#135 Gifts and Limits of the Circular economy

by | Oct 15, 2019 | Second Opinion | 0 comments

# 135- Gifts and Limits of the Circular economy


Carol’s Topic for Discussion: What is the way to bring real change/ for example, planetary and societal health, and we will use Circular Economy as a way to test a theory of change on this subject.

Circular economy has been adopted by a lot of businesses in the last decade including Google. Its creation is an interesting story. Ellen MacArthur circumnavigated the globe, solo, break the world record (71days and 14 hours) with only a small pack of goods. It made her very aware of the finite resources and how little we can live with. But instead have adopted a lifestyle of accumulation of material goods. 

  • On her return she set up a foundation to explore a better way to manage Earth’s resources. The findings led to a concept now know the ‘circular economy.” 
  • It has been adopted widely as a result of the World Economic Forum’s Annual meeting at Davos in 2013 which had a big enough platform to get the word out. 
    • The message was, ‘companies need to look for better ways to manage dwindling natural resources. Especially those that are most prolific in use of resources like Digital devices, packaging, food waste and apparel.
  • Reflections from BSO

 

      • It is a valid idea, but can it make a difference on planetary health? 
        • Yes! But it has a lot of limitations that tend to be blocked out by the advocates of Circular Economy. 
        • The reason for the yes, it that it will slow down the driver of one of the biggest challenges we face in the climate crisis.
        • The reason it is limited is the same problem that got us into the mess. Surprisingly, we are thinking from the old paradigm, the Extract Value one, that got us into our resource depletion acceleration we are in.  Or a reaction to it. 
        • The question is,” is it powerful and deep enough to get us to a new world view?”

Paradigms on the Way People Change- Quick Reminder

  • Extract Value is when people think of resources in Ownership Terms. The one where whoever owns it, get to extract the value from it. 
  • The next paradigm is Arrest Disorder, which is trying to slow down the harm that comes from the ownership/extract value paradigm. The source of the Sustainability movement, fair trade and other programs.
    • And this is where Circular economy shows up, as we shall see. Not bad stuff, just a limited paradigm to really innovate from and make quantum jumps which we need at this point on the planet.
  • The next most encompassing paradigm is the Do Good paradigm.
    • Where arrest disorder wants to reduce the harm, Do Good wants to get behind the problem and do something more systematically.
  • And the most encompassing paradigm is the Regenerate Life paradigm. It is about evolving capacity of living systems based on the uniqueness of each life form and being. 

A Deeper Look into the Paradigms of Change

  • The Extract Value folks have narrowed the beneficiaries of the economy to a very narrow set. And it is  based on a physical world view. It is all about what we can own and sell or use for the owners benefit in the transactional world. There are three domains in which benefit is seen as possible. Assets, Labor and Materials.
    • For example, in the extract-Value paradigm,  Assets are seen as instruments for the production of goods and services. 
      • Assets like Infrastructure such as roads and institutions, dams and farms, plus forests when they are seen as warehouses of raw material. 
      • Labor can include everything from employees and their wages to slaves that are held for sale directly or their bodies, or their ongoing labor. 
      • The third domain is materials which is the resources themselves and the matrix in which they grow value, like soil and watersheds. 
    • Circular economy comes from this paradigm because they are seeing the correction to the problem through the eyes of the value extractors, which is fragmented. 
      • The conglomerates see each of these three domains as separate. And, so do most of the people working on the ecological and environmental world to solve the big problems..
      • For example, the resources are seen as separate from the matrix which nourishes them. And the humans who think about them.
      • They accept the capitalist arenas of assets, labor and materials as isolated subjects.  Fixed and segmented. And they divide up into groups and work on them separately just as the extractors do. So, working on reducing resource consumption, like plastic, steel, minerals, separates these resources from those who work on the matrix of those resources, the oil fields,  or ore in mountains and biota in soil. You end up working with a “Waste less” group of folks working separately from soil folks who are doing organic and sustainable farming. And yet they are all material. It is the same paradigm as the Value Extraction folks but just putting the brake on. 
    • And then there are separate groups who work on the Labor domain problems like Slavery. They work to protect and prevent the abuse of humans. And separate groups who work on prevention of cruelty to animals in the factories and research labs. There are groups working on equity, inclusion and fair trade.
    • The same in the asset domain, which includes public assets and regulatory agencies who pay attention to not degrading the shared assets like air, and water focusing on carbon sequestration and non-contamination. And groups who work on policy for carbon pricing and emissions trading. 
    • Why is it that Circular economy fit here in the value extraction  paradigm?
      • Circular Economy has followed the fragmentation process established with the industrial revolution and capitalism.
      • Since the industrial revolution, we have been living in what is now seen by the Circular economy as a linear economy. 
      • Our consumer and “single use” lifestyles made the planet a “take, make, dispose” world. This refers to a unidirectional model of production: natural resources provide our factory inputs, which are then used to create mass-produced goods to be purchased and, typically, disposed after a single use. 
      • This linear economy model of mass production and mass consumption is testing the physical limits of the globe. It is, therefore, unsustainable and a shift toward a circular economy is becoming inevitable. It is a paradigm that lays the groundwork for arrest disorder. Not wrong, but too limited to really work in meaningful ways. 
      • Circular Economy accepts the paradigm built by the capitalist paradigm based on extracting value and become limited in what they can see from there. 
        • They can only see the material world, which is the outcome of the limitations from the narrower paradigms.
      • For example, the industrialist and financial world want to extract value. Circular Economy is limited to that view, but by how selfish and destructive it is. 
        • So, they work on Retaining value.  In the  mind, it is the same three domains of Assets, Labor, and Materials- they select one aspect of the physical domains. And then subdivide into smaller domains and look at the natural resources cut off from the matrix from which they arise, e.g. Soil, biota, watersheds.
    • The underlying problem is the paradigm of extracting value, which then continues to be used by the paradigm of arrest disorder, which is about overcoming the extract value and thereby reducing the harm is just a war with two sides in three domains. Expand Value by growth of physical value versus the, “Slow it down. or Reverse expansion growth.” 
  • If they at least moved to the Do Good paradigm, they are now connected to the system in which things happen. 
    • They can see geologic systems, biological, economic and more systems at work. The flaw is that the system cannot be seen from the lower paradigm, because it is not in the broken down fragments that are demanded. These fragments are products of our way of thinking. They cannot see the holes in which Life exist.
    • Do Good is the level above of the Arrest Disorder paradigm. Value here is distributed and potentially reciprocal. Not narrowed by ownership or retained for shared ownership. There is no ownership.  
    • Each paradigm we go up gives a more complete and whole way to look at the same subject matter. 
      • The domains move from physical to imbedded in systems is a watershed, or a neighborhood or city.  The geological systems can be seen on a global scale as can hydrological, biological, settlement systems, economic, cultural and even thinking systems.
      • Benefits of seeing this is we wake people up to the challenges we contributed to including needing to reduce the waste.  But it is limited because it is still not seeing the world at levels above.
  • The Regenerate Life paradigm asks, not what is bad or what is better, but what is nodal?.” 
    • Where do you work that can work on all of this rather than on a slice that gets attention because you have the money that an heiress like Ellen MacArthur has.
    • We cannot argue that we need to reduce consumption. But is it not necessarily nodal. It is incremental.  
      • Even Paul Hawkins and the team who did Drawdown gave us a list. A prioritized list of solutions (read fragmented), but not a nodal idea. 
      • What is foundational? And it is all at the same level of physical world domains we started with. What is nodal is the regenerative question? BSO thought is:
        • Critical thinking skills like living systems thinking so we can see when we fragment, overcome the tendency to pursue generic answers for all  rather than see them as unique alive entities like persons, watersheds.
        • Nowhere on the Drawn Down list is Systems thinking. Paradigm shifting was on Daniella Meadow’s list as the most leverageable way to bring about change. But she did not live long enough to develop it. 

Carol Sanford Institute has been working on it for over forty years now…Working on Thinking and developing regenerative thinking capability. Without this capability, Change is really slow because you have to have people receive the answers which they can’t grasp and don’t see the impact of their actions and it stays abstract to them. Thinking is the power mover for everything on the lower level paradigms, including how Capitalism was originally seen as working for the benefit of all, even by Adam Smith. But that is a conversation for another day.

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Harvard Business Review References:

  • RETHINKING Sustainability in Light of the EU’s New Circular Economy Policy, by Atalay Atasu, Vishal  Agrawal, Michael Rinaldi, Rob Herb and Sezer Ulku. July 3, 2018
  • How Businesses Can Support a Circular Economy, by Terence Tse, Mark Esposito and Khaled Soufani. Feb. 1, 2016
  • Is your Company Ready for The Circular Economy? By Eric Hellweg. January 25, 2013.

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