The linear model economic model of take-make-use-dispose is unsustainable. That much is clear from the huge quantities of primary materials (over 100 billion) being extracted and used in the global economy each year and the impact this material use and disposal has on our environment.
In the last decade, European nations have taken the lead by clearly embarking on major circular economy agendas. Whether the motivation for this shift is primarily to create a more competitive economy, meet the needs of a growing population, comply with emissions targets and address climate change, or create better social outcomes, the move from an economy based on extraction and consumption to one of regeneration and restoration has become a priority for policymakers around the world.
Progress in Australia has been slower. In recent years government at the local, state and federal level has begun to implement policy to address our reliance on landfill and underdeveloped resource recovery sector, but this action remains focused primarily on waste and recycling initiatives. In contrast, a functioning circular economy requires a complete system rethink beyond the disposal stage to include the full material cycle including design, manufacturing, transport, retail and use. The Australian business community, however, appears willing to begin the transition.
Australian businesses are ready for the circular economy
The Australian Circular Economy Hub (ACE Hub) releases an annual research report measuring how Australian businesses are progressing in their understanding and implementation of the circular economy. In the 2021 edition of the report (Circularity in Australian Business 2021), an overwhelming 88% of business decision makers surveyed agreed the circular economy was important for the future of their business, including 34% who identified the concept as extremely important. This is a significant jump from the 21% who thought it extremely important in 2020, showing business leaders are increasingly recognising the need for a system-wide transition to circularity.
The report builds upon insights generated by the first edition of the research released in 2020, which baselined the state of circular economy thinking among Australian businesses. The 2021 research included several in-depth qualitative interviews with C-suite level executives and among these business leaders the consensus was even more clear. As one said during the interview process: “It feels like the circular economy is at a tipping point”.
An effective transition brings economic benefits
Driving the transition to a circular economy is beneficial beyond addressing the significant environmental issues we currently face; it also brings economic benefits. The World Economic Forum estimates the circular economy could yield up to $4.5 trillion in economic benefits by 2030 through promoting the elimination of waste and the continual safe use of natural resources. These economic benefits are delivered through reducing pressure on the environment, improving the security of the supply of raw materials, increasing economic competitiveness, stimulating innovation, stimulating economic growth and job creation.
Without concerted action Australia stands to miss out on a piece of this circular pie. The WEF estimated the value of a circular economy in Australia could be up to $26 billion per year by 2025 and contribute significantly to reducing emissions. Now is the time to drive a circular transition, both to gain economic advantage and to show leadership in the huge challenge presented by climate change.
The time for action is now
The 2020 Circularity Gap Report (CGR), a global assessment of circular economy progress produced by Circle Economy, states the world is currently just 8.6% circular. It’s reasonable to expect that Australia is either at or below this mark given the limited movement to date on circular economy policy. But the means of achieving a significantly better result are available. This year’s edition of the Gap Report drew on five years of analysis to provide a roadmap of 21 circular solutions businesses, cities and nations can use to reduce resource extraction and use by 28%, thereby cutting greenhouse gas emissions by an estimated 39%.
The time for an economic reset is now, and collective action is how we achieve it.