Circular Economy & Systems Thinking

The Circular Economy is an economic master plan recommending ingenious ways of modifying the perennial and prevailing linear consumption system into a circular one. The nascent Circular Economy and Systems Thinking is the new approach to attaining sustainable development. This ensures that people have continuous resources such as energy, water, food, and health whilst maintaining the ability of future generations to achieve their basic requirements (Raworth, 2012; U.N., 1987). Unfortunately, the present system is antithetical to businesses, people, or the environment, as it consists of resources extracted from the ground to make products beyond what is required, after which consumers dispose of what they no longer need or desire, discarded into landfills. Consequently, we must explore how a nexus between Circular Economy and Systems Thinking may provide the basis for a paradigm shift from a linear economy to a circular one.

Issues. High-performing waste and recycling systems dealing with recovered, reused, and recycled materials can mitigate the amount of waste disposed to landfill and enhance significant economic opportunities for the Western Australian (W.A.) community. Presently, WA has the nation’s highest rate of waste generation per capita and the lowest rate of resource recovery (Western Australia’s Waste Strategy [WAWS], 2020). According to the Australian Bureau of Statistics (2014), the annual contribution of the waste sector is over $10 billion, whilst losing materials to landfills over hundreds of millions of dollars.

For instance, in 2016-17, Western Australians generated 1782 kg per person (Waste Authority Annual Report 2018-19, 2019) and over 1000kg more waste per person when compared to Belgium, which generated 410 kg per person, with 633 kg per person in Germany and 462 kg per person in Spain (Eurostat, 2019). The contrast between W.A. and Europe on waste generation is quite broad, and to taper the gap, W.A. politicians, local governments, businesses, and individual householders need to embrace new policies. Therefore, if adequate and appropriate policies combined with Systems Thinking are not implemented, it could lead to a dystopian future. This will include Systems Thinking, the implementation of a waste hierarchy, the avoidance of waste generation, the maximisation of waste recovery, and the protection of the environment from the impacts of disposal.

Inherently, a circular economy offers opportunities for recycling local activity in job creation and energy conservation by not producing new products alleviating unnecessary transportation. The concept of the circular economy is derived from a dyad of a production and consumption system with minimal losses of materials and energy through extensive reuse, recycling, and recovery (European Environment Agency, 2014). However, the journey into the circular economy is challenging and strenuous but potentially achievable. Unfortunately, there is a hefty gap between W.A.’s current performance and the desired performance, but W.A. decreased their amount of waste from 2659 kg in 2014 to 1782 kg in 2017. However, this still needs to be more remote than Europe and global indicators.

It will be essential to establish how W.A. may acquire knowledge and expertise from Europe, considering the latter’s successful adaptation to waste management policy whilst simultaneously becoming one of the lowest waste generation continents in the world. Further, an exploration of how Germany’s waste recovery system is one of the highest in the world. Therefore, can Systems Thinking provide a driving force for a quantum leap from a linear economy to a circular one, and appropriate knowledge and enabling infrastructure to assist in removing barriers to behavioural change.

Impact. The global economy annually yields over one billion tons of solid waste, made principally of paper, plastics, metals, organics, and other by-products. A circular economy suggests complex system operations (such as product-service systems, remanufacturing, and repair) for an industrial economy that is restorative and relies on renewable energy (Ellen MacArthur Foundation [EMF], 2014). Ultimately, this disposed economy doctrine of “take-make-waste”, also known as the linear economy, has to be revamped and redesigned. It’s now imperative to think about the world in new ways. Many societal, business, and environmental fundamentals have altered, and professional designers in numerous fields still need to predict and design out the adverse effects of their products. These harmful side effects can no longer be accepted if we are to survive in the future. Further, we can no longer assume that things are working like simple machines and continue to think that the “take-make-waste” doctrine is adequate. As we live in a time of complex systems, we have to endure the vicissitudes of these systems. Therefore, Systems Thinking is an analysis that concentrates on discerning how the parts of a system interact to produce the overall behaviour.

Systems Thinking. New techniques must be designed to stop the surging problems of artificial world participation in decision-making, which could provide a necessary reorientation. For example, millions of phones are thrown away every year because they are not built to last. Therefore, the design is critical to the first principle of the circular economy: design out waste and pollution. When something is designed, important decisions are made that impact how the materials are chosen, which are safe and circular, how it is produced, how they are consumed, and what happens when they are no longer required (EMF, 2017). In other words, a systems thinker perceives the relationships between the elements, unravels the association of elements, and holistically analyses the whole system, ensuring that the products and services produced fit within the circular economy and do not go back to landfills. This requires a paradigm shift in mindset from linear to circular, and it is achieved through myriad ways such as Systems Thinking, designing, and optimising products to eliminate waste by promoting efficient reuse, disassembly, and refurbishment.

Several players have identified viable business prospects to achieve more circular material loops in manufacturing and production and describe how possible recovery routes could be defined. Notably, a circular economy builds on long-standing sustainability concepts, including product life cycle, Systems Thinking, and resource efficiency, most predominantly sustains materials and energy circulating in the economy for as long as possible (WAWS, 2020). They also discuss how designers and manufacturers can enhance shifting towards a more circular production model. Furthermore, this would improve maximum efficiencies (material, economic, and environmental) by collectively managing and sharing the activities among players within the product value chain. In fact, according to the World Bank, by 2025, global waste generation is assumed to increase by an additional 70%, propelled in large part by growing populations, rising median incomes, and the accelerating pace of urbanisation.

Potential. It is estimated that the circular economy could generate US$1 trillion in cost savings on materials by 2025. Companies should continuously strive to transform waste products and processes into improving their bottom line. The fusion of steady utilisation of rising patterns and declining natural resources has forced companies to reconcile by selling more products with fewer source materials. For example, General Motors earns $1 billion annually from recycling and reusing what would otherwise be scrapped or discarded. Coca-Cola saves $90 million yearly through its reduced-weight bottles. In achieving such an aim, three dominant obstacles to implementing effective waste management initiatives should be eliminated: namely, –the lack of a starting point, the lack of innovative ideas, and the lack of top-down leadership. Correspondingly, research from the EMF and the McKinsey Center for Business estimates that if the economy adapted to a circular economy, it could mitigate consumption of new materials by up to 32% within 15 years and more than 50% by 2050.

Overall. The potential benefits of shifting to a circular economy extend beyond the economy and into the natural environment. By designing out waste and pollution, keeping products and materials in use, and regenerating rather than degrading natural systems, the Circular Economy epitomises a decisive contribution to achieving global climate targets. Implementing what the Europeans are doing on waste reduction while concurrently promoting a high waste recovery is vital. W.A. legislation needs to implement this system to meet the United Nations 2030 targets. Therefore, WA politicians should align their political agenda with these principles. Additionally, businesses should foster Systems Thinking in their designing and manufacturing process for an effective circular economy, enhancing their bottom line. It is vital that companies remain motivated and refrain from being mired in traditional ways of Systems Thinking and the Circular Economy. These factors are intrinsically linked to achieving organisational success. Finally, the Circular Economy represents a continuous learning journey and model for countries committed to a sustainable environment for businesses and communities.