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Economics

Cuora Consulting: The Circular Economy

Reading time: 3 minutes

3slider2By Andrea Natali

Droughts, rising sea levels, patches of debris floating in the ocean – the consequences of our society’s abundant resource use and waste production are regularly dominating headlines and news. It is now obvious that the path we have followed since the Industrial Revolution has become a threat to our planet. Scientists, business men and civil society have begun to question the way we produce and treat waste. In recent years, societal pressure and environmental urgency brought up an innovative idea: The Circular Economy. Instead of regarding side products as unhandy, non-usable waste, proponents of the approach value waste as a primary input. From a linear production system, we would move to a circular one. As such, circular economy relies on three pillars: waste prevention, eco design and re-use and recycling of products. It is a way to create economic profit while protecting the environment: we use less of the precious and scarce primary resources available on our planet and produce less waste.

As the World Bank has shown, the issue of waste reduction is more than urgent: cities across the world currently generate about 1.3 billion tons of solid waste; along with population growth, each individual today produces more waste than ten years ago. Disposal represents a challenge for most municipalities, yet few cities stand out from the crowd. The Italian Consortium of Compost Industries praised the city of Milan, recognizing it as the largest municipality worldwide to properly collect wet waste from its citizens. San Francisco, called the “Silicon Valley of recycling” by the New York Times, hosts Recology, one of the world’s most advanced recycling plants which has even developed into a must-see destination for tourists from all over the world. Yet, the economic potential of waste management is not fully exploited. Recology itself has created more than 200 jobs and is proof of how technology and capitalism can have a positive impact on the world: the firm charges a $35.18 monthly fee to each household to collect, recycle and compost its trash. It receives funding from the city of San Francisco to dispose of 80% of landfill waste generated in the area and sells fertilizer obtained from food waste to local farms. Wiithaa is a French firm that provides consulting services to change the way companies think of garbage and to help minimize waste generation. The circular economy provides opportunities to secure new revenue streams: besides mail delivery services, one of Wiithaa’s customers successfully started providing a collect-and-dispose service of paper waste.

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The European Commission too has approved an action plan to “close the loop” of product lifecycles through more efficient material use and recycling. European countries are implementing the EU’s directives, starting from food waste generated in supermarkets. About 100 million tons of food are thrown away every year in Europe, with about 40% of it occurring at the retail level. However, most of this waste is made of perfectly edible food: sometimes it’s a mislabeled item, sometimes it’s a product near expiration date, other times it’s excess food.

France introduced a bill banning supermarkets exceeding a space of 400 square feet from throwing away and spoiling unsold food; they are now required to sign agreements with charities to donate it, so food banks will be able to significantly improve the quality of food they provide. Italy has recently approved a similar law, but instead of fining retail stores, the legislator introduced fiscal incentives for donating unsold food. In Denmark, a new grocery store has recently opened, selling products that are unfit for regular stores. It doesn’t target exclusively low-income clients, but general customers. This way, the stigma of shopping in social supermarkets is minimized. Health benefits from this initiative are undeniable: more people will be able to afford a balanced diet, improving their quality of life. But it is also a first step towards a much welcome cultural shift into the direction of a more conscious use of resources. If we want to stop wasting and polluting, we have to start somewhere – and everybody has to participate.

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