Septembre 2015 – n°38

Laurent Ulmann, Editor-in-chief, The European Files

Circular Economy in Europe

Towards a new economic model

The concern over Europe’s primary resource dependency is not new. Coupled with a growing awareness of our environmental impact and energy addiction, it comes as no surprise that the European Commission and Parliament are set to present a more ambitious policy package to create a “Resource Efficient Europe” by the end of 2015. The solution proposed is nothing short of a strict evolution of our current “linear economy” into a more resilient Circular Economy.
The limitations of our planet’s resources and the scaled effects of innovation cannot sustain our current consumer culture. Poor waste management and inefficient business practices hold down our ability to grow our economic added value. There is a great gap between our economic and environmental well-being. In response, international research organizations and foundations, such as the Ellen MacArthur Foundation, have formalized an economic model that produces no material waste. At a time where economic policymakers seem to lack the resources and clarity to pass ambitious growth packages, this evolution thrusts an originally environmentally driven concept into the main arena of European legislation.
The unique processes of this economic model require a paradigm shift in our way of doing business. In concrete terms, businesses would need to think circular at design stage to create products in line with the Ecodesign approach, taking the entire lifecycle of the product into consideration, in order to support waste prevention as well as products’ re-use and recycling. In addition, the coordination of actors involved in waste management must be clear and strict. These guiding principles should transcend all facets of the economy. In this issue of The European Files, we present to policymakers and industry specialists the potential and practicality of a new economic model for a more sustainable Europe.
Across the globe, improving waste management to foster recycling remains a priority. Consumer waste at the local level is a challenge and a cost, just as certain industrial and commercial waste presents a greater danger to the environment as a whole. In Europe, statistics demonstrate great differences between Member States, some of them performing well while others are still lagging with very low recycling rates and a majority of their wastes being landfilled.
Specialists and policymakers alike agree that communication between institutions and service-providers is key in taking advantage of the waste streams generated by consumers. Europe must take the lead and drive the change towards a society that sees waste as a resource, not a burden. The European Union must in particular clarify the definition of waste for an efficient and streamlined treatment process. This includes engaging with the large amount electronic waste we produce as a great potential source of valuable raw materials as well as the highly intrusive plastic waste disseminated across the continent and seas presenting a grave danger to our food stock. Aligning the policy package for a Circular Economy with all of these issues reiterates the forward-thinking approach communicated by the European Commission and Parliament.
Policymakers at all levels are fully aware of the circulating reports about this new economic model. The advantages of this great step forward outnumber by far the disadvantages sticking to the linear model we mostly use today. It is known that the fastest growing and most resilient companies are those that function in a Circular model. There is also strong evidence, explored in this issue, that this evolution, if applied throughout the economy, will provide new boosts in employment and GDP. Small and big firms as well as NGOs are subject to this change, but it is up to the legislators to ensure that the legal framework and economic incentives facilitate the transition. Finally, the strongest arguments for this new model explore the many opportunities created exclusively within this new paradigm, pioneering concepts such as a sharing economy where capital is productive one hundred percent of the time. Similarly, regional actions, such as Flanders’ excellent record in waste management, and national ones, such as Luxembourg’s economic initiatives, provide a variety of applied and successful practices inspired by the Circular Economic model.
This issue of The European Files encourages the EU to take a comprehensive approach and engage each sector of the economy as an opportunity for growth under this new economic model. Without a confident legislative driver, the environmental conditions ahead will only exacerbate our current economic and social situation.