A new economic paradigm which is regenerative by design
The transition to a low-carbon, circular economy is both necessary and inevitable. A systems’ approach or metabolic analysis tells us where the opportunities are, and confirm that the many inspiring examples out there, still only show a glimpse of what is actually possible.
Since 67% of global greenhouse gas emissions are related to material management, resource efficiency and low-carbon development should be looked at in parallel. Reducing the material footprint of an industrial cluster or jurisdiction, will reduce emissions all the way down the relevant value chains, to reach even the fields, forests, wells and mines from which our raw materials originate.
This requires a systems’ approach where all flows, conversions and stocks of materials and energy are analysed. Rather than looking at the individual elements of a linear “take-make-waste” supply chain, it focusses on the possible interactions between the elements in a system, as well as the interaction of the system with its surroundings.
Emissions embodied in international trade represent over 30% of the greenhouse gas footprint of countries. While this emphasises the importance of international cooperation on climate action, it also exemplifies that reporting on territorial or on-site emissions only reveal part of the mitigation leverage of a government or company. Defining influence or responsibilities to go beyond factory gates or national borders, enables us to formulate a development perspective that targets the system as well as its individual elements.
Circular economy offers a promising set of strategies to redefine development through the lens of metabolic efficiency. Data visualisation is an important means to support stakeholders with understanding the metabolism of their organisation or jurisdiction, set priorities and see the circular economy opportunities for low-carbon development, which are still too often overlooked. In addition to decarbonising our energy system, this includes the substitution of carbon intensive materials, improvement of resource efficiency and making better use of existing assets.
To support small start-ups to large utilities and industries in developing countries, I have identified, analysed and developed mitigation options across various sectors and countries. On the back of this, I published articles on the mitigation potential of circular economy strategies, the just allocation of climate finance, the merits of moving taxes away from labour onto the extraction of resources (ex tax) and the need to abolish fossil fuel subsidies.
I have always worked both on project and policy development. My project-level experience includes risk assessments of carbon portfolios and developing emission reduction offset projects. By order of large buyers of carbon credits, I have analysed biogas, biomass and solar projects, wind farms, hydropower plants, coal mine methane and waste water treatment projects, mainly in Eastern and Central Europe, Asia and Africa. Next to supporting the private sector, I have worked with governments on policy reform to incentivise what we want more off, and discourage what causes harm or compromises our long-term development perspective.
Before founding Shifting Paradigms, I worked with Climate Focus to support international cooperation on low-carbon development. Before that, I managed the emission offset portfolio of the Dutch government in Russia, Ukraine and Bulgaria.
I am grateful to be backed by the skilled and passionate individuals from the partner organisations that I enjoy working with. Without them, it would be impossible to operate in such a broad range of sectors and geographies.
Thomas Kuhn described a fundamental change in the basic concepts and experimental practices of a scientific discipline as a paradigm shift. The paradigm is what members of a scientific community have in common as their set of shared values and practices. It is the lens through which they look at the world. That lens starts cracking, if the shortcomings of the paradigm is challenged by too many contradicting insights or anomalies. Eventually the paradigm will be replaced. An often-quoted example is how the special relativity from Albert Einstein challenged, and eventually replaced, the Newtonian mechanics, which had been used for decades to describe force and motion.
In a linear economic model, we extract resources, use them for products or as a source of energy and then dispose them. This model has dominated production and consumption since the industrial revolution. It relied on cheap access to resource and energy, and has turned many services into tangible products which can be widely distributed and sold.
This model, and its mechanic system of linear interaction is challenged by its own shortcomings and by an emerging organic or circular economic system. Around 20% of the 84 billion tonnes of materials which we extract annually are fossil fuels. Their combustion causes climate change. Also the extraction and disposal of the remaining biomass, metals and minerals is immediately linked to a range of environmental issues. While available material reserves are rapidly depleted, their scarcity makes commodity prices increasingly volatile.
The new paradigm is one where material use is circular, free of waste, and regenerative by design. Investments in renewable energy have already outpaced those in the fossil fuel industry, and the emergence of disruptively successful business models based on revolutionary efficiency gains in the use of assets, energy and materials, shows that the paradigm is shifting.