Circular Economy Effects Only Work Under One Percent Growth

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The Circular Economy Effects Only Work Under One Percent Growth

Christian Arnsperger:

"At this point I want to tell you about a very important man. His name is François Grosse. He is French and initially comes across as the epitome of the soft-spoken, serious, rigorous engineer which the French grandes écoles are famous for producing. An unassuming man, he’s very discreet about the momentous discovery that led him to change his own career path after having worked for a long time for the giant company Veolia. During a sabbatical, he was asked by the then-CEO of Veolia to analyze the business opportunities of the circular economy, and of recycling in particular. With characteristic earnestness, Grosse set out to understand how intensive recycling could help a business like Veolia do well economically while also doing good environmentally. Surely, he believed, generalized recycling would so strongly modify industrial metabolisms that over time, and with enough technological innovation, raw material consumption curves would become flatter — perhaps even plain flat or, why not, downward-sloping.

After several long months of pondering, doing calculations, re-doing them, and re-doing them again to really make sure, François Grosse had to come to terms with a result that shook his own convictions pretty deeply. He showed it to the CEO of Veolia but, most importantly, published it in a series of scientific articles in French and English. It’s a result that carries deep wisdom — and, as such, seems self-evident with the benefit of hindsight — but rocks the foundations of the whole mainstream circular-growth-economy establishment.

Here is how he summarizes his findings (in an article entitled “Quasi-Circular Growth: A Pragmatic Approach to Sustainability for Non-Renewable Material Resources”, published in S.A.P.I.E.N.S., vol. 4, no. 2, 2011):

“The influence of recycling on resource preservation is negligible for any raw material with a greater than 2% per annum increase in world production. It is only if the annual raw material consumption growth rate is below 1% that recycling has a significant positive impact. It can then provide over one hundred years of respite. However, … a growth rate in total material consumption below 1% is insufficient on its own, and, in addition, requires a very high recycling rate (more than 60 to 80%) in order to delay significantly the resource depletion rate. The time shift for cumulative consumption is highly sensitive to the growth rate of total material consumption (primary + secondary). The slower the growth, the more recycling contributes to ‘buying time’ before resource depletion. Recycling has a higher impact if material residence time in the economy is short; conversely, its impact is smaller for a long residence time. Finally, the impact of recycling must be analysed in relation to present economic parameters (as trends), not on the basis of an assumed future slowing down of consumption. As a whole, the relative impact of cumulative present-day recycling becomes negligible after a few decades in view of global production growth.”

So even provided recycling rates are very high (which they’re not in most cases at the moment) and materials cycle through the economy very quickly (which they don’t in most cases at the moment), recycling can only offer a general solution to the “clean growth” problem, as promised in “cradle-to-cradle” or “upcycle” approaches, if the sum of primary and secondary raw material consumption practically grinds to a halt — with a less than 1 percent annual growth rate. Could efficiency gains really ever be so huge (factoring in the resource costs the new efficient technologies would generate upstream and downstream from their localized use) as to allow for a financially desired growth rate of — say — 5% or 7% and a growth is sales volumes of — say 4% or 5% — while generating only a 0.5%, or even 0%, growth rate in global, planet-wide raw material use? Extremely unlikely, to say the least. Why? Because that would represent a truly astronomical efficiency performance and because, as Grosse very correctly emphasizes, our modern economies are intrinsically geared towards consuming more per person — more goods but also, in general, more resources, raw materials and energy:

“… our consumer society, far from being exclusively a society of disposable objects, is just as much a society of accumulation: increased wealth not only serves to consume what is short-lived, or intangible, but also to add significantly to our individual and collective ownership of material goods.”

Efficiency gains rarely, if ever, contribute to the advent of sufficiency. On the contrary, they become themselves the “raw material” for generating new economic growth thanks to lower raw material requirements — and, therefore, lower production costs — per unit produced. Efficiency does not serve as an economizing tool: In our type of economic culture, it is mainly a tool for marketing, that is, for increasing sales volumes after having economized on the resource intensity of the existing volumes. This is the basic dynamics of our economies, and it explains why the circular growth economy attracts so much enthusiasm among businesspeople and industrialists: The mirage is that of perpetually expanding markets along with perpetually contracting raw material consumption. A delusion indeed, especially when placed (as it is in many arguments by mainstream circular-economy enthusiasts) within a purported ethical framework in which the capitalist dynamic is seen as the privileged tool to ensure equal living standards for all human beings on the planet.

Against this delusion, François Grosse (in the same article already cited twice above) offers a rather sobering outlook:

“Material growth must be less, or even considerably less, than 1% per annum (growth rate of global production of each raw material, primary + recycled). The recycling efficiency rate must be greater than 60%, or even 80% (proportion of material contained in waste which is actually recycled). The rate of addition to stocks must be less than 20%, meaning that the economy must discharge as waste at least 80% of the quantities of each material it consumes. The path is narrow and challenging, demanding a strict balance between three fundamental parameters, failing which it would simply become impossible to find a solution to the problem of sustainable management of non-renewable resources.

… The richer countries therefore, as regards resource management, can and should consider and implement a ‘quasicircular’ growth: an economy with a very low level of material growth, accumulating as little as possible, and therefore proportionally generating a large quantity of waste which is largely recycled.

… a ‘permanently sustainable’ economy cannot, to be perfectly honest, rely essentially on material growth. … our analysis [acknowledges the need] to work on a transition towards a sustainable economy and to set environmental limits on human activity, in the shape not of theoretical criteria, but of criteria related to the economy’s statistical values.”

Please note: “… a ‘permanently sustainable’ economy cannot, to be perfectly honest, rely essentially on material growth.” You can’t be any clearer than that. Circularity will have to be compatible with low or no growth, or it will just be a time-buying, ultimately hypocritical gimmick that a handful of industrialists can use to tinker with their “symbioses” and “closed-loop human ecologies” at the micro level of a single plant or an industrial park, while leaving the long-term, global future of our planet pretty much as bleak as before — and perhaps even bleaker for our having delayed action through false promises and not having addressed soon enough the genuine sustainability problem that is facing humanity as a whole.

There is indeed deep wisdom in this exceptionally open-minded engineer’s insights into the perverse effects of a growth-driven economy when it comes to the alleged virtues of circularity. He shows us rather precisely how we can begin to discriminate between the well-meaning but ultimately false promises of unsustainable pseudo-circularity and the genuine and truthful, but more sobering, prospects offered by a sustainable circularity. What François Grosse has done with his notion of “quasi-circular growth” is nothing less than to revive the much-needed reflection on stationarity and sufficiency in our modern economies. He can therefore be seen as the father of perma-circularity. (I prefer “perma-circularity” because, contrary to “quasi-circular growth”, it puts the very notion of growth outside the main frame, thus making economic growth into a secondary, residual phenomenon entirely subordinated to the necessities of genuine circularity.)

In a sense, once we own up to François Grosse’s scientific findings, the only circular economy worth looking at is the perma-circular one. Over any horizon longer than 50 or 75 years — which as of today encompasses the lives of our children and certainly our grandchildren — we have no use for a pseudo-circular metabolism that is actually a steadily widening spiral: circling, yes, but spinning slowly out of control nevertheless, in ever broader circles of ever-growing circumference. We need a genuinely circular metabolism, and that can only be a self-maintaining circle — one that doesn’t spiral outward but, rather, promises to keep the same circumference for as long as our beautiful planet remains alive in its orbit around the sun.

So to come back to the questions posed at the outset of this post: No, a perma-circular economy isn’t some sort of neo-primitivist pipe dream; it’s, in fact, the epitome of modernity. And yes, we really do need to reduce; it’s, in fact, the epitome of rationality and has strong scientific foundations. “Perma-circularity” needs to become a pleonasm, and “circular growth economy” an oxymoron." (