How can Circular Economy help us to save the planet?
Introduction: a future yet to be written
"I am pessimistic about the human race because it is too ingenious for its own good. Our approach to nature is to beat it into submission. We would have a better chance of survival if we were to accommodate ourselves to the Planet and regard it appreciatively rather than skeptically and dictatorially."
Quote by E. B. White
Today we will study an option to solve the problem that is exposed in the initial quote and, by the way, fight against Climate Change. In addition, we have the privilege the support of our colleague: Josep Maria Mas, director of Domus Serveis, on our blog once again.
2. Is distance a wall against diseases?
According to data from the website Geodatos: between two of the initial COVID-19 outbreaks -Wuhan and Codogno- there are 8,743 kilometers (between Milan airport, the probable entry point of the virus, and Codogno there are 52 kilometers).
In November 2019 the 8,691 kilometers between Wuhan and Milan airport seemed an insurmountable wall is it really so?
It depends on the technology available at the time. In reality, distances are relative.
Three interesting examples will show you how different the time to travel the same distance can be. In all three cases, the speed of the means of transport used will be assumed to be constant:
1. In the 13th century: Marco Polo traveled the distance between Venice and China in three years: 1271-74 (for our example it does not matter that the trip was not exactly from Wuhan to Milan: the scale was the same).
Paradoxically, judging by our response to the initial informations on COVID-19, although we nowadays are proud about our technology, both policy makers and citizens seem to believe that China is as impenetrable as it was in the 13th century... for diseases, not for us.
2. In the 21st century: In a fast commercial airliner - at a cruising speed of 1,000-1,100 kilometers/hour - non-stop is about 8 hours and 45 minutes (actually is about 18 via: Wuhan-Shanghai-Moscow-Milan). Incidentally, this is less than half of the longest non-stop plane trip today: 19 hours and 16 minutes between New York and Sydney.
3. In the indeterminate future: Imagine that our body would be able to survive, without any prior training, to get on the fastest rocket going: 265,540 kilometers/hour to travel the 8,691 kilometers between Wuhan and Milan. The trip would take 117 seconds, or 1 minute and 57 seconds.
3. Reflecting the cost of externalities: the best vaccine
COVID-19 represents a threat. Fortunately we have: scientific research, individual prevention and social discipline. Can economics help us? Yes.
What does the economic concept of "externality" mean? We refer to production and consumption of a good effects that have an impact on its environment, without the producing company passing this cost on to the market price of the product paid by consumers.
An example of an externality is the price of an airplane flight. Until recently, no airline reflected externalities such as noise or environmental pollution in a negative sense or, in a positive sense, the possibility of being able to visit any part of the world (before COVID-19).
In this way, the airline (even more if it is a low-cost airline) has an "infinite target" of customers and its travelers can access distant destinations at a price that, from the moment they consider traveling, they calculate that they can afford: Everybody wins!
No, as flights are so cheap and externalities are not taken into account, nature loses (we all lose). The difficulty of reflecting externalities lies in the fact that not doing so is not only due to commercial interests, there is an objective difficulty: the German government, before COVID-19, was considering charging between 7 and 25 euros per ticket in a "green tax" (from 7 to 25 euros is a big range) or, to put it even more clearly: dear reader: How much would you be willing to pay - in addition to the ticket, boarding costs, luggage etc. - to compensate for your carbon footprint during the flight?
4. Circular economy as a way to take care of the environment and reduce the externalities of production
Circular Economy according to the European Parliament is: "model of production and consumption that involves sharing, renting, reusing, repairing, renewing and recycling existing materials and products as many times as possible." Betting on it is to reduce environmental pressure and reduce overproduction.
Do you think that the stated problem is not important? The circular economy also interests you because reusing products is, in the medium term, cheaper than not doing so. This is still a very virgin field to, in Schumpeter's words, apply the "creative destruction".
5. The production of a car wheel: applied example of circular economy
If you were asked to highlight a single invention in the history of Humankind, what would it be? We dare to say that you would choose the wheel. American civilizations before the arrival of Europeans already used it in toys, but not in vehicles ruled by animals. The fact of using something that would later lead to great progress for a game is not unusual: the steam engine was invented in Greece by Heron of Alexandria in 60 AD and would not be fully applied until the Industrial Revolution in the 19th century.
Therefore, the industrial production of the wheel is the perfect metaphor for the progress of mankind.
Today Mr. Mas explains a case of circular economy applied to the production of a good: the car wheel.
ECO-DESIGN: In this phase, engineers must create the product according to the initial need. This requires thinking about how to break down the wheel into durable and reusable parts - even in another model. Another way is to disassemble the wheel into standardized parts to be adapted to other systems.
REUSABLE MANUFACTURING: In the industrial process of assembly and assembly of circular engineering, it is necessary to counteract the toxic effects of materials while limiting the energy impact of manufacturing. It will also be necessary to adapt the assembly lines of the industries to reprocess the material and incorporate it into circularity. In short, manufacturing must be understood as an infinite process of: creation-assembly-disassembly-adaptation.
RESPONSIBLE USE: The user of the circular product can enjoy it although he has an important social responsibility in the process, since he has to use the materials with the maximum care.
INDUSTRIAL DISASSEMBLY: In the new process of entry into the industrial factory of the product that has exhausted one of the many useful life cycles, it will be necessary to disassemble piece by piece to enter a market-value chain of the reusable product and review by the industrial dismantlers. In this way, the wheel can be renewed, catalogued and reintegrated into an integrated logistics chain of circularity.
The "philosophy" of circularity is based on a culture of repair and a favorable legal environment. Thanks to the European Green Deal, which seeks to make sustainability a vector of growth, we are facing a unique opportunity.
Domus Serveis and Finques Feliu believe in an economy with people and the Planet as the backbone.
Enjoy Holy Week!