the circular industrial economy and the performance economy
TRANSCRIPT
PowerPoint PresentationCCDRC University of Coimbra, 15 Oct
2019
Dr h.c.mult. Walter R. Stahel Full Member of the Club of Rome,
Visiting Professor, Faculty of Engineering, University of Surrey
www.product-life.org, [email protected]
ECONOMY
as
5. April 2019 Copyright Stahel at Napolit 3
Warehouse on wheels,
Logistics- and
Shopping Centers
the quantity and quality of capitals
• natural capital (EU bioeconomy: arable land, water,
forests, animals and plants, biodiversity)
• human capital (labour, skills, expertise) and
intangible human capital (knowledge, wisdom)
• cultural capital (monuments, landscapes, music,
traditions (Kintsugi, golden sewing in Japan))
• manufactured capital, material (objects) and
immaterial (data, embodied resources, liability)
• financial capital (investments, wealth).
Origins of Circularity : Nature;
good husbandry (poverty, scarcity)
use it up,
wear it out,
Circular Economy 1976: economics and innovation to manage stocks of objects locally profitably
remanufacture X X
R
Source: Stahel/Reday, 1976 15 Oct 2019 Stahel at University of Coimbra
CE of objects is affordable, ecologic, social
Circular closed & slow loops,
value of stocks & less CO2 emissions,
utility of objects, less water&energy use
purity of molecules less waste.
15 Oct 2019 Stahel at University of Coimbra 7
objectives resulting in:
materials,
components
15 Oct 2019 Stahel at University of Coimbra 8 Source: Stahel, Walter R. (2019) Circular Economy – a user's guide, Routledge
from end-of-life to
IE
The challenges of a Circular Industrial Economy of manufactured objects and manufactured materials
The era of ‘R : reuse goods
The era of ‘D’: recover molecules
The liability loop
R &
D
maintaining the value and utility of stocks by
extending the service-life of objects through
• Reuse, Repair and Remanufacture with
technological upgrading enables to:
• greatly reduce CO2 emissions and waste,
• create local skilled jobs,
15 Oct 2019 Stahel at University of Coimbra 10
Who
Probably the most reused
objects world-wide
Dirty, contaminated with bacteria and drugs Probably the most reused objects world-wide
bank notes:
the use value of objects and trust,
but
guaranteed by National
Banks or CEB
2016 societal benefits of circular economy in comparison to the present economy (12 countries) Sweden
macro-economic I/O Study by Skanberg-Wijkman 2016.
circular energy material combined
additional + 4%
trade + 0.4% + 0.4% + 0,2% + 0,25%
balance of GDP of GDP of GDP of GDP
http://www.clubofrome.org/wp-content/uploads/2016/03/The- Circular-Economy-and-Benefits-for-Society.pdf
greatly reducing CO2 emissions by 66%
Source: Stahel, Walter 1982
product-life extension creates local jobs and
prevents waste (substituting manpower for energy)
factory factory LABOUR
LABOUR
factory
and social groups:
repair cafés, DIY,
barter trades, eBay,
Reman: substantially reducing resource
consumption, waste, emissions and costs A 2004 sectoral study on restoring used automotive engines compared
to a like-new condition showed, compared to manufacturing new engines, found:
• Lower economic costs (30-53%),
• Lower raw material consumption (26-90%), • Lower waste generation (65-88%), • Lower energy consumption (68-83%), • Lower emissions (50-88%)
• 73-78% less carbon dioxide (CO2), • 48-88% less CO, • 72-85% less NOx, • 71-84% less SOx, • 50-61% less non-methane hydrocarbons emissions.
Source: Smith, VM and Keolian, GA (2004) The value of remanufactured engines, lifecycle environmental and economic perspectives, Journal of Industrial Ecology, 8(1-2) 193-222
15 Oct 2019 Stahel at University of Coimbra
Stocks represent national resource security
Cheap & green:
ICE1 Redesign
In 1995, the 59 trains of German Rail had been in
service for 15 years, covering 15 million km each.
• Redesign costs were € 3 million per train,
versus € 25 million for a similar new train.
• Redesign preserved 80% of resources -
16’500 tons of steel, 1180 tons of copper -
prevented 35’000 tons of CO2 emissions
& 500’000 tons of mining waste per train. The Redesign included a technological upgrading
of the rolling stock, and allowed to add more seats. 15 Oct 2019 Stahel at University of Coimbra 17
Public procurement
em b
o d
ie d
atoms
15 Oct 2019 Stahel at University of Coimbra 18 Source: Stahel, Walter R. (2019) Circular Economy – a user's guide, Routledge,
The Anthropocene,
• nuclear physics: the bomb, energy and health,
• chemistry: plastic, chemicals, pharmaceuticals,
unknown to Nature’s circularity and therefore ask
for a man-made responsibility for waste.
15 Oct 2019 Stahel at University of Coimbra 19
The era of ‘D’, or the legacy from the Anthropocene,
? are waste managers in control ?
maintaining the value and purity of elements (atoms,
molecules), recovering pure molecules through:
• technologies to De-polymerize, De-alloy, De-
laminate, De-vulcanize materials, De-coat objects,
De-construct infrastructure and buildings.
control (“waste managers”) are limited by legislation,
the second law of thermodynamics and missing tools:
• non-mix collection methods, disassembly and non-
destructive maximum-value recovery policies,
• technologies to recover atoms and molecules. 15 Oct 2019 Stahel at University of Coimbra 20
Value not retained in the Swedish materials system
15 Oct 2019 Stahel at University of Coimbra 21
Material value
Alu 3.1 1.2 40 1.2 (- e) high
Plastic 10 0.8
singular research study – no general academic interest?
Research
needed
Policy challenges
to adapt legislation to the ‘new normal’: • full producer liability (as ultimate liable owner),
• sustainable taxation (do not tax labour),
• do not levy VAT on value preservation,
• give carbon credits for CO2 emission prevention,
• introduce ‘backpack’ indicators (measuring
• introduce absolute decoupling indicators
• extend tax depreciation periods,
15 Oct 2019 Stahel at University of Coimbra 22
15 Oct 2019 Stahel at University of Coimbra 23
the era
of ‘R’
the era
of ‘D’
atoms
Source: Stahel, Walter R. (2019) Circular Economy – a user's guide, Routledge
Full Producer Liability
Spreading the knowledge of the CE ? who is in control ?
• scientific, technical and economic knowledge,
• to class- and boardrooms, parliaments,
• to academia & technical training institutions,
new professions (vehicle restorers).
motivation, education and training challenge
15 Oct 2019 Stahel at University of Coimbra 24
the era
of ‘R’
the era
of ‘D’
Source: Stahel, Walter R. (2019)
Circular Economy – a user's guide,
Routledge, London
scientific R&D is in control
Innovative systems solutions and
• circular chemistry (architectured molecules),
15 Oct 2019 Stahel at University of Coimbra 26
15 Oct 2019 Stahel at University of Coimbra 27
Real wealth is based on use, not
ownership Aristotle
exploiting efficiency, sufficiency and
• internalise the liability for all costs of
risk and of waste,
15 Oct 2019 Stahel at University of Coimbra 28
Material stocks represent corporate and
national resource security:
today’s objects
at last year’s resource prices
Ultimately, rent-a-molecule and license-to-
mine strategies may provide social stability
through income stability for mining nations: Andrew J.Hagan et al (2019) The license to mine: Making
resource wealth work for those who need it most. https://www.sciencedirect.com/science/article/abs/pii/S0301420717305445
https://doi.org/10.1016/j.resourpol.2019.101418
15 Oct 2019 Stahel at University of Coimbra 31
Blue Moon diamond
€ 3.75 mio/carat Safran
missing tools to measure sustainability
Performance
ff
Retained
ownership
& liability
OEM
skills
Circular Economy
Toxic
Release
Inventory
sharing
economy
Source: Stahel and Clift (2016) Stocks and Flows in the Performance Economy, Springer
Sharing Economy
Innovation in social system design is needed
Laundromats need to be combined with animation
(dancings, internet cafés) to make them attractive
for single clients; kindergarten playgrounds.
15 Oct 2019 Stahel at University of Coimbra 34
social
innovation
needed
Success through redundancy and resilience,
failure through abuse and vandalism
free float rental cars, bikes and e-scooters
NO SHARING WITHOUT CARING
contract until 2121
Le pont de Millau, France 36 15 Oct 2019 Stahel at University of Coimbra
buying
performance
Dr h.c. Walter R. Stahel, Visiting Professor, University of Surrey
Founder-Director, The Product-Life Institute, Geneva
www.product-life.org, [email protected]
Dr h.c.mult. Walter R. Stahel Full Member of the Club of Rome,
Visiting Professor, Faculty of Engineering, University of Surrey
www.product-life.org, [email protected]
ECONOMY
as
5. April 2019 Copyright Stahel at Napolit 3
Warehouse on wheels,
Logistics- and
Shopping Centers
the quantity and quality of capitals
• natural capital (EU bioeconomy: arable land, water,
forests, animals and plants, biodiversity)
• human capital (labour, skills, expertise) and
intangible human capital (knowledge, wisdom)
• cultural capital (monuments, landscapes, music,
traditions (Kintsugi, golden sewing in Japan))
• manufactured capital, material (objects) and
immaterial (data, embodied resources, liability)
• financial capital (investments, wealth).
Origins of Circularity : Nature;
good husbandry (poverty, scarcity)
use it up,
wear it out,
Circular Economy 1976: economics and innovation to manage stocks of objects locally profitably
remanufacture X X
R
Source: Stahel/Reday, 1976 15 Oct 2019 Stahel at University of Coimbra
CE of objects is affordable, ecologic, social
Circular closed & slow loops,
value of stocks & less CO2 emissions,
utility of objects, less water&energy use
purity of molecules less waste.
15 Oct 2019 Stahel at University of Coimbra 7
objectives resulting in:
materials,
components
15 Oct 2019 Stahel at University of Coimbra 8 Source: Stahel, Walter R. (2019) Circular Economy – a user's guide, Routledge
from end-of-life to
IE
The challenges of a Circular Industrial Economy of manufactured objects and manufactured materials
The era of ‘R : reuse goods
The era of ‘D’: recover molecules
The liability loop
R &
D
maintaining the value and utility of stocks by
extending the service-life of objects through
• Reuse, Repair and Remanufacture with
technological upgrading enables to:
• greatly reduce CO2 emissions and waste,
• create local skilled jobs,
15 Oct 2019 Stahel at University of Coimbra 10
Who
Probably the most reused
objects world-wide
Dirty, contaminated with bacteria and drugs Probably the most reused objects world-wide
bank notes:
the use value of objects and trust,
but
guaranteed by National
Banks or CEB
2016 societal benefits of circular economy in comparison to the present economy (12 countries) Sweden
macro-economic I/O Study by Skanberg-Wijkman 2016.
circular energy material combined
additional + 4%
trade + 0.4% + 0.4% + 0,2% + 0,25%
balance of GDP of GDP of GDP of GDP
http://www.clubofrome.org/wp-content/uploads/2016/03/The- Circular-Economy-and-Benefits-for-Society.pdf
greatly reducing CO2 emissions by 66%
Source: Stahel, Walter 1982
product-life extension creates local jobs and
prevents waste (substituting manpower for energy)
factory factory LABOUR
LABOUR
factory
and social groups:
repair cafés, DIY,
barter trades, eBay,
Reman: substantially reducing resource
consumption, waste, emissions and costs A 2004 sectoral study on restoring used automotive engines compared
to a like-new condition showed, compared to manufacturing new engines, found:
• Lower economic costs (30-53%),
• Lower raw material consumption (26-90%), • Lower waste generation (65-88%), • Lower energy consumption (68-83%), • Lower emissions (50-88%)
• 73-78% less carbon dioxide (CO2), • 48-88% less CO, • 72-85% less NOx, • 71-84% less SOx, • 50-61% less non-methane hydrocarbons emissions.
Source: Smith, VM and Keolian, GA (2004) The value of remanufactured engines, lifecycle environmental and economic perspectives, Journal of Industrial Ecology, 8(1-2) 193-222
15 Oct 2019 Stahel at University of Coimbra
Stocks represent national resource security
Cheap & green:
ICE1 Redesign
In 1995, the 59 trains of German Rail had been in
service for 15 years, covering 15 million km each.
• Redesign costs were € 3 million per train,
versus € 25 million for a similar new train.
• Redesign preserved 80% of resources -
16’500 tons of steel, 1180 tons of copper -
prevented 35’000 tons of CO2 emissions
& 500’000 tons of mining waste per train. The Redesign included a technological upgrading
of the rolling stock, and allowed to add more seats. 15 Oct 2019 Stahel at University of Coimbra 17
Public procurement
em b
o d
ie d
atoms
15 Oct 2019 Stahel at University of Coimbra 18 Source: Stahel, Walter R. (2019) Circular Economy – a user's guide, Routledge,
The Anthropocene,
• nuclear physics: the bomb, energy and health,
• chemistry: plastic, chemicals, pharmaceuticals,
unknown to Nature’s circularity and therefore ask
for a man-made responsibility for waste.
15 Oct 2019 Stahel at University of Coimbra 19
The era of ‘D’, or the legacy from the Anthropocene,
? are waste managers in control ?
maintaining the value and purity of elements (atoms,
molecules), recovering pure molecules through:
• technologies to De-polymerize, De-alloy, De-
laminate, De-vulcanize materials, De-coat objects,
De-construct infrastructure and buildings.
control (“waste managers”) are limited by legislation,
the second law of thermodynamics and missing tools:
• non-mix collection methods, disassembly and non-
destructive maximum-value recovery policies,
• technologies to recover atoms and molecules. 15 Oct 2019 Stahel at University of Coimbra 20
Value not retained in the Swedish materials system
15 Oct 2019 Stahel at University of Coimbra 21
Material value
Alu 3.1 1.2 40 1.2 (- e) high
Plastic 10 0.8
singular research study – no general academic interest?
Research
needed
Policy challenges
to adapt legislation to the ‘new normal’: • full producer liability (as ultimate liable owner),
• sustainable taxation (do not tax labour),
• do not levy VAT on value preservation,
• give carbon credits for CO2 emission prevention,
• introduce ‘backpack’ indicators (measuring
• introduce absolute decoupling indicators
• extend tax depreciation periods,
15 Oct 2019 Stahel at University of Coimbra 22
15 Oct 2019 Stahel at University of Coimbra 23
the era
of ‘R’
the era
of ‘D’
atoms
Source: Stahel, Walter R. (2019) Circular Economy – a user's guide, Routledge
Full Producer Liability
Spreading the knowledge of the CE ? who is in control ?
• scientific, technical and economic knowledge,
• to class- and boardrooms, parliaments,
• to academia & technical training institutions,
new professions (vehicle restorers).
motivation, education and training challenge
15 Oct 2019 Stahel at University of Coimbra 24
the era
of ‘R’
the era
of ‘D’
Source: Stahel, Walter R. (2019)
Circular Economy – a user's guide,
Routledge, London
scientific R&D is in control
Innovative systems solutions and
• circular chemistry (architectured molecules),
15 Oct 2019 Stahel at University of Coimbra 26
15 Oct 2019 Stahel at University of Coimbra 27
Real wealth is based on use, not
ownership Aristotle
exploiting efficiency, sufficiency and
• internalise the liability for all costs of
risk and of waste,
15 Oct 2019 Stahel at University of Coimbra 28
Material stocks represent corporate and
national resource security:
today’s objects
at last year’s resource prices
Ultimately, rent-a-molecule and license-to-
mine strategies may provide social stability
through income stability for mining nations: Andrew J.Hagan et al (2019) The license to mine: Making
resource wealth work for those who need it most. https://www.sciencedirect.com/science/article/abs/pii/S0301420717305445
https://doi.org/10.1016/j.resourpol.2019.101418
15 Oct 2019 Stahel at University of Coimbra 31
Blue Moon diamond
€ 3.75 mio/carat Safran
missing tools to measure sustainability
Performance
ff
Retained
ownership
& liability
OEM
skills
Circular Economy
Toxic
Release
Inventory
sharing
economy
Source: Stahel and Clift (2016) Stocks and Flows in the Performance Economy, Springer
Sharing Economy
Innovation in social system design is needed
Laundromats need to be combined with animation
(dancings, internet cafés) to make them attractive
for single clients; kindergarten playgrounds.
15 Oct 2019 Stahel at University of Coimbra 34
social
innovation
needed
Success through redundancy and resilience,
failure through abuse and vandalism
free float rental cars, bikes and e-scooters
NO SHARING WITHOUT CARING
contract until 2121
Le pont de Millau, France 36 15 Oct 2019 Stahel at University of Coimbra
buying
performance
Dr h.c. Walter R. Stahel, Visiting Professor, University of Surrey
Founder-Director, The Product-Life Institute, Geneva
www.product-life.org, [email protected]