Stephenhinton.org just learned that the aggregator FEEDSPOT has this blog listed as one to the top 20 sites on circular economy. See the full list here.
My recent article on how come capitalism is an extractive practice, and the later explainer of how it degrades real capital got, for me at least, a lot of interest. Very few, however, asked what could be done about it. Once you know the problem you are a long way to solving it. There are several ways to turn the extractive nature of capitalism around, and they are surprisingly simple. Read on!Continue reading “Simple quick fixes to capitalism you never knew could be done”
We are pleased to anounce the German arm of our Circular Economy Training is getting up to speed with the release of the German version of our FREE downloadable booklet.
If you prefer talking about the circular economy in German, this is for you. Get yours here!
Reposted from the site for teachers maths4sustainability. This particular problem might be of interest to regular readers – it presents the idea of energy slaves which is one of the biggest challenges facing circular economy.Continue reading “Energy Slaves”
Simply put, the circular economy is one where biological materials are harvested and returned in a way that preserves, indeed regenerates, eco systems. Materials taken from below the earth, like minerals, stay in circulation. However, the notion could contain more. With eco systems preserved and with a high availability of minerals peoples’ basic needs could be met and a new era ushered in where there is enough for everyone. The circular economy – if introduced right – could help bring peace.
Consider the following:
- From a starting point where we recognise people need peace, the circular economy can be set up to provide a basis for a world with a culture of peace.
- By making resources abundant and available to all, the ability to make a decent living within natural limits comes into everyone’s grasp.
- A culture of peace is even a culture of peace with each other. By eliminating the need to struggle all day every day just to meet basic needs gives people more time for personal growth, to find peace with themselves.
- Much of the conflicts in society are eliminated when peoples’ basic needs are met.
Father Greg Boyle
Nothing stops a bullet like a job.
By harvesting biological material responsibly, and keeping minerals in circulation the circular economy reduces the burden on the Earth and indeed lays the ground for the ability for future generations to be able to fulfil their needs.
The Circular Economy provides the opportunity for everyone who needs a job to have one. Once gone, the fossil energy we use to extract, move and dispose of stuff will need to be replaced by the work of many hands.
The Circular economy is one which provides basic security in harmony with the Earth. Security of the basics – including the opportunity to find meaningful work – is a good start towards peace.
From the introductory booklet available from the Academy of Invest in Peace
The Circular Economy provides the opportunity for everyone who needs a job to have one. It ensures that resources are abundant for needs and eliminates the need for people to struggle against each other to make ends meet. People get time and space to find peace in themselves, and live in a way that is in peace with the Earth, eliminating one of the major causes of conflicts between people.
Learn more about the circular economy by visiting the academy
Writing in the Swedish daily, SVD, on 7th July, Johan Rockström set out some bitter truths (my translations):
- Green growth – that is to say the economy grows whilst extracting less from and reversing damage to natural systems – is nigh on impossible.
- It is questionable whether the goal of maximum 1.5 degrees increase in global warming can be achieved.
Let us examine these points from a circular economy and bathtub economics point of view.Continue reading “What does Bathtub Economics say about green growth?”
I believe we need to start to envision what a circular, low-impact, bio-based society will look like in order to usher in the fossil free era.
Indeed the Swedish Government have already declared in January 2019 that they aim for Sweden to be circular and bio-based and resource effective.
I guess we need the circular vision at four levels:
- The circular house
- The circular neighborhood
- The circular municipality
- The circular country
- The circular nation
Below is a first sketch of what a circular house might look like:
- Close to the necessary services (Cycling – ebike – distance?)
- Part of a circular neighbourhood
- Captures energy, water
- Is energy effective
- Recycles nutrients
- Is part of food provision, too
- Lots of reparable items
- Or compostable items
If we have the circular house then we need local businesses that serve houses and apartments a n d supply all that is needed for the transition. This could be huge business.
Some investment visionaries are rubbing their hands in gleeful anticipation of what AI (artificial intelligence) can do and what they can earn from it. AI has already shown that it can, cheaper and better, do the jobs of warehouse workers, doctors, lawyers and so many other professions. We ask the question what if it could do the job of investing better than capitalists themselves? How would that work? Would capitalism as a way of providing what we need become outdated?
For a long time now, the liberal attitude is that private enterprise, driven by greedy but well-meaning people with money they want to see grow is the best in class problem-solver. Transport? Enter the Henry Fords. Internet services? Enter Googles. Shopping online? Enter Amazons. A sustainable, equitable society? Enter … well we are waiting.
It only takes a short flight of the imagination to see the potential. Already, city developers and other experts are painstakingly developing the workings of something that could change the very logic of investment forever: cities that work for people, owned by people, supported by AI.
City infrastructure – power, transport, waste handling, commerce, water etc., key to creating sustainable cities, cannot be left to individual contractors and private investment to get the city quickly on the path to sustainability. Consultants like Resilience.io are offering infrastructure design applications that optimise infrastructure, use the latest and most sustainable solutions available, and end up often reducing investment needs by as much as 40%.
It is only a short step away to applications like those from Resilience.io can begin writing requests for tenders and indeed legal agreements. In fact, AI could start to propose whole company structures with business plans accompanied by full financial analysis.
So how about planning a city? One not just with an infrastructure that is eco-friendly, circular economy, but one that affords all citizens a decent life? And that includes the city’s vast hinterland. If AI can write songs, stories, design products, prepare legal cases it could well design not only spaces but ownership patterns, investment instruments, jobs, organisations, indeed whole cities.
Now, the wealth created from investment seldom trickles down to the poorer inhabitants. Current capitalist or even social democratic approaches are simply not cutting it.
Suppose, then, that this AI system gets tasked to design optimal sustainable infrastructure along with the optimal ownership pattern of the companies building and running the infrastructure and benefit for residents.
This is new. Under capitalism and social democracy firms produce primarily for profit rather than need. In this proposal, the firms should produce primarily for need. Obviously, one driving force, the possibility to earn money, should be there for private enterprises.
I imagine the AI system might come up with some form of Public Private Partnership. The firms building and operating the infrastructure are 50% owned by private interests, and 50% owned by an investment firm where every city resident is an investor and has equal voting rights.
In this way, not only does the city get great infrastructure, but the better the firm runs, the more dividend goes to residents (and private investors). And citizens get to have a say. One share gives one vote. They might even want to buy more shares if they believe in the company.
As they own part of the infrastructure residents might even be interested in looking after it, reporting faults, handling it with care, etc.
Maybe AI can be the force to help us get past the current impasse of capitalist/socialist – left/right outdated thinking?
Stephen Hinton Consulting recently completed the compilation of a database of Market Based Instruments that have been thought of, proposed or applied to stimulating the economy to circularity. The list is far from comprehensive but was put together as a first step for the Circular Economy Delegation to gain an initial insight into the opportunities for politicians and authorities to use these instruments to introduce full circularity into the Swedish Economy.Continue reading “Recent Assignments: the Swedish Circular Economy Delegation”
If renewable solutions were cheaper for firms to use, they would. This is how price signals function to steer the behaviour of firms. For the circular economy to function, price signals should favour circular products and production methods. In other words, it needs to make better business sense to install circular and renewable energy infrastructure, and to install and use infrastructure that uses recycled materials. Without that, the linear economy – one that inputs extracted materials and outputs materials as waste – will continue to be the modus operandi of the profitable firm.
This article explores how to use price signals to steer firms’ buying behaviour in a way that keeps the economy stable. Market-based instruments are financial mechanisms that steer price signals to guide the behaviour of firms and markets in general.
What not to do
The product cost price equation reveals the opportunity
ProductCost= Labour + Energy(Renewable + Fossil) + Materials (Recycled + VirginExtracted)
From the equation above it follows that the relative prices of renewable energy compared to fossil will affect the choice of energy source and the end-price of the product. So will too the price of circular materials over extracted materials affect sourcing decisions. If renewable energy is more expensive to utilize then fossil energy will be substituted. The same goes for recycled materials being substituted for extracted ones.
Add a progressive charge on virgin material and distribute it to all taxpayers alike. (Fee and dividend model.)
As proposed by the Swedish Sustainable Economy Foundation, a progressive extraction surcharge (or import surcharge) on for example fossil fuels could be levied when the material enters the economy. This surcharge is raised at regular intervals. This is a process of discovery; the levy is raised until sustainable products reach price parity with unsustainable alternatives.
A surcharge on waste leaving the firm could have the same effect, assuming the surcharges are carried over to the final consumer price. This makes sustainable products competitive. We can represent this in the equations below.
ProductCost_Linear=Labour +Energy(Surcharge+Fossil) + Materials (Surcharge+VirginExtracted) + WasteSurcharge
ProductCost_Circular= Labour + Energy(Renewable)+ Materials(Recycled)
ProductCost_Linear + Surcharge>ProductCost_Circular
However, introducing the fee would make the overall range of product offering more expensive to the end-user.
ProductCost_Linear+ Surcharge> Normal Market Price
ProductCost_Circular>Normal Market Price
To redress the imbalance, all or most of the fees levied should be returned to tax payers as a dividend. Guaranteeing the repayment of a sufficient fraction of the dividend in equal amounts to every tax payer by law will be an important step in an Environmental Fiscal Reform and an essential component for majority support in a functioning Circular Economy.
The equation would thus look like this:
ProductCost_Circular -Dividend=Normal Market Price
The repayment is needed to secure that the majority of the tax payers will always receive more dividend (repayment) each month than their increased cost of living due to the fees levied to correct the price signals and to create a sustainable economic incentive structure.