings unintended consequences. The 1980 drought left Niger in a serious food crisis that led to some farmers encouraging tree growth to retain water in the soil. Tony Rinaudo, started by sharing the startling fact, that an increase in 1 percent of organic matter in an hectare of land increases the water holding capacity of the land by 144,000 liters. In Niger he said they were able to double the crop yield by simply adding trees in the landscapes. He explained to the audience that rather than planting trees, the focus is on pruning, selecting and protecting the trees that are already trying to grow.

He demonstrated to the audience how he prunes trees to encourage them to grow better, be healthier and all the dead roots and shoots can be used as a fuel by the local community.

Quick demonstration of pruning to invigorate tree growth (and get firewood)

Tony said that the key to successful agroforestry movements is to give them the permission to use their forests with education on how manage their land in a sustainable manner. Farmer managed natural regeneration (FMNR) is not owned by Tony or any other organization; it needs to be owned by the farming communities.

When he was asked by his own deeper purpose, and why he moved to Niger, he shared his story of his childhood from Australia. As a young boy, he was burdened by enormous inequality between the rich and the poor. He prayed to God to be put in a place where he would be useful. In the early 80s, he had the calling to go and work in Niger. He started encouraging and supporting bringing tree growth back. At first there was an enormous push-back from the village, as the assumption in those days was that trees and crops don’t go together. The famine of 1984, made things personal for Tony.

At first 10 people from 10 villages to start planting 40 trees per hectare, this grew to 500,000 hectares as it came under the food for work program. Later, when the government incentive was removed 25 percent continued with the practice.  Those farmers who did this practice noticed bumper yields in their land. Thanks to organizations like World Vision andWorld Resources Institute, there are now more than 24 countries where farmers practice FMNR. In 2012, at meeting in World Agro-foresty  Centre in Kenya, they shared that such a movement would spread across the Sahel.

The government in Niger realized their mistakes and has now integrated Agroforestry in their national strategy. The division between forestry and agriculture is artificial and can be at the root of drought and poor productivity. Niger understands that it is incumbent on government to create an enabling environment. And it does not take a massive investment in technology: with few resources Tony and his team in Niger have managed to restore 5 million hectares of land in 20 years.

Yacouba Sawadogo discovered theAgroforestry model of farming 45 years back and had similar success to Tony’s in restoring the land. In the follow-up panel discussion, Yacouba’s son said that tenure and user rights are essential as this is a very long-term process. Gender too, is big challenge in Burkina as most of the land is owned by men, so women can be in a very difficult position. This practice of Zai is spread all over west Africa including in Niger, Mali, Burkina and Guinea.

The potential is huge: trees are not only water retainers. When it comes to ecosystem services, some trees recycle nutrients and some trees can be used in the management of pests. They all sequester carbon. This area of Agro-foresty as provider of ecosystem services is inadequately studied.  

A lot of work waits to be done; according to World Bank there are two billion degraded hectares of land in the world. In terms of soil carbon, Agro-foresty is said to reduce 2.14 tons of CO2 per year per hectare.  There is a lot more research needed on the socio-economic benefits of Agroforestry, too. In terms of building resilience, there is one study that showed that FMNR practices have already reduced the risk of flooding in 2,783 hectares. This workshop truly inspired me to learn more about Agro-foresty methods, FMNR and how it can be applied in other contexts.

Rishabh Khanna, Initiatives of Change, (IofC)  focuses on the individual and the connection of personal transformation and global change. IofC looks for the synergies of change; encourages people to find their purpose, their connection to the world and to be a changemaker.

Opinion: The problems in Sweden are the problems in the world

Stephen Hinton 2016, photo Maj-Lis Koivisto

With the coalition of the left’s 144 seats in parliament and the right-wing block’s 143, and with the ultra-right wing Sweden Democrats left out of the block, many might be wondering whatever happened to the cozy social democratic, progressive Sweden held up as a model of a modern welfare state. Read More…

The future is circular! And training is free – mostly

Stephen Hinton Consulting, together with the Swedish Sustainable Economy Foundation are pleased to announce the launch of a new training site:

http://circleeconomy.tssef.se

Together we aim to help you in your role as business leader, policy maker or entrepreneur to understand the basics of the circular economy to be ahead of coming legislation and to prepare your organisation to thrive in this new situation.

The new site offers short lessons in a wide range of circle-economy related subjects such as:

  • understanding the role of nutrients
  • the three key elements of the circular economy
  • seven points of intersection
  • putting circularity into the balance sheet
  • policy makers: matching market based instruments and the demands of the circular economy

We need peace not growth. Just do a search and replace.

We did the following thought experiment: we replaced the word growth  or economic growth with peace in excerpts from statutes and statements from some main global organisations. Take a look. Is it in improvement? Maybe you agree with us that Peace is the thing we need to focus on!

Read More…

OPINION: Business as usual destroys more capital than it creates.

Stephen Hinton, photo Maj-Lis Koivisto

Business schools purvey the amassed experience of successful entrepreneurs from the last few hundred years. The problem with that is this experience is based on the availability of increasingly vast quantities of energy and cheap raw materials, along with licence to basically release waste straight out into the environment. This two century’s worth of “business” experience treats nature as an unlimited resource store and waste dump. An out-of-date mindset. We have moved on. There is a need for a new way of doing business: a system that takes into account the limitations of the planet and needs to maintain human well-being. That system is called circular economy. Read More…

Can we save the Baltic and improve our economy?

 

Stephen Hinton is a member of the board of the Swedish Sustainable Economy Foundation and specializes in aligning environmental concerns with fiscal systems. He has been involved in several projects, including with the Nordic Council of Ministers, to explore the possibility of using market forces to drive a circular economy for nutrients. One of the Foundation’s recent initiatives is a role-play/business game that explores the assumptions behind fiscal instrument application and sustainable technology investment decisions. These simulations reveal a wealth of insight into possibilities to change economic paradigms.

Stephen’s presentation focuses on the fiscal approaches to overcoming barriers including:

  • Behaviour: How to make doing right cheaper
  • Information:Opportunities arising from the digitalised economy
  • Efficacy:Where to apply instruments to encourage circularity
  • Investment:Using money collected from fees to overcome investment barriers
  • Political resistance: Ways to gaining political acceptance for extra charges
  • Public Opinion: Different effects on public opinion and behaviour.

Climate change and growth – Nordhaus and Romer

Micheal Roberts skillful analysis of the overlap (or lack of overlap) between the economics view of climate change and IPCC. A must read!

Michael Roberts Blog

It is both appropriate and Ironic that, on the day that William Nordhaus should get the Riksbank prize (also called Nobel) for his contribution to the economics of climate change, the top scientific body, the Intergovernmental Panel on Climate Change (IPCC), should release its latest update on global warming.  The report sets out the key practical differences between the Paris agreement’s two contrasting goals: to limit the increase of human-induced global warming to well below 2℃, and to “pursue efforts” to limit warming to 1.5℃.

The IPCC says that if we are to limit warming to 1.5℃, we must reduce carbon dioxide emissions by 45% by 2030, reaching near-zero by around 2050. Whether we are successful primarily depends on the rate at which government and non-state bodies take action to reduce emissions. Yet despite the urgency, current national pledges under the Paris Agreement are not enough to remain within a…

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