What is the circular economy and how can the IT industry adopt it?

As the UN’s 2030 deadline for change fast approaches, we explore what role the circular economy has to play in mitigating the impacts of climate change and how the technology industry can learn from it

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The circular economy is an economic model that was first proposed in the mid 1960’s as a means of ensuring that resources which enter the economy are able to remain a part of it for as long as possible.

It is a popular idea amongst environmentalists and champions of sustainability as it places an emphasis on designing out waste and pollution, thus keeping products in use for longer and facilitating the regeneration of natural systems. Now, as the world faces an imminient climate crisis, the IT and technology industries are starting to sit up and notice.

At the 2019 CIO summit, Mattie Yeta, government sustainable ICT lead at the Department for Environment, Food and Rural Affairs (DEFRA) defined the circular economy as: “An economic model that aims to eliminate waste by reusing, repairing, remanufacturing, refurbishing assets and devices, thus keeping them longer in the circle and in the loop.”

How does the circular economy work?

Currently, we exist in what’s known as a linear economy where we take resources, use them to make something and then dispose of it when we’re done. We produce around 50 million tonnes of e-waste every year, 80 percent of which ends up in an unknown location. Countries around the world that used to take our ICT waste are no longer accepting it and recently the UN has been very clear that countries need to get a clear handle on how to deal with e-waste.

Furthermore, natural resources are finite and when we junk electrical items such as mobile phones, white goods and other technological devices, it releases toxic waste into the atmosphere. Most of the component parts are not bio-degradable, meaning they sit on top of the earth rather than being broken down and absorbed back into the ecosystem.

Biological ecosystems already operate on a cyclical basis and experts believe that humanity needs to adopt this same approach in order to reduce the impact our current throw-away culture is having on the environment. We need to operate in an economy that prioritises the principles of ‘reduce, reuse and recycle’ rather than ‘take, make and dispose.’

Yeta explained that urban mining is a concept that sits within the circular economy, offering an environmentally friendly way of extracting precious metals and minerals out of technological devices.

“[Around] 50 to 60 percent of the world's tungsten is found in our devices,” she said. “26 percent of the world's tin is found in our laptops and our devices and 9 percent of the world's gold is in them. To put that into perspective, we could extract seven to nine grams of gold from an IC chip of a laptop.”

Elsewhere, recycling is already being championed by a number of technology companies looking to repurpose valuable metals and other elements from electronic devices that are no longer fit for purpose, using them to build new products.  

The professional services company Network 2 Supplies (N2S) provides an IT recycling and bioleaching service. These circular solutions reduce the amount of e-waste and prolongs the life of vital materials and technology, all in an environmentally friendly way.

Similarly, HPE offers a hardware return and recycling programme to Hewlett Packard Enterprise Partners and business customers. The programme says it gives IT hardware, such as servers, storage and networking products, a new lease on life, reducing environmental impacts from disposal.

What are the challenges with transitioning to the circular economy?

While the circular economy seems like it could provide a much-needed solution to help humanity in the battle against climate change, its wholesale adoption isn’t something which can happen overnight.

One of the key adoption challenges is that for the circular economy to have a significant impact, it’s not enough for just one or two companies to change how they manufacture one product. Every organisation that forms our infrastructure and economy needs to embrace this new way of doing business – a mammoth task that is looking increasingly out of reach.

Tiffen Dano-Kwan, CMO at SAP Ariba and Fieldglass says that changing consumption habits is incredibly difficult.

“It is really hard to go and change people's poor habits,” she explains. “You have to go back to education, you have to go back to the younger generations and train them from the get go. But retraining people on habits takes a long time, it's really difficult.”

Additionally, growth is driven by consumer demand which means that governments are often wary about over-legislating issues that fall outside of pre-existing standards. As a result, Dano-Kwan believes that if manufacturers self-pledged to embrace a production model based on the circular economy then we would have a chance of changing consumer habits.

“If the production model is based on the circular economy, then you only produce what you know you can recycle… It works on planet Earth in the ecosystem. Everything goes back to us, everything goes back to the soil. So, if our production strategy on a larger scale is based on that fundamental process, I think we’d have a way of significantly impacting the way people consume in a good way.”

Another barrier to adoption is that one of the fundamental principles of the model is reduction by design. Materials can’t be reused and recycled if its impossible to extract them from devices that have stopped functioning. This means that, in a circular economy, technology would be designed with the end goal of disassembly and regeneration from the outset.

Take Apple’s wildly popular AirPods for example. AirPods contain tungsten, tin, tantalum, lithium, and cobalt in an unopenable plastic shell and have a lifespan of about 18 months. Like most Apple products, they’re not designed to be repaired and the lithium-ion battery contained within them makes them a fire hazard in landfill sites. Apple have since pointed out that an AirPod recycling programme does exist, but, while it is possible to extract cobalt from the battery, the value of what can be recycled is unlikely to cover the cost of recovering it.

However, even if products have been designed and produced to be recyclable, there is still a lack of facilities currently in place to support their reintroduction into the circular economy model. Whilst most countries have centres set up to enable its citizens to recycle materials such as paper, plastic, glass and tin, there are relatively few recycling plants currently in existence that can manage the recycling and disassembly of electronic devices. Other materials we use, such as polymers, don’t currently have a safe and effective way of being broken down or recycled.

How can the circular economy help us to tackle climate change?

Currently, attempts to de-carbonise the planet have largely focused on how we can transition towards using renewable energy to sustain the world without the need for fossil fuels. While wide-spread adoption of renewable energy is important, a report from the Ellen McArthur foundation estimates that these measures can only address 55 percent of our emissions.

The remaining 45 percent of our global carbon footprint comes from producing the cars, clothes, food, and other products we use every day and can only be tackled through the adoption of the circular economy. The report goes on to explains how applying circular economy strategies to the manufacturing processes of cement, aluminium, steel, plastics and food can eliminate almost half of the remaining emissions from the production of goods.

The circular economy also has the potential to increase the planet’s resilience to the physical effects of climate change. Businesses will be able to reduce their economic reliance on certain materials that could otherwise be vulnerable to extinction if they are put back into the ecosystem through a cyclical model.

Copyright © 2019 IDG Communications, Inc.

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