How this transition is positively changing a range of Australian industries
With the linear economic model becoming increasingly unsustainable, there has been a rise in the global uptake in governments and businesses adopting circular economy practices as a potential solution to the challenges of climate change and waste.
European nations have been leading the way with high levels of reform and innovation in implementing circular economic sectors as part of the overall EU industrial strategy. The Australian Government is now following suit, with policy at both state and national levels focusing primarily on waste and recycling programs as opposed to a necessary full cycle overhaul.
Australian businesses are also increasingly enthusiastic about taking matters into their own hands, and circular transition is already underway in many organisations. In general, there has been an increase in low-waste, high-resource-efficiency activity predicted to come over the next 10 years. Unsurprisingly, a report conducted in 2021 by The Australian Circular Economy Hub, showed that 88% of Australian business decision makers surveyed, supported the need for Australia to transition from the old economic model to a holistic, circular mode of operation.
These promising statistics are indicative of the positive changes permeating most business sectors across Australia. Even the most established industries in Australia are embracing change, like mining and oil & gas and motor vehicles, which are sectors increasingly involved in reusing and repurposing excess or decommissioned assets and materials.
Circular economies offer a better future
The move towards a functional full circular economy is undoubtedly in our best interest, but it does necessitate a huge amount of effort and resources. While the take-make-waste model of the linear economy sees us a large amount of unnecessary waste of both produce and machinery, a circular economy can negate the creation of waste before it is created.
This change can be achieved through a solutions-based framework that tackles environmental challenges and advocates for the environment throughout the production process. Some of the ways this can be done is by keeping products in circulation through re-use, repair and repurposing. Where this is not possible, it’s essential to circularity to engage in asset disposal that is conducted with sustainability in mind.
The simple act of gradually reducing waste by keeping materials in circulation means that less time, money, resources and land are spent on disposal. This can positively impact areas such as the agricultural sector, who rely on acquiring assets that are affordable and nationally-located. For Australian sectors such as agriculture, a circular economy can be adopted through both asset and product waste, wherein repurposing or regenerating materials only further benefits the health and business practice of the industry.
During periods like the previous two years, in which COVID-19 stopped the introduction of newly created international assets, Australians came to rely on repurposing the smaller pool of nationally-located resources at our disposal. Without the access to ordering new products with ease, it became apparent that many Australian assets were being disposed of prematurely, and were more than able to be repurposed for a second life.
Better for profits
The transition to a full circular economic model provides an enormous economic opportunity. Certainly, the core purpose of the circular model is a reduction in environmental impact to comply with emissions targets and address climate change. However, the World Economic Forum estimates the circular economy could yield up to $4.5 trillion in economic benefits globally by 2030.
The move to a circular economy based on regeneration and restoration would see an extension of valuable products and provide a catalyst for a more competitive economy, beyond the obvious environmental benefits. A recent report commissioned by the CSIRO by KPMG articulated a case for the long-term economic benefits to Australia in adopting a circular economy in the food and transport sectors. Changing to this model could present an enormous economic advantage, to the tune of $23B in present value GDP by 2025.
Further modeling by PricewaterhouseCoopers (Australia) suggests that a transition to a circular economy could not only reduce the strain on finite resources and save 165 million tonnes of CO2 per year by 2040, but generate a staggering $1,860 billion in direct economic benefits over a 20 year period by reducing waste, implementing greater efficiency in the built environment, improving the security of the supply of raw materials, increasing competitiveness and creating employment.