Circular economic growth

SANDRA VAN DER LEE (YOUNG PROFESSIONAL), JORINDE VERNOOIJ (YOUNG PROFESSIONAL)

SUSTAINABLE DEVELOPMENT GOAL 8:
Bevorder aanhoudende, inclusieve en duurzame economische groei, volledige en productieve tewerkstelling en waardig werk voor iedereen
https://unric.org/nl/sdg-8

A circular economy is needed to decouple economic growth from resource consumption and make economic development more sustainable. The move requires a shift from our current ‘take, make and waste ‘ system, to an economy which minimizes the extraction of raw materials. At present a large part of resource use is inherently linear, whereas the aim of a circular economy is to minimise the use of primary raw materials and the creation of residue streams. Despite the forecasted potential, implementing the circular economy is very challenging and will require disruptive innovation.

How do we bring about this change? The circular economy implies a transparent system in which we shift from material intense “single use” supply chains towards closed loop product systems. The key to this transition is the transparent depiction of materials and energy flowing in and out of our economy. In order to make use of the waste stream, we have to locate where these waste streams are and which materials are included. Current data analysis tools are not able to map the complexity of interrelated material flows. A mobile phone, for example, already makes us of hundreds of different materials from different countries in different packaging with different transportation mediums. Mapping these flows for only one phone is already highly complex. Mapping these flows for our total economy is not feasible with our current technologies. Therefore the transition to a circular economy requires a radical change in the way data is gathered and shared.

The design of blockchain technology has the disruptive potential to transform business-as-usual and the global economy. The technology establishes trust and transparency by creating a peer-to-peer value exchange platform without the interference of powerful intermediaries. The computational infrastructure of the blockchain makes it possible to run smart contracts across the network and thereby execute circular economy principles defined in the exchange. Blockchain technology could be used to make the supply chains and thereby waste streams traceable and the smart contracts could connect the waste streams to new users. Besides increasing consumer awareness, blockchain could also be a genuine answer to corporate social responsibility. The technology exposes the value chain and makes resources traceable. Transactions will be permanently connected to a company and green washing will no longer be possible.

Imagine you are sitting on the couch scrolling through your Facebook timeline and an advertisement for Fairphone appears on your screen. Interesting? Yes, but your current non modular phone still has an approximate lifetime of one year. You care about sustainability and want to limit your future consumption to sustainable and circular products. Therefore you commit to a smart contract which states that you buy the Fairphone if the price goes below €520,- in the upcoming year. Fairphone can make forecasts based on their predicted revenue because the contracts are binding and automatically executed. After eleven months you get a message that your phone will be sent to your home address. Fairphone asks you to send you old phone back so that they can reuse the materials. A week later your phone is delivered and you have taken your first step into the circular economy.

Sandra van der Lee

Sandra van der Lee

Master Industrial Ecology, TU Delft and University of Leiden

Jorinde Vernooij

Jorinde Vernooij

Master Industrial Ecology, TU Delft and University of Leiden
Eneco Energy Trade Trainee