Improving resource efficiency
The circular economy aims to respond to a major challenge: ensuring economic development for the 9 billion people living on Earth in 2050 in acceptable socio-economic conditions, while reducing the consumption of resources and the impacts of man on his environment.
Disconnecting economic growth from resource extraction involves introducing new value loops optimizing the use of the material at each stage of the life cycle. The circular economy scheme recapitulates the value loops for "technical nutrients" deriving from mineral resources, and for "biological nutrients".
Illustration 6: The value loops of the circular economy (source: the Ellen MacArthur Foundation)
ADEME has broken down the principles of circular economy as seven pillars involved in the three main stages of the value chain:
- sustainable procurement, eco-design, industrial and territorial ecology and functional economy that are mainly involved in the production phase;
- responsible consumption and extending the life of products when they are being consumed;
- Recycling and energy recovery at end-of-life.
This breakdown of the circular economy into pillars makes it easier for the concept to be appropriated by all those involved in the value chain. But the pillars are not "sub-disciplines" independent of the circular economy. They are all interrelated and contribute to the establishment of a economic system that is more efficient in the use of resources and that creates value. Setting up a sectoral policy is insufficient. The gains in energy efficiency of recent decades have been offset by a more than proportional increase in consumption (the "rebound effect")
llustration 7: The seven pillars of the circular economy (source: ADEME)
A hierarchy in the use of materials and waste treatment
The pattern of the pillars of circular economy establishes a framework for concrete action for societal stakeholders but remains inadequate in terms of prioritizing strategies for using materials.
The preferred hierarchy of waste treatment introduced by the waste framework directive of 2008 is chosen regarding product end-of-life:
Illustration 8: Hierarchy of waste treatment methods (source: inspired by the European Environment Agency)
Complying with this treatment hierarchy also means more jobs, since reuse or recycling require more labour than that required for landfilling. At a time when scarcity is no longer about the number of workers but about resources, we need urgently to rethink how to gain competitiveness by focusing on resource efficiency rather than the productivity of work.
Illustration 9: Number of jobs created by waste treatment method (source: ADEME, 2013)
Using tools such as life-cycle assessment (LCA) or analysis of material flows ultimately makes it possible to objectify the changes made to a process or to any other stage along the value chain.
New disconnection indicators:
Setting up circular economy-oriented business strategies and public policies requires dedicated and measurable indicators. The indicators are used to set quantified objectives, to evaluate and compare different strategies aiming to improve resource use efficiency.
Material productivity, for example, is the ratio of domestic material consumption to economic activity (domestic material consumption is the annual amount of raw materials extracted from the national territory, plus all physical imports, minus all physical exports ). This cross-sector indicator is already used at European level and could be used in regional contexts. Economic activity is, however, measured in terms of GDP, while alternative metrics taking stocks and social and environmental externalities more into consideration should be implemented.
Illustration 10: Material productivity by European country in 2013 (€/kg) (source: Eurostat)