A Circular Economy in Alaska

The circular economy is an approach that takes insights from living systems. It considers that our systems should work like organisms, processing nutrients that can be fed back into the cycle — whether biological or technical — hence the "closed loop" or "regenerative" terms usually associated with it. Why do we need a circular economy? Updating Aldo Leopold's "standard paradox of the twentieth century," which he wrote about in 1938, Giulio Boccaletti succinctly describes the problem we face today essentially unchanged:

Despite the dramatic increase in cognitive and labor productivity, we have not fundamentally changed our relationship to Earth: we are still stripping it of its resources to manufacture goods that turn to waste relatively quickly, with essentially zero end-of-life value to us. A linear economy on a finite planet, with seven billion people aspiring to become consumers—our relationship to the planet is arguably more productive, but not much more intelligent than it was a hundred years ago.

Walter Stahel wrote an article for Nature about how to construct a circular economy, in which he offered valuable policy suggestions, including rewarding the internalization of external costs, and proposes that "stewardship should overrule ownership and its right to destroy." A few technical obstacles were also addressed: "To close the recovery loop we will need new technologies to de-polymerize, de-alloy, de-laminate, de-vulcanize and de-coat materials." In a closed-loop circular economy, one of the goals is to recycle atoms, something we already do for metals. We are all familiar with recycling, but recycling is just the 'outer circle' of the circular economy, requiring more energy input than the 'inner circles' of repair, reuse and remanufacture. This highlights another goal of the circular economy - it's not just about designing for better end-of-life recovery, but also minimizing energy use. As Chris Anderson said, "This notion of closing the loop everywhere is perhaps the biggest endeavor of our age." In fact, it may be possible to view all work as attempting to "close the loop." Ken Webster elaborates on this by describing how the digital revolution* helped enable the circular economy:

The circular economy is built on a feedback-rich systems perspective. This perspective was born out of computing [though certainly not exclusive to it]. The "circular" in circular economy is a cipher for feedback, for closing the loop, but revealed in the light of the economy being part of an open system — bathed in the energy from the sun — and where decay and disorder are every bit a reality as regeneration and restoration.

The additional materials and energy related feedback loops illustrated so often in the circular economy “butterfly” diagram can be seen as a reflection of the possibilities emerging from this digital revolution. The feedback loops have long existed, yet before the digital revolution, they were relatively underdeveloped in a modern economy, swamped by throughput (the amount of material or items passing through a system or process). These loops are now revitalized, perhaps even transformed (or they will be!) The potential for business models around products of service, the sharing economy, product life extension and reuse, repair and reverse supply chains lies with what digital feedback does to disrupt the old relationships. Perhaps this mix of convergent technologies with an associated worldview is some sort of sign of a renaissance for our times.

As Michael Liebreich says, we will be able to find value where it did not exist before. This is a crucial concern for Alaska as we face an inevitable economic transition. We can learn from the World Circular Economy Forum held in Finland this month. From the description: "This ground-breaking event presents the world’s best circular economy solutions and gathers together the most recognized experts and decision makers in the field. 1,500 key people from more than 100 countries shared ideas in Helsinki, Finland, on 5-7 June 2017, at the first ever World Circular Economy Forum." Other innovators and thinkers have described the transition to a circular economy as one full of new possibilities:

"Like all major transitions in human history, the shift from a linear to a circular economy will be a tumultuous one. It will feature pioneers and naysayers, victories and setbacks. But, if businesses, governments, and consumers each do their part, the evolution of innovative business models and closed-loop concepts like remanufacturing, refurbishing and parts harvesting, will put the global economy on a path of sustainable growth. Many years from now, people will look back on it as a revolution." - Frans van Houten, CEO, Royal Philips

"Materials and components within a circular economy are designed for cycling through the economy many times, creating both new value opportunities and an eradication of waste (or system losses). Partnering this with the adoption of renewable energy generation produces a more robust and resilient operating model. Remanufacturing and refurbishment are in themselves not new concepts, but they have the potential to be game changing when deployed in conjunction with new business models, often enabled by information technologies." - Jamie Butterworth

“Human beings don’t have a pollution problem; they have a design problem. If humans were to devise products, tools, furniture, homes, factories, and cities more intelligently from the start, they wouldn’t even need to think in terms of waste, or contamination, or scarcity. Good design would allow for abundance, endless reuse, and pleasure.” - Michael Braungart and William McDonough

"If a CE is accepted as a theoretical ideal, it can be used as a benchmark to measure “progress” on a scale ranging from linear at one end to perfectly circular at the other. This scale must consider the loss of both material quantity and material quality. If such a metric were to be applied to our current industrial system—particularly upstream energy-intensive process industries—we can ask: What is the current degree of circularity? And, how far could we realistically move toward perfect circularity?" - Jonathan Cullen

It is important to determine the current state of circularity so that one can have a benchmark against which to track improvements or see the effect of individual or collective efforts. Loops can be closed through recycling and reuse first. The synergy between design and manufacturing enables products to be disassembled and materials extracted in as clean a state as possible. Then one can include shifting from fossil to renewable energy sources and converting efficiency gains into reducing the overall level of resource consumption. - David Dornfeld

Nicholas Georgescu-Roegen, Herman Daly, Robert Costanza, and other pioneers of ecological economics addressed many of the questions surrounding the interactions between the environment and the economy, and their end goal was much the same: a sustainable system. Georgescu-Roegen was concerned with entropy and biodegradation of the environment due to the economic process. He wrote that the depletion of resources must be as small as feasible, and recommended a bioeconomic program emphasizing such factors as solar energy, organic agriculture, product durability, and international equity. Cutler Cleveland, in an article about biophysical economics, writes:

The increase in entropy from energy use can be compared to the decrease in entropy that results from upgrading the state of materials either from virgin ores or waste residuals to arrive at a physical measure of the efficiency of economic processes. Comparisons of this measure over time provide insight into the ability of technical change—that itself requires materials and energy to take place—to counteract depletion and pollution. An advantage of these measures over traditional economic measures of efficiency is their ability to make judgments that are irrespective of changes in consumer preferences, market forms or other institutional settings that mask the physical reality of production and consumption processes.

We already know living systems are capable of recycling atoms. The question is: Can technical change decrease entropy, trace and collect dispersed materials, upgrade the state of materials in general, and counteract depletion and pollution? This is a central premise of the theoretically ideal functioning of a circular economy, based on the insight that regenerative systems are a fundamental requirement for a sustainable planet with a high quality of life for all of its citizens (both humans and other species). And in fact, tracing and collecting dispersed materials is exactly how direct air capture of carbon dioxide, one of several negative emission technologies to mitigate climate change, is proposed to work.

To be able to trace and collect dispersed materials requires energy, information, and time. In the case of biological systems, that knowledge is embodied in their genetic make-up. In the case of economies, it is present in the capital goods, human capital, institutions and other repositories of knowledge such as computers and libraries. The role of information relative to the other inputs into production processes prompted Boulding to claim that energy itself is unimportant. What is important is the knowledge to make use of material endowments that are present in less desired forms and change their state to more desired ones.

The knowledge to change less desired forms to more desired ones... This is the service our biosphere has excelled at performing for millenia. To be able to mimic those processes would represent a major step toward alleviating the immense burden we have placed on our planet. But how do we acquire and use this knowledge? Ever increasing intersections between the circular economy and emerging technologies are suggesting new possibilities to explore. Moving from extraction to aggregation for many raw materials remains a major technological hurdle, but the impact of robotics on the field of technology applied to disassembly, the impact of software on the reuse and repair market, and the application of deep learning programs to the field of industrial ecology haven't been fully explored. We can match customers with the product or service they need while upholding the values of a circular economy. New businesses will emerge, but most will simply transform the way in which they use energy and materials. Advancements in understanding ecology based on complexity science have caused a shift to viewing sustainability as an emergent property of a complex system. The direction of recent research suggests working with agent based modeling techniques to develop better ecological models of material and energy flows in industrial systems. 

Social Aspects

The historical development of the circular economy umbrella concept was recently traced by Fenna Blomsma and Geraldine Brennan. One of the figures behind the contemporary drive for a circular economy is Ellen MacArthur, who set a world record for the fastest solo circumnavigation of the globe. In an interview she describes how she became involved:

"When I was aboard the boat obviously I took with me a minimum of resources and I managed those resources down to the last drop of everything that I had because in order to stand a chance of breaking that record I had to be light, the boat had to be light. It was a racing boat, it was built out of carbon fibre, it has to be light, it had to be fast. And you manage everything you have on that boat, so you manage the electricity, you manage the voltage in the batteries, you manage your own food, you manage the boat in the weather conditions, you choose the course of the boat. You are totally and utterly connected to everything that is around you. And I developed this overwhelming notion of the definition of the word 'finite', in that in that boat you have what you have and there is no more, and land is 2,500 miles away when I am in the Southern Ocean, probably Perth or Sydney, and you realise that no more means no more. And I had never translated that to life on land."

The emphasis on measurable boundaries within which a circular economy must operate (developed also by Johan Rockström, Kate Raworth, Ted Trainer, among many others) is frequently returned to:

"The only circular economy worth looking at is the perma-circular one. We need a genuinely circular metabolism, and that can only be a self-maintaining circle — one that doesn’t spiral outward but, rather, promises to keep the same circumference for as long as our beautiful planet remains alive in its orbit around the sun." - Christian Arnsperger

Circular flows, not only of energy and resources, but also of wealth and power too: 

"A real circular economy would expand the definition of the circular economy to one where its operating system is regenerative not extractive not only towards nature, but people; one where wealth is equitably circulated and shared. A truly circular economy would mean that the circular ethos is also reflected in our social systems, including our financial services, our business structures, and the political frameworks and cultural norms that influence human behavior." - Sharon Ede

In their article "Coming Full Circle: Why Social and Institutional Dimensions Matter for the Circular Economy," Vincent Moreau, Marlyne Sahakian, Pascal van Griethuysen, and François Vuille develop this line of thought further by showing how insights from the principles of the social and solidarity economy (SSE) can contribute to the development of a circular economy. Paraphrasing in part:

Figure 2. (Moreau and colleagues, 2017)

By placing people above profit, the SSE makes its value system explicit, toward more equitable labor conditions and participative decision making, but also aims toward social well-being and the democratization of the economy overall. In the SSE, for example, societal decisions could be made in terms of what materials should be reduced or reused, or what materials should be recycled as a priority, toward a common good, regardless of economic profitability. Unemployment programs, which strive toward social reinsertion, would entail the state partially covering the cost of labor in certain remanufacturing initiatives, for example. Or, rather than herald in an era of planned obsolescence (London 1932), the SSE could create rules and regulations guaranteeing the longevity and reusability of products, including household items, but also building infrastructure. As illustrated in figure 2, social and solidarity principles fill the gap toward CE opportunities that would otherwise be cost-ineffective.

Rather than distributing pieces of the proverbial pie, an economy based on solidarity would aim toward considering the pie as a shared resource—addressing societal needs, with both current and future generations in mind (Sahakian 2016). Perhaps the most important contributions of SSE to the CE are precisely that of equity, avoiding cost shifting in time and place, and models of collaborative and democratic governance systems, which challenge the profit motive. Moreover, evolving institutional conditions to support more solidarity-based production and consumption systems could lead to more resource-efficient activities, which is one of the core principles of the CE. The SSE is therefore an example, in practice, of how institutional perspectives can lead to more robust CE strategies toward societal and environmental aims.

Although the entropy law remains intransigent, institutional conditions and societal values can be challenged and transformed through political processes, in order to usher in a more equitable and circular economy. Perhaps more than any other economic concept, the CE exemplifies the essential role of institutions in distributing costs among economic agents instead of transferring them onto the environment.

A global awareness has emerged that maintaining the health of our finite planet is the biggest endeavor of our age. Addressing our "throwaway culture," Pope Francis remarked in Laudato Si' “We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them” (para. 22). In contrast to natural ecosystems, which have the capacity to absorb and reuse waste and by-products, benefiting the next inhabitant or species above them, our culture too often causes more harm than good to both humans and non-humans. We must redefine our notion of progress. "A technological and economic development which does not leave in its wake a better world and an integrally higher quality of life cannot be considered progress" (para. 194). It's time to get to work. Let's generate and test theories of how we might do things differently to "close the loop" and internalize external costs in industry, agriculture, and the environment. How far can we realistically move toward a balanced circular economy?

Industrial Ecology:

Figure 7: The emergence of an eco-industrial infrastructure

Those interested in further developing a circular economy within Alaska should look at the research performed within the emerging interdisciplinary field of industrial ecology. Arnold Tukker is a professor of Industrial Ecology at Leiden. In his lecture on 26 February 2016 he said "A circular economy in which all resources are reused is a prerequisite for a sustainable world. As EU president, the Netherlands can give a firm impetus to this economic shift." Industrial ecology is the science of the circular economy. The program description at Leiden University in Netherlands:

The master of science in Industrial Ecology (IE) offers talented students from around the world the opportunity to enhance their expertise and work on current challenges faced by the world today. Industrial Ecology is an emergent scientific discipline that promotes a systemic approach to human problems, integrating technical, environmental and social aspects. It is argued that this approach will show the way to sustainable development. For that reason Industrial Ecology is considered to be the ‘toolbox for sustainable development’ and the ‘science of sustainability.’

Chalmers University in Sweden:

Society faces immense challenges arising from pressure on the environment and the natural resources such as climate change, chemical risks and resource constraints on land, materials and energy. The complexities of these issues including technology development, social change, economic growth and environmental policy have created an increasing demand for knowledge and skills in the field of Industrial Ecology.

Industrial Ecology provides a solution-oriented engineering approach to environmental and sustainability problems. Hence, while it is important for graduates of the programme to have gained a broad understanding of environmental problems in nature, they should become experts in analytical tools that facilitate the suggestion of relevant measures or policies. The programme welcomes students from all fields of engineering as well as other relevant backgrounds including architecture, environmental science, physics and chemistry. [UAF remains strong in the physical sciences, including environmental engineering, and also offers an Occupational Endorsement in Sustainable Energy.]

Graz University in Austria:

IE is an emerging interdisciplinary field, combining natural, technical and social sciences in a systems view at scale levels from the global to the local. Its core concept is the analogy between processes in nature (biosphere) and processes in society (technosphere). Evolution has resulted in a highly efficient use of materials and energy in biosphere systems: waste from one process is a resource for another. In today's society, resources are exploited, producing unusable waste streams and release of pollutants to soil, water, and air, leading to complex sustainability problems. Society might take lessons from the biosphere to solve these problems. The objective of the program is to train students:

•  to conduct IE analyses of such complex sustainability problems,

•  to design IE solutions for these problems and

•  to develop implementation strategies for those solutions identified.

John Ehrenfeld served as the first executive director of the International Society for Industrial Ecology (ISIE) from 2001 to 2009, and is the author of "Sustainability by Design: A Subversive Strategy for Transforming Our Consumer Culture." He describes the field of IE in that book:

Industrial ecology is based on the idea that healthy ecosystems can also serve as a metaphor for sustainable human socioeconomic systems. One of the central themes in this field is the closing of material loops—in other words, recycling most everything we use in the same way materials flow in natural systems. The relevance of this concept to reducing unsustainability has led to recycling systems and networks of firms interchanging wastes and byproducts with others as feedstocks. Such networks, called industrial symbioses, are analogues to natural symbioses, in which the relationship is mutually beneficial to all parties in the network. Symbiosis opposes cooperation to the dominant notion of competition. Even more basic, the metaphor of ecosystem conveys a sense of holism, countering the reductionist, mechanistic sense of the current paradigm.

Ecosystems and cities can both be viewed as incredibly complex data processing systems. What does this mean? If you want to solve high level domain problems (in financial services, life sciences and healthcare, energy, transportation, heavy industry, agriculture, and materials), you have to understand how that data is processed. And to do that takes advanced analytical tools (a combination of fast-expanding data sets, machine learning, and ever-increasing computing power). 

After the fall in oil prices, Alaska has continued to wrestle with the state budget. Looking for a sustainable economic future, many people have called for diversification of our economy. UAF has the Alaska Center for Energy and Power, and UAA has the Institute of Social and Economic Research (ISER), but an Alaska Center for Industrial Ecology would have broader scope and ability to conduct analyses of our current industries, design more sustainable solutions (that may not have been considered yet), and help develop implementation strategies for those solutions identified. But if not an independent research center (where would that funding come from?), then we could certainly do with increased focus on the subject within organizations that already have compatible mission statements.

ISER certainly does: "Helping people understand social and economic systems" and "engaging in basic and applied research." It has a staff of about 35 — including faculty, research associates, support staff, visiting researchers, and student interns. Matthew Berman has a research interest in social-ecological systems and has published on the subject. He (and other staff at ISER) have conducted many industry analyses, the question is how deep and wide the scope of the research has been and what sort of transition the resulting recommendations would effect in the short or long term. So while ISER has produced valuable reports, what is needed is a larger and more comprehensive project with a bolder mission: to address the immense challenges arising from pressure on the environment and the natural resources such as climate change, chemical risks and resource constraints on land, materials and energy, and a plan to do it within the time available. 

There are many economic sectors in Alaska, including petroleum, tourism, fishing, mining, timber, agriculture, military/government, and many others. Within each industry are numerous separate operations. The system wide interactions within and between industries in terms of material and energy flows provide opportunities for improvement for both society and the environment. Transitioning from a petroleum economy to a post-carbon economy requires looking at the web of industries, communities, and corporate entities that grew up around it at the same time. I think we've only begun to explore sustainable industrial symbioses in Alaska. New ones will form as emerging technologies and the relationships they enable continue to disrupt old industry models. We've already seen a recent growth in uses for fisheries by-products. Which industries will be transformed next?

Additional reading:
"Sustainability by Design: A Subversive Strategy for Transforming Our Consumer Culture" by John R. Ehrenfeld. 2008.
"Industrial Ecology and Sustainable Engineering," by Thomas Graedel, 2010.
"A Handbook of Industrial Ecology," by Robert Ayres, 2002.

"Strategies for Manufacturing," by Frosch, R.A.; Gallopoulos, N.E. Scientific American. 261 (3): 144–152. (1989)

"Industrial ecology: An environmental agenda for industry," by Hardin Tibbs, 1993.
"Special Issue: Exploring the Circular Economy." Journal of Industrial Ecology. Volume 21, Issue 3, June 2017.
"How Circular is the Global Economy?: An Assessment of Material Flows, Waste Production, and Recycling in the European Union and the World in 2005," Journal of Industrial Ecology. Volume 19, Issue 5, October 2015.
"Making Sense of Circular Economy: How Practitioners Interpret and Use the Idea of Resource Life-Extension," by Fenna Blomsma, 2016.
"Circular Economy: A Critical Literature Review of Concepts," Polytechnique Montreal, 2015.
"The Economics of the Coming Spaceship Earth," by Kenneth Boulding, 1966.
"Towards perma-circular currencies? Why a regenerative economy calls for new forms of money," by Matthew Slater
"The Optimistic Environmentalist: Progressing towards a greener future," by David Boyd, 2015. (pp. 51-67)
Selected quotes from Laudato Si', Catholic Climate Covenant. (PDF)
"How to bust the biggest myths about the circular economy"
"Liam - An Innovation Story," by Charissa Rujanavech, Joe Lessard, Sarah Chandler, Sean Shannon, Jeffrey Dahmus, Rob Guzzo. September 2016. [Apple is moving toward a closed-loop supply chain, wherein "design of the disassembly process by the manufacturer" is standard.]
Office of Fisheries Development - By-product development
iFixit.org - The right to repair movement
LOPER’s Environmentally-Friendly Shoes Held Together With Rope
Joost de Kluijver's social project - Closing the Loop
Telecom firms back standard phone charger in Europe
This CEO Turned His Side Hustle Into An On-Demand Startup Preserving The Planet
Zero Waste Shops
Systems Ecology 12: Industrial Ecology (video) 

*The digital revolution can also be leveraged to the aid of democratic institutions, per Roy Madron. 

#WCEF2017 #circulareconomy #closingloops #zerowaste #sustainable #resources #systemsthinking

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