Green
The Circular Economy: Redesigning our Planet’s Future
Think about the last item you threw away. Did you consider where that product ended up, once you threw it away?
The Earth’s growing waste problem can be traced back to a culture that treats virtually every item we buy and own as disposable. Rapid urbanisation, population growth, and industrialisation are key contributors to the burgeoning volumes of waste that humans are producing each year.
But what if there was away to get around that?
Introducing the Circular Economy
Today’s post from BlackRock highlights the key benefits of adopting a circular economy, and examines the factors that will make the biggest impact in the years to come.
A Culture of Consumption
Mass production is making products cheaper, more readily available, and more readily disposable, bringing levels of material comfort unimaginable to previous generations.
Companies are making new products at a frenetic pace to keep up with global demand─consuming finite resources as if the Earth had an infinite supply.
The intense effects of this mass consumption are visible across multiple industries:
- Construction: Construction waste alone is expected to reach 2.2 billion tonnes annually by 2025.
- Fast Fashion: Roughly 87% of clothing is discarded or burned each year, costing US$100 billion.
- Plastics: Over 95% of plastic packaging value is wasted every year, costing up to US$120 billion.
As natural resources decline and waste continues to pile up, our society is at a crossroads.
A Tale of Two Economies
Today, most of the world follows the Take-Make-Waste practices of the linear economy, with little regard for future use of these resources and products. Unfortunately, most of this ends up in landfills─by 2050, we could be producing 3.4 billion tonnes of waste each year.
The circular economy, by contrast, is focused on redesigning our systems, processes, and products to enable goods to be used longer, repurposed, or recycled more efficiently.
The circular economy is a major transformational force that will last decades…investors are increasingly considering sustainability factors when making investment decisions.
—BlackRock
Companies and governments that choose to adopt a circular economic model could end up saving €600 billion (US$663 billion) annually─and potentially add €1.8 trillion (US$2 trillion) in additional benefits to Europe’s overall economy.
Designing a Better Future
Three major factors are driving the gradual, global shift to a circular economy.
- Economic
Companies will need to switch from wasteful to sustainable practices, and many are taking steps towards a better future. The New Plastics Economy Global Commitment was signed in 2018 by over 400 organisations to eliminate plastic waste and pollution.
- Regulatory
Regulations such as bans on single-use plastics and international waste imports are growing more stringent, and some governments are also offering tax incentives for corporations that follow sustainable practices.
- Society
More consumers are actively researching and questioning the impacts of the products they buy, and consumer demand is showing a preference for reusable products and practices.
While few public companies today are actively using a circular economy, several major brands are leading the way in sustainable business practices.
- Philips: Light-as-a-service that provides access to lighting rather than ownership of lightbulbs
- Levi Strauss: Repurposing old garments into building insulation, upholstery, and new clothing
- Toshiba: First multi-function printer, heat-sensitive erasable toner can do up to five reprints per page
- Renault: Revamped old vehicle drive trains, engines, and gearboxes to almost-new condition
Companies and governments in the circular economy have a structural advantage to solve some of the world’s biggest economic issues ─ giving them a strong, long-term market for goods and services, the potential to lower costs, and open profitable new business streams.
Lasting Impact on People, Planet, and Profit
In order for the circular economic model to achieve widespread adoption, both sustainable investment and partnerships across sectors are needed.
This rally for change is making an impact on financial markets─sustainable investments around the world grew from US$13.3 trillion in 2012 to US$30.7 trillion in 2018.
Healthy economies rely on a healthy environment, and building a circular economy is integral to the future health of our economy, planet, and society.
Environment
How Carbon Dioxide Removal is Critical to a Net-Zero Future
Here’s how carbon dioxide removal methods could help us meet net-zero targets and and stabilize the climate.
How Carbon Dioxide Removal is Critical to a Net-Zero Future
Meeting the Paris Agreement temperature goals and avoiding the worst consequences of a warming world requires first and foremost emission reductions, but also the ongoing direct removal of CO2 from the atmosphere.
We’ve partnered with Carbon Streaming to take a deep look at carbon dioxide removal methods, and the role that they could play in a net-zero future.
What is Carbon Dioxide Removal?
Carbon Dioxide Removal, or CDR, is the direct removal of CO2 from the atmosphere and its durable storage in geological, terrestrial, or ocean reservoirs, or in products.
And according to the UN Environment Programme, all least-cost pathways to net zero that are consistent with the Paris Agreement have some role for CDR. In a 1.5°C scenario, in addition to emissions reductions, CDR will need to pull an estimated 3.8 GtCO2e p.a. out of the atmosphere by 2035 and 9.2 GtCO2e p.a. by 2050.
The ‘net’ in net zero is an important quantifier here, because there will be some sectors that can’t decarbonize, especially in the near term. This includes things like shipping and concrete production, where there are limited commercially viable alternatives to fossil fuels.
Not All CDR is Created Equal
There are a whole host of proposed ways for removing CO2 from the atmosphere at scale, which can be divided into land-based and novel methods, and each with their own pros and cons.
Land-based methods, like afforestation and reforestation and soil carbon sequestration, tend to be the cheapest options, but don’t tend to store the carbon for very long—just decades to centuries.
In fact, afforestation and reforestation—basically planting lots of trees—is already being done around the world and in 2020, was responsible for removing around 2 GtCO2e. And while it is tempting to think that we can plant our way out of climate change, think that the U.S. would need to plant a forest the size of New Mexico every year to cancel out their emissions.
On the other hand, novel methods like enhanced weathering and direct air carbon capture and storage, because they store carbon in minerals and geological reservoirs, can keep carbon sequestered for tens of thousand years or longer. The trade off is that these methods can be very expensive—between $100-500 and north of $800 per metric ton.
CDR Has a Critical Role to Play
In the end, there is no silver bullet, and given that 2023 was the hottest year on record—1.45°C above pre-industrial levels—it’s likely that many different CDR methods will end up playing a part, depending on local circumstances.
And not just in the drive to net zero, but also in the years after 2050, as we begin to stabilize global average temperatures and gradually return them to pre-industrial norms.
Carbon Streaming uses carbon credit streams to finance CDR projects, such as reforestation and biochar, to accelerate a net-zero future.
Learn more about Carbon Streaming’s CDR projects.
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