The Circular Economy in the European Union: An Interim Review 9783030502386

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Sepp Eisenriegler Editor

The Circular Economy in the European Union An Interim Review

The Circular Economy in the European Union

Sepp Eisenriegler Editor

The Circular Economy in the European Union An Interim Review

123

Editor Sepp Eisenriegler Repair and Service Center R.U.S.Z. Vienna, Austria

ISBN 978-3-030-50238-6 ISBN 978-3-030-50239-3 https://doi.org/10.1007/978-3-030-50239-3

(eBook)

© Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface

This anthology was written before the EU parliamentary elections in 2019. At that time, the EU was facing a crucial political stress test: right-wing, fascist tendencies and so-called illiberal democracies had been established, while Austria had a government at that time that was, at least partially, involved in pooling the EU-sceptical and EU-hostile political parties in the future EU Parliament. Matteo Salvini, Geert Wilders, Marine Le Pen and others wanted to “reform” the EU together!1 The no-deal Brexit was a realistic option. Seen this way, this anthology could also be considered an interim review: What did the EU contribute to the conservation of resources, against the predominant role of the economy, towards fair allocation and against the identified growth problem before the 2019 elections? Implementing the systemic change from a linear to a circular economic system as an EU regulatory policy was a late, yet courageous step in the right direction. Rarely before the interest groups involved in the EU have been so united concerning resource efficiency—the decoupling of our current life stylish consumerism from resource consumption. Of course, the circular economy solves neither the growth nor the distribution problem. But the redistribution from the rich to the poor and the post-growth economy were not politically adaptable, and they were discussed by progressive scientists though (see for example the contributions of Ulrich Brand and Markus Wissen or Niko Paech et al.). Very impressive was the result of an event in the EU Parliament organised by members of the EU Parliament from five different political 1

As it looks at the moment, Viktor Orban’s Fidesz will soon be part of this merger. The top candidate of the Austrian governing party FPÖ for the EU parliamentary election also worked on this “bridge building”. It is irritating that the game with xenophobic fears against the unfamiliar works so well politically but justified fears about climate change and the loss of biodiversity— these topics, well communicated by the media, were already scientifically substantiated as a threat to our species—did not find political resonance. The good news: shortly before the editorial deadline, the FPÖ federal party chairman and vice-chancellor had to resign. New elections were called on 18.05.2019. The experiment to leave government responsibility to an extreme right-wing party has failed in Austria!

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groups, as well as trade unions and NGOs: 223 scientists from all over the EU and beyond called on the EU institutions in an open letter: establish a special commission in the EU Parliament to look at the post-growth period, incorporate alternative indicators into the EU macroeconomic framework, transform the Stability and Growth Pact into a Stability and Prosperity Pact and establish a Ministry for Economic Transformation in each Member State. The Fridays for Future movement makes others who are committed to climate protection look old. It is wonderful when students stand up for our future, their future in particular, internationally, and seem to be able to enforce what neither politicians nor we have managed to achieve. Greta Thunberg, 16, is a pop star for many young people who go on school strikes on Fridays to fulfil the Paris Agreement. To scientifically substantiate the climate relevance of exploding extraction of non-renewable raw materials from our incredibly thin, solid earth crust, the Global Resources Outlook of the United Nations comes just in time: “The extraction and processing of natural resources is responsible for half of global carbon emissions”.2 In May 2019, the kick-off meeting for a groundbreaking H2020 project took place at Delft University of Technology: the main objective of PROMPT3 is to develop an independent testing programme against premature obsolescence—making a decisive contribution to supporting the assessment of the durability and repair-friendly design of electrical and electronic equipment before it is placed on the market. The consortium consists of the most important consumer protection organizations, the repair platform iFixit, the repair service provider R.U.S.Z, TU-Delft and the lead partner Fraunhofer IZM. The results will be made available to test laboratories, consumer organisations, market surveillance authorities and other interested parties and will decide which electrical appliances may be offered for sale in the EU from around 2025 onwards. Shortly before the editorial deadline, the PwC study “The road to circularity. Why a Circular Economy is becoming the new normal” was published.4 It is of great strategic importance because PricewaterhouseCoopers traditionally has a very good image in the areas of auditing-, tax-, legal- and management consulting. When Birgit Haberl-Arkhurst, sustainability expert at PwC (Austria), this organisation, which is equipped with high economic competence and unsuspicious even among conservative economists, says in the context of the publication of the study: “In order to secure the sustainability of their own business in the long term, companies must already take action now: They must critically examine their business model, make use of the current technological possibilities and courageously integrate the mechanisms of the circular economy,” then the last sceptics of systemic change from a linear to a circular economy will be taught a better lesson. The authors of 2

Vgl. Global Resources Outlook (2019). Natural Resources for the Future We Want. http:// www.resourcepanel.org/reports/global-resources-outlook and https://www.theguardian.com/ environment/2019/mar/12/resource-extraction-carbon-emissions-biodiversity-loss. 3 www.prompt-project.eu. 4 https://www.pwc.at/de/publikationen/klimawandel-nachhaltigkeit/pwc-circular-economy-study2019.pdf accessed on 07.09.2019.

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this anthology, however, had already sent out similar messages many years before (see, for example, the introduction by “Mr. Circular Economy” Hugo-Maria Schally and the contribution of Nancy Bocken).

The solid earth crust is just 35 km thick. Everything below (the distance from the upper earth crust to the centre of the earth is about 6500 km) is absolutely hostile to human life. To be able to imagine that the skin of an apple is what we know as nature and perceive as “normal”. It bubbles under this skin. The heat and density of the earth’s interior are unimaginably high. In mines that extract materials at depths of 3000–5000 m already, the heat problem is almost unbearable. From the middle of the mid-oceanic ridges (comparably high, like the Alps), magma emerges, which pushes the relatively rigid oceanic plates apart. At the edges of the even more rigid continental plates, they gradually disappear, melt in the upper mantle below and finally reappear as new “pushers apart” under the midoceanic ridges. This sensitive balance results in volcanic eruptions and earthquakes even without human intervention. Volcanic eruptions in the Caribbean and Hawaii were sold as a tourist spectacles, but earthquakes with many deaths in Italy do not easily pass as an economic factor. Nevertheless, it is amazing what enormous risks our economic system (better: decisive, in many cases, old men in power) are taking “for good reasons” to gain unnecessary luxury at the expense of human existence. The exploitation and waste of non-regenerative raw materials from this highly sensitive lithosphere are problematic enough. If, however, fracking is used to maintain an obsolete, growthdriven economic system, the question is justified: Do they still know what they are doing? Only the stupid and irresponsible politicians deny the climate relevance of our actions. Do we really want to risk the system tipping over? We know about the buffering capacity of our ecosystems. Once too often not listening to the warnings of the scientific community and continuing as before means irreversible damage to the human species. The planet will survive, but humans will end up dying out like dinosaurs. Vienna, Austria 2019

Sepp Eisenriegler Editor

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hugo-Maria Schally

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Representatives of the EU Institutions History of the Circular Economy. The Historic Development of Circularity and the Circular Economy . . . . . . . . . . . . . . . . . . . . . . . . Walter R. Stahel Economic Futures. The Circular Economy Surfs a Wave of Change. But Can It Be Part of Changing the Wave? What Is Implied by the Slogan ‘Regenerative by Design’? . . . . . . . . . . . . . . . . . . . . . . . . Ken Webster Money Makes the World Go ′round? . . . . . . . . . . . . . . . . . . . . . . . . . . . Cillian Lohan The Processes Regarding the Circular Economy in the European Parliament and Related Issues, Discussions, Activities and Challenges—A Personal Approach . . . . . . . . . . . . . . . . . . . . . . . . . Sirpa Pietikäinen The Importance of the Circular Economy Model. Accelerating the Transition to a Circular Economy Model Is Not an Option, but a Mandatory Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Simona Bonafe Will EU Circular Economy Policies Lead Us to Sustainable Development? A Viewpoint from an Environmental NGO Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carsten Wachholz

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Contents

Consumer Protection Representatives Possibilities for and Limitations to Consumer Action in the Circular Economy. Perspectives on Prolonging the Use Period for Durable Consumer Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sylvia Mandl and Nina Tröger

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Representatives of Science Slower Cycles: An Essential Characteristic of the Circular Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tim Cooper

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Circular Economy: Slowing Resource Flows and Increasing Value . . . . 117 Nancy Bocken Beyond the Green Economy. The Imperial Mode of Living as Major Barrier for a Circular Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Ulrich Brand and Markus Wissen The Energy, Resource and Lifestyles Transitions Go Hand in Hand: Insights from the meetPASS Project . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Andrea Frank-Stocker, Katy Shields, Friedrich Hinterberger, and Martin Distelkamp Obsolescence, Useful Life Extension and New Educational Concepts: The Economy Needs Repair! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Katharina Dutz, Manuel Nagel, and Niko Paech More Efficiency is Not Enough. Capabilities and Limits of the Circular Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Hans Holzinger Principles of Tech-Ökonomie: Future of Economics for 2050 . . . . . . . . . 207 Ashutosh Bhardwaj Repair as Top Priority Within the Circular Economy 20 Years of Applied Circular Economy: Repair and Service Centre R.U.S.Z - A Practitioner’s View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Sepp Eisenriegler

Contributors

Ashutosh Bhardwaj Geological Society of London, London, UK; New York Academy of Sciences, New York, USA; Geological Society of America, Boulder, USA; European Geoscience Union Res., Munich, Germany Nancy Bocken Maastricht Sustainability Maastricht, The Netherlands

Institute,

Maastricht

University,

Simona Bonafe Brussels, Belgium Ulrich Brand International Politics at the University of Vienna, Vienna, Austria Tim Cooper School of Architecture, Design and the Built Environment, Nottingham Trent University, Nottingham, England, UK Martin Distelkamp Sustainable European Research Institute SERI, Vienna, Austria Katharina Dutz University of Oldenburg, Oldenburg, Germany Sepp Eisenriegler Reparatur- und Service Zentrum R.U.S.Z, Vienna, Austria Andrea Frank-Stocker Sustainable European Research Institute SERI, Vienna, Austria Friedrich Hinterberger Sustainable European Research Institute SERI, Vienna, Austria Hans Holzinger Robert Jungk Library for Future Issues, Salzburg, Austria Cillian Lohan EESC: Vice-President of the NAT Section, CEO of the Green Economy Foundation, Brussels, Belgium Sylvia Mandl Consumer Policy Department, Chamber of Labour, Vienna, Austria Manuel Nagel Stiftung Ökologie & Landbau, Bad Dürkheim, Germany

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Contributors

Niko Paech University of Siegen, Siegen, Germany Sirpa Pietikäinen Hämeenlinna, Finland Hugo-Maria Schally “Multilateral Environmental Environment, European Commission, Brussels, Belgium

Co-operation”,

DG

Katy Shields Sustainable European Research Institute SERI, Vienna, Austria Walter R. Stahel Product Life Institute, Geneva, Switzerland; Circular Economy of the European Commission, Brussels, Belgium Nina Tröger Consumer Policy Department, Chamber of Labour, Vienna, Austria Carsten Wachholz Brussels, Belgium Ken Webster Centre for Circular Economy, University of Exeter Business School, Exeter, UK Markus Wissen Social Sciences at the University for Economics and Law Berlin, Berlin, Germany

Introduction Hugo-Maria Schally

Since the early days of a European environmental policy, there has been a tension between the goal of protecting the environment and society’s claim to growth and prosperity. This tension was already clearly expressed in the definition of sustainable development by the so-called Brundtland Report (Oxford University Press 1987) in 1987, before the second World Environment Conference in Rio de Janeiro in 1992 (UNCED 1992). The report describes sustainable development as a development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This tension is addressed by two key terms. There is the idea of satisfying the needs of the present in connection with the need to preserve the ability of the environment to satisfy future needs too. For many years, environmental policy worldwide has focused on correcting and remedying the consequences of economic development without tackling the fundamental problem—the fact that current patterns of economic development far exceed the Earth’s limits. The concept of the Earth’s ecological limits was developed and presented in 2009 by a team of scientists led by Johan Rockström of the Stockholm Resilience Centre (Steffen et al. 2015). The basic idea is that our planetary system must find a so-called safe space in which society can satisfy its needs without sudden or irreversible environmental changes. This tension increased even more worldwide as the need for growth and job creation continued to come to the fore politically in the context of the global economic crisis after 2008. In order to resolve the tension, the international community sought economic new concepts. In 2011, the European Commission published a Communication on a “Roadmap for a Resource-Efficient Europe”. On the basis of this roadmap, the European Resource Efficiency Platform—a group of high-level economic and environmental experts—developed a report by 2014 containing a series of economic H.-M. Schally (B) “Multilateral Environmental Co-operation”, DG Environment, European Commission, Brussels, Belgium e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_1

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recommendations for action (EREP 2014). This report was the basis for further consideration by the European Commission of how these general recommendations could be transformed into practical implementation proposals. At the same time, the Ellen McArthur Foundation was also working intensively on the concept of a transition to a circular economy. In a series of studies, the challenges and opportunities of the transition were examined and presented, not least in a study from 2013 (Ellen Mac Arthur Foundation 2013). These and other studies have had a strong influence on the policy debate. In 2014, the European Commission adopted a first circular economy package. This package consisted of a communication on the transition to a circular economy, with a legislative proposal to revise the objectives of a number of waste management directives and several communications. However, this package was subsequently reviewed by the new Commission under the leadership of President Juncker to ensure its coherence with the 10 new priorities for EU policy. After intensive discussions with the Council of Ministers, the European Parliament and all relevant stakeholders, the Commission announced in February 2015 that it would present a new, more ambitious Action Plan in the course of 2015. After intensive work, the European Commission adopted a new EU action plan for the transition to a circular economy on 2nd December 2015. The aim of this plan is to promote the transition to a circular economy in the EU, where resources are used more sustainably and their value is maintained longer in the economic cycle. This action plan included legislative proposals to revise European waste legislation, as well as a list of 54 measures covering the whole life cycle of products and materials. The full implementation of this plan is one of the European Commission’s priorities and is an essential contribution to the EU’s comprehensive agenda for growth and jobs. The action plan for the circular economy should be the starting point for a development in Europe that will lead to a renunciation of an extremely resource-intensive, linear economic model. In a world where meeting the needs of the population is associated with an immense increase in pressure on resources such as land, water, food, feed, raw materials and energy, we can no longer rely on an economic approach based on the principle of “taking, producing, using, throwing away”. This is not only absurd from an ecological sustainability perspective, but also from an economic point of view. The transition to a circular economy can also strengthen European competitiveness, as companies will be less confronted with scarcity of resources and fluctuations in the price of raw materials and additional incentives will be created to develop new business models, innovative and more efficient production methods and sustainable consumption models. The proposed measures are also closely linked to the EU’s energy and climate policies. A transition to a circular economy therefore also supports the implementation of the Paris Climate Convention and the 17 Sustainable Development Goals targets agreed by the global community in the United Nations Agenda 2030 for Sustainable Development. The circular economy is thus a roadmap for fundamental change, which is not only an ecological necessity. The circular economy is the only model that makes sense for our European society and economy in the long term. Europe does not have

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the same natural resources as many other parts of the world and cannot (and will not) compete on lower labour costs and lower environmental and social standards. Europe can only take a leading position in global competition if natural resources are used and reused in a more intelligent and sustainable way. This approach can help to maintain leadership in green technologies and approaches. The measures under the Action Plan cover the entire economic cycle of primary and secondary raw materials, the design, production and supply of products and services, distribution and consumption, the proper disposal and reuse of materials and, ultimately, the production of secondary raw materials that are returned to the cycle. The list of 54 actions at EU level naturally only covers areas where it makes sense to act at European level. The European internal market provides a sound legal framework for this. An essential part of the plan is the support for the development of products that are “able to be recycled”. Such products should be durable, easier to repair, disassemble, reuse and should be composed of materials that are easy to recycle. This will be achieved through the development of technical standards, but also through better implementation of existing regulations, such as the Ecodesign Directive and other directives and regulations. Consumers should be enabled by a range of tools to enable them to make purchasing decisions based on clear and independent information. The instruments range from the EU eco-label, Green Public Procurement (GPP), the horizontal application of the method for calculating the environmental footprint of products and organisations, consumer protection instruments such as directives to combat misleading environmental claims to an EU programme to investigate products for elements of premature obsolescence. Waste management plays a central role in this plan. The supply and demand of secondary raw materials should be developed in such a way that material cycles in the EU are largely closed. On the basis of the European Commission’s proposals, the European Parliament and the Council of Ministers have already agreed on ambitious new targets for waste management in Europe. This new framework will provide the basis for a better and more efficient supply of secondary raw materials in Europe. It also includes the development of quality standards for secondary raw materials, but also improvements in the monitoring of the economic cycle for the presence of substances of concern. The measures also include proposals for those economic sectors that are considered to be important for the transition to a circular economy: for example, the construction industry, the so-called bio-economy, and the raw materials sector. At the beginning of 2018, the Commission presented a further comprehensive package of measures on plastics and chemicals. It is clear that the transition to a circular economy will not take place through packages of measures by the Commission alone; the transition requires a joint effort by all. We need to mobilise all actors in the European Union, including Member States, regional and local authorities, businesses and NGOs. The role of local and regional authorities is of paramount importance. Business and civil society initiatives are essential for the success of the circular economy package. The circular economy

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package is only the beginning of the transition to a circular economy in Europe and worldwide. The work has just begun. As part of the 2015 package, the European Commission has committed itself to producing a comprehensive implementation report five years after the adoption of the 2015 Action Plan. This report will provide an opportunity to take stock of developments since 2015 and provide a basis for further reflection on measures for the transition to a circular economy.

References Closing the loop—An EU action plan for the Circular Economy. Closing the loop, Brussels, 2.12.2015. COM(2015) 614 final. Proposal for a Directive of the European Parliament and of the Council amending Directive 2008/98/EC on waste; COM/2015/0595 final—2015/0275 (COD); Proposal for a Directive of the European Parliament and of the Council amending Directive 94/62/EC on packaging and packaging waste; COM/2015/0596 final—2015/0276 (COD); Proposal for a Directive of The European Parliament and of the council amending Directive 1999/31/EC on the landfill of waste; COM/2015/0594 final—2015/0274 (COD); Proposal for a Directive of the EUROPEAN Parliament and of the Council amending Directives 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment; COM/2015/0593 final—2015/0272 (COD). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Roadmap to a Resource Efficient Europe. COM (2011) 571. Ellen Mac Arthur Foundation. (2013). Towards the circular economy—Economic and business rationale for an accelerated transition. EREP—Manifesto and policy recommendations, European Commission, 31st March 2014. http://ec.europa.eu/environment/circular-economy/index_en.htm. Oxford University Press. (1987). Our common future, Report, from the United Nations World Commission on Environment and Development. Oxford University Press. Proposal for a Directive of the European Parliament and of the Council amending Directives 2008/98/EC on waste, 94/62/EC on packaging and packaging waste, 1999/31/EC on the landfill of waste, 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment; COM(2014) 397 final, 2014/0201 (COD); Communication from the commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions on Resource Efficiency Opportunities in the Building Sector; COM/2014/0445 final; Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions Green ACTION Plan for SMEs Enabling SMEs to turn environmental challenges into business opportunities; COM/2014/0440 final. Steffen, W., Richardson, K., Rockström, J., Cornell, S. E., Fetzer, I., Bennett, E. M., et al. (2015). Planetary Boundaries: Guiding Human Development on a Changing Planet. Science, 347(6223): 1259855. Towards a circular economy: A zero waste programme for Europe COM(2014) 398 final Brussels, 2.7.2014.

Representatives of the EU Institutions

History of the Circular Economy. The Historic Development of Circularity and the Circular Economy Walter R. Stahel

The Historic Development Nature is built on circularity principles, with no waste and without time pressure and financial constraints: witness the water and carbon cycles, the weather and seasonal cycles. However, if mankind floods nature with waste, be it CO2 in the atmosphere, plastic objects in the oceans or objects in space, nature may take a long time to absorb the ‘new food’, and the solution may not be to our liking: when fish eat plastic molecules instead of plankton, people will eat plastic fish, with unknown effects on human health. Early man had to cope with whatever resources were available and could be used as, or transformed into, shelter, food, products or tools. This was a circular economy based on scarcity, as expressed in an old New England maxim: use it up, wear it out, make it do or do without. Circularity was a necessity for most; only the rich and mighty lived in relative comfort. This situation can still be found in less industrialised countries. More than two hundred years ago, the Industrial Revolution enabled society to overcome scarcities of shelter, food and objects. Extensive iron ore and coal mining led to the development of iron and steel, and steam engines became more productive and powerful machines than horses. Hundred years later, electricity enabled men to conquer the third dimension in mobility and to decentralise the use of power; electric cables replaced transmissions. These new energies enabled mass production of anything and turned scarcities first into plenty, then abundance and a plethora of waste.

W. R. Stahel (B) Product Life Institute, Geneva, Switzerland e-mail: [email protected] Circular Economy of the European Commission, Brussels, Belgium © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_2

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But throughout this period, reuse and repair approaches of the circular economy have remained omnipresent in society, silently and invisible. Next to the deafening noise and visual attacks of the publicity of the linear industrial economy, people are unaware that numerous small repair shops flourish as SMEs outside their fields of interest, such as shoemakers and violinmakers, and that they are constantly buying and selling used objects such as coins and banknotes, or trading goods with others through garages sales and charity events in a circular economy simply because it makes common sense. Economists focused their attention on manufacturing and regarded activities related to the utilisation of goods as unproductive and negligible services.

The Pioneering Phase of the CIE The tide started to change in the early 1970s, at the end of the golden quarter century of high economic growth, which followed the Second World War. Among the thinkers questioning mainstream economics was a group of American economists (Hermann Daly, Fay Duchin, Roberto Costanza, Hazel Henderson and others, many of which have been members of the Club of Rome), the Chilean Max Neef (barefoot economics) and most visibly Donella H. and Dennis L. Meadows et al. who wrote the 1972 report The Limits to Growth to the Club of Rome. European cornerstones were economists like Nicolas Georgescu-Roegen (1973 The entropy law and the economic problem) and Fritz Schumacher (1974 Small is beautiful—economics as if people mattered). They laid the foundation for a new economic thinking. In his 1974 book Zen and the art of motorcycle maintenance, Robert Pirsig described caring in operation and maintenance as a key—non-economic—quality necessary to succeed in the circular economy. As the built environment is the chief sector of resource consumption and waste production, architects and engineers started to research different aspects of the CIE. Intrigued by the coincidence of high unemployment in Europe and exploding oil prices worldwide—the oil price shock of 1973—Stahel and Reday analysed the potential for substituting manpower for energy on a micro-economic and sectoral level in shifting from a linear industrial economy (LIE) to a circular industrial economy (CIE). Their 1976 research report to the Commission of the European Communities in Brussels first defined an economy in loops and its impacts on society; the report clearly showed the economic superiority of reusing goods over recycling materials—what they called the axiom of the smallest loop. US architects and engineers also looked at the link between energy, labour, waste prevention, resource conservation and money. In 1976, Bruce Hannon et al. published a report energy use for building construction, a summary of which was published 1978 in Science under the title of Energy and Labor in the Construction Sector. In 1977, W. David Conn, school of architecture and urban planning, University of California, wrote a chapter Consumer product life extension in the context of materials and energy flows, for a book on resource conservation: social and economic dimensions

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of recycling; followed in 1978 by a study in support of policy development for waste reduction, Factors affecting product lifetime, for the National Science Foundation in Washington, DC., and in 1979 an article on developing a tentative model of disposal decisions. In 1978, the Commission of the European Communities circulated a case study influence de la durabilité sur le bilan énergétique (impact of long product-life on energy consumption), researched by CPR/RPA, a French consultancy. In 1979, the Centre for Alternative Industrial & Technological Systems (CAITS) at the North East London Polytechnic published a report Energy Options and Employment, which also looked at technological upgrading of buildings to reduce energy consumption, and John D. Davies of Loughborough Consultants (and the Schumacher circle in London) made his report available on a long-life car project an assessment of feasibility. Almost simultaneously, BMFT, the German Federal Ministry of Research and Technology commissioned Porsche, the car manufacturer, to do a similar study. Then, in 1980, Orio Giarini, an economist who first wrote about—and taught at the Université de Genève—the Service Economy, published Dialogue on Wealth and Welfare. In the 1980s, the interest for the CIE started to reach outside academia. The first CIE publication by OECD Paris was published in 1982 Product durability and product life extension, their contribution to solid waste management. This report written by an English consultant was probably the first policy publication on this subject in Europe. Also in 1982, the Mitchell Prize competition on the role of the private sector in a sustainable society took place in The Woodlands, TX., sponsored by Cynthia and George Mitchell, a Texan business man involved in oil exploration. Stahel was awarded a prize for a paper titled The Product-Life Factor; other prizewinners included Amory and Hunter Lovins and Peter Senge. Also addressed to the business sector was Robert T. Lund’s 1983 start-up guidelines for the independent remanufacturer. Lund worked at the MIT in Cambridge, Mass. and intensively researched the US remanufacturing industry, publishing many more studies on this topic in the following years. At the end of the 1980s, the idea of a functional service economy was first proposed in Europe. The 1987 report by Börlin and Stahel Wirtschaftliche Strategie der Dauerhaftigkeit - Betrachtungen über die Verlängerung der Lebensdauer von Produkten als Beitrag zur Vermeidung von Abfällen (economic strategy of durability—evaluating the product-life extension of goods as a contribution for waste prevention). The study analysed 30 Swiss companies living primarily from service-life extension activities, included a first case study on selling goods as a service (AGFA photocopiers) and was financed by a major Swiss bank. Two years later, Giarini and Stahel published The Limits to Certainty, facing risks in the New Service Economy (1989) providing the economic background of the functional service economy. In 1991, Stahel researched three case studies for the Ministry of Environment of BadenWürttemberg Langlebigkeit und Materialrecycling, Strategien zur Vermeidung von Abfällen im Bereich der Produkte (long-life products and material recycling, strategies to prevent waste in the use of products)—the first study detailing the waste minimisation potential of service-life extension and the sustainability of selling goods

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as a service (clothes washing machines in laundromats). A few years later, Germany enacted its first law of a circular economy, which focused on recycling; reuse was considered to be unrealistic. In the early 1990s, the CIE gained increased attention in the USA. The National Academy of Engineering and the National Academy of Sciences organised annual conferences and workshops on a potential economic paradigm shift; and the Industrial Designer Society of America (IDSA) published 1992 its 12 Principles of EcoDesign. Companies became increasingly interested in the CIE and the Functional Service Economy, culminating in 1994 with a first case study Xerox: Design for the Environment of the Harvard Business School on this topic. Little distinction was yet made between Design for the Environment, selling goods as a service and the CIE, except in the work of the National Academy of Sciences (Stahel 1994, 1997). This and the number of reports analysing various industrial sectors by different researchers in Europe (Davis, de Gregorio, Ruyssen) and the USA (Conn, Hannon, Lund) suggest that the CIE is an example for the simultaneous and spontaneous emergence of an idea the time of which had come. The distinction between the CIE and the Functional Service Economy now becomes increasingly important to develop successful business models and policies, as does the role of design for environment versus designing sustainable solutions (Stahel 2001). The CIE is focused on the use phase of objects; its objective is to manage stocks (assets, capitals) and to maintain their value. Economic growth in the CIE is measured as an increase in quality and quantity of all stocks. And the CIE is holistic, including all assets, be they natural, human, cultural, manufactured or financial assets. The CIE is sustainable because it decouples wealth (value) creation from resource consumption. The value of objects now depends on their use value, no longer on newness and fashion; the development of new skills, such as operation and maintenance, as well as the preservation of old skills to restore historic and heritage objects is important; Eco-Design (called Design for Environment in the USA) is a conscious corporate decision to minimise environmental impairment. The Functional Service Economy, later called Performance Economy (PE), is focused on the functioning of system. It integrates the approaches of the CIE, but in addition maintains the ownership of objects. The PE is sustainable because it internalises all costs of liability, risks and waste. It sells the performance of objects, for example through rental or leasing contracts; its customers are users, not consumers; designing sustainable solutions becomes a corporate strategy to maximise long-term profits, the environmental advantages come automatically with it.

A Caring Motivation and Industrialisation of Stock Management Characterise the CIE This new post-industrial ‘economy in loops’, which started to appear in industrialised countries in the 1970s, differs from the earlier circular economy in two ways: a caring

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motivation and an industrialisation of the management of stocks. Because the circular economy is no longer a necessity, based on scarcity or poverty, it needs the personal motivation of economic actors and consumers who renounce consumption in order to reduce environmental impairment both at the beginning and at the end of pipe. Social factors such as religious convictions can also play a role, witness the sufficiency ideals of the Amish people in the USA and the modesty ideals of Buddhism in Asia. Caring becomes a key factor of sustainability. The industrialisation of managed stock goes beyond the circular economy of reuse and repair services for individuals; it builds on new capabilities such as the remanufacturing of components and goods, and the technological upgrading of technical systems. A broad CIE emerges, based on saturated mass markets and in direct competition with the LIE. Wijkman and Skanberg have shown in their 2016 research that also on a macro-economic level, the CIE is substantially reducing carbon emissions—by about 65%—while simultaneously increasing national employment—by about 4%—and improving the trade balance, substituting manpower for energy in a regionalised economy. It is important to understand this issue of discontinuity: less industrialised countries are ruled by a circular economy of scarcity and poverty, by necessity. In industrialised countries with saturated markets—when the number of new goods coming to market is comparable to the number of similar goods going to waste—the CIE is a conscious choice to cope with abundance and to reduce waste. The missing link are strategies enabling societies to shift from a circular economy of scarcity to one of abundance, without passing through a wasteful consumer society based on fashion and emotions and the resulting waste problems. China, India, Africa, South America are some of the major regions facing this issue. India, for example, relied for decades on shared public transport and a car industry based on two models, Ambassadors and Fiat 1100, which at the end of their lives were returned to the factories for remanufacturing, technological upgrading and remarketing. With the arrival of domestically produced modern cars, emotions and fashion have replaced function and scarcity. The new car manufacturers’ responsibility ends at the point of sale; nobody is in charge of optimising the system consisting of infrastructure, cars and human health. India is faced with constantly increasing volumes of vehicles, air pollution and end-of-service-life car waste. Hindustan Motors, the (re)manufacturer of the Ambassador in Calcutta, closed down in 2016.

The ‘Inherent Locality’ and a Broad Set of External Trends Are Driving the CIE The unstoppable advance of the decentralised CIE is due to an ‘inherent locality’ and fuelled by a broad set of external trends. The resources of the CIE are endof-service-life objects, locally dispersed where the clients are, their density is low, roughly following population density, and they are of a huge diversity. By contrast,

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the natural resources of the LIE—ores in mines and oil in underground deposits— are relatively homogeneous and concentrated in some geographic regions, which are often distant from the LIE manufacturing sites and customers. The most efficient activities of the CIE are thus local and small scale, near its resources and customers. Concentrations of stock can only exceptionally be found, for example in ageing infrastructure which needs to be remanufactured or replaced. Drivers of the CIE are also a set of external trends of techno-economic nature related to intelligent decentralisation, longer-life technologies, reusability as a new industrial quality, the growing Performance Economy (PE) and social autonomy trends: • the trend to intelligent decentralisation is visible in additive manufacturing (3-D printing), micro-production in medicine and food, teleworking and manufacturing processes using local robots instead of the cheapest labour globally. • the trend of longer-life technologies is exemplified by electric motors with a technical life of hundred years, which are set to replace combustion engines with a life of 30 years, and maintenance-free electronic equipment replacing mechanical objects subject to wear and tear. • the trend to reusable high-technology objects is led by SpaceX and its Falcon rockets and Dragon capsules, and the USAF’s unmanned X-378B spaceplane, both of which are cheaper to operate than similar single-use objects. Also concerned are IT components based on nano-technology, for which reuse becomes the only option to preserve resources because the components cannot be recycled economically. • the CIE grows because it is an integral part of the growing PE (Stahel 2010), where manufacturers become fleet managers selling performance, function and goods as a service instead of selling goods, retaining ownership and internalising the liability and costs for risks and waste over the full service life of objects. • social trends of a ‘sharing society’ strengthen circularity: repair cafés, barter trades and other self-help forms of non-monetary circularity are gaining popularity in many countries. Profusers (profound-users), who maintain and operate their physical objects, are replacing the Do-it-Yourself activities of the past, helped by websites with repair knowledge and instructions, such as www.iFixit.com, the free repair manual. In the early twenty-first century, the CIE philosophy had pretty much fallen asleep, except for an attempt by Braungart and McDonough to structure and trademark the CIE knowledge in order sell it to individual companies under their Cradle to Cradle trademark. The German chemist Michael Braungart had been one of the first to promote clean non-toxic production and recycling methods in Europe, the US architect William McDonough joined him with his experience in the built environment. From their original 2002 book Cradle to Cradle, their activity today evolved into a ‘design framework for going beyond sustainability and designing for abundance in a circular economy’.

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In Europe, the broad breakthrough of the CIE is due to the famous sailor Ellen MacArthur—Dame Ellen—who made the CIE the centre of activity of her foundation, which started in 2010. Through publications, conferences and the creation of the CE100 club of economic actors she succeeded in uniting most of the CIE thinkers and within five years made the CIE a household name in Europe, lately also spreading to India. On a European political level, the breakthrough of the CIE came in December 2014 when the European Commission sent its European CE Package to the European Parliament, naming reuse and waste prevention as number one priorities. In 2017, the European Parliament sent a revised version back to the European Commission; it is now in the process of being harmonised before the European Parliament can pass it into law. The breakthrough in Asia came in 2006 when China’s Nation Development and Reform Commission (NRDC) presented the CIE as an alternative development model, and the CIE was integrated as a central topic into the five-year plan of economics social development, culminating in 2008 in the release of the Circular Economy Promotion Law, which was endorsed in 2009, after a politico-economic campaign led by Professor Zhu (2009) from Tongji University in Shanghai, today chair professor of green economy at UNEP-Tongji Environment and Sustainability Development Institute. In 2011, the China Association of Circular Economy (CACE) was founded, which organises a yearly conference on the CIE. Major obstacles to a rapid advancement of the CIE are biased framework conditions and a lack of training and education. If nature is a self-organised system of virtuous cycles, then the economy is a system driven by entrepreneurship, regulations, human desires and policymaking. The competitiveness of managing stocks in the CIE over managing flows in the linear industrial economy (LIE) has long been blurred by subsidies on the production and consumption of natural resources, on transport costs and waste elimination. Together with high taxes on labour, this punishes the labour-intensive CIE which is local, consumes few resources and produces little waste. Alternatives such as ‘sustainable taxation’ start to be discussed (Stahel 2013): in addition to not taxing labour, value-added tax (VAT) should—true to its name— not be applied to the value preserving activities of the CIE; and carbon credits should be given to the prevention of CO2 emissions in the CIE to the same degree as they are given to reductions in the LIE. Political leadership will accelerate the transition from the present to the future without jeopardising the economy. Sweden is leading Europe with its law reducing VAT on repairs, allowing individuals to deduct the labour costs on repair from their income. In the USA, eleven States already do not tax human labour; another dozen US States are looking into this option. The economic and technical knowledge and know-how of the circular economy exists in SMEs and with fleet managers; the challenge is to transfer this wisdom into all classrooms and boardrooms in order to speed up the transition from a throughput to a CIE and PE. Countries which succeed in doing this rapidly will take the lead in sustainable competitiveness. Industrial sectors which succeed in combining the preservation of existing stocks with quantum leaps in technology and science will become industrial leaders.

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The Future of the CIE

Backcasting: View of a mature WinK

The objective of the CIE is resource preservation; the challenge therefore is optimising the material, energy and water resources embodied in objects and materials. The line of attack to achieve this is techno-commercial strategies in the ‘era of R’ for goods, and opportunities of scientific and technologic innovation in the ‘era of D’ for materials. The ‘era of R’ comprises techno-commercial strategies to reuse, repair, restore, remarket, remanufacture and reprogramme objects as well as to re-refine and recycle catalytic chemicals, such as lubrication oils. Also needed is related innovation in marketing, policymaking and R-technologies: reuse options lead to innovation in manufacturing as used banknotes or bottles, for instance, do not come in identical batches and need tolerant equipment (Automated Teller Machines (ATMs), bottling plants) to cope with the qualitative variations of reused goods. At some point, however, the options of the ‘era of R’ will be exhausted. A few objects may become part of national heritage, but the majority will enter the ‘era of D’ (Fig. 1). The ‘era of D’ comprises technologies and policies to de-link assemblies, depolymerise, de-alloy, de-laminate, de-vulcanise, de-coat materials in order to recover atoms for reuse; and to de-construct infrastructure and high-rise buildings in order to reuse materials, and related innovation in D-technologies. Waste and secondary resources are a thing of the past if atoms or molecules can be recycled to the quality and purity of virgin material, such as sr-PET (self-reinforcing PET), which can be remelted and reused indefinitely. From old goods to as-clean as new Draw materials Innovations (atoms) Atoms point of end

17.11.2016

of life of goods

innovative materials & components Production Point of sale of new goods

Product use R-Innovations MPI Magdeburg

Economy in cycles WinK maintains values, quality and quantity of goods 1

Fig. 1 The structure of a mature circular industrial economy (in German WinK, Wirtschaften in Kreisläufen). Source Stahel (2016)

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The highest competitiveness and profit potential of CIE innovation may lie in the ‘Era of D’. Many new technologies and processes in chemical engineering and material sciences can be patented; corporate income then comes from licensing knowledge instead of selling materials. Mining countries are looking at these options—whoever is first wins. The Ana Intercontinental hotel in Tokyo was the first high-rise building to be sustainably deconstructed, disassembled top down in a turban-like closed top with minimal noise and dust emissions. Bringing items down efficiently from the top of a high-rise building enables recovering the energy spent on hoisting them up in construction, making deconstruction a low carbon activity. The biggest societal benefits potential of CIE innovation is the ‘era of R’—reuse, repair and remanufacture offer ample techno-economic opportunities in a skilledlabour-intensive regional economy. Society therefore needs policy innovation: labour is the only renewable resource, which in addition can be educated but will deteriorate if unused. Stop taxing labour and tax things you do not want: emissions, consumption of non-renewable resources, waste.

The Performance Economy as the Peak of the CIE A new trend emerged in highly industrialised countries when people around the year 2000 started to give up car ownership in favour of car sharing and public transport, swopping the emotions and fashion of the LIE for the function and efficiency of the Performance Economy. What looked like a revolution to many has existed for some time. By renting such objects as apartments, vehicles or offices and by selling the use of such objects as hotel rooms, aircraft seats and taxis, economic actors have for a long time been selling the performance of objects in a system context, not the objects themselves. In this sharing economy, the responsibility for use is shared between the owners’ liability and the users’ stewardship for responsible use. Ownership and liability become fuzzy when people share the use of such public objects as trains, concert halls, swimming pools and libraries. The common dominator of all rental and sharing business models is caring—the opposite of vandalism and neglect; the ultimate failure is the Tragedy of the Commons, witness air and water pollution, overfishing, plastic waste in oceans, greenhouse gas emissions and space waste in the atmosphere. The PE integrates the CIE, but in addition profitably exploits both sufficiency and efficiency strategies as well as systems solutions. Lighthouses are a good example for holistic systems solutions: they have contributed more to the safety of shipping and the quality of life of sailors and the well-being of seagoing nations than any technical improvement to ships. They are durable, functional, reliable and have been adapted to technological progress for centuries. But if holistic or systems solutions are the sustainable optimum, who is in charge of them? Our society is organised in silos, focused on specialisation and scientific disciplines; in business, academia and policymaking, decisions are taken in silos, not in holistic contexts. We may need to fundamentally rethink policies and economics. This formidable challenge, which

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society is facing in the shift towards a sustainable future, is anticipated in the shift from a LIE to a PE. In the last few years, the Internet of Things (IoT) has opened a vast new field of applications of the PE. When profits come primarily from exploiting the function and use of goods as well as the data created, manufacturing becomes a means. In the virtual world of Internet, social networks, smart phones, wearable IT and ultimately the IoT, everyone has become a producer of data, e.g. through wearable and driveable electronic devices, the data of which are gathered by global giants like Google, Apple or Amazon and commercialised in the global ‘Big Data’ markets. Where are the dwarfs to contain the new Gulliver? Will users become the losers in the Big Data race because regulators and legislators did not plan the safety barriers on the data highways?

The Choice Between Throughput and Stock Management Ownership, liability and control could become confused in the IoT if manufacturers continue to sell objects such as smartphones in the business mode of the LIE, but try to retain a digital control in order to prevent the remarketing of the object or its components by third parties, which is the prerogative of retained ownership in the PE. Apple, for instance, has developed a robot capable of dismantling iPhones in order to reuse components in manufacturing, but still sells the smartphones in order to maintain its revenue stream. Economic actors cannot have the cake (stock ownership) and eat it (flow revenue). LIE and PE are two business models which are worlds apart. Companies that make a clean change will be the winners. Policymakers should make a clear distinction between sharing economy (rent-a-good) and sharing society (public spaces and ‘commons’) as ownership, liability and control greatly differ. Society will need rules for sharing and for punishing abuse, finding a holistic path that allows all to benefit from the digital revolution and democracy while integrating Big Data and Artificial Intelligence. I am an optimist; the future will be bright, because the champions of the circular economy are numerous: there are hundreds of reuse champions, even if they are not always recognised as being part of the circular economy, such as second-hand markets, auction houses, such websites as eBay and antique dealers who ‘buy junk and sell antiques’. In addition to innumerable SMEs maintaining equipment, vehicles, goods, garments, infrastructure and buildings in the CIE, there are increasing numbers of self-help groups in the sharing society, such as hundreds of repair cafés and such websites as www.ifixit.com who are society’s invisible circularity fabric. The actors of the PE selling goods and molecules as a service are the champions of the CIE. They include manufacturers active in the functional service economy like Xerox, Rolls Royce and Caterpillar, chemical companies leasing their chemicals, as well as fleet managers, such as airlines and shipping lines, armed forces, taxis and hotels. The PEs’ fields of activities are broader and more competitive than those of the

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CIE because they embrace systems solutions and exploit prevention and sufficiency, in addition to efficiency, strategies. This opens numerous new business models both on the supply (such as Private Finance Initiatives and rent-a-molecule) and demand side (such as sustainable public procurement of buying objects as a service). The PE rapidly expanded with the growth of the Internet of Things (IoT). As users now become prod-users, producers of personal data, policymakers are challenged to redefine the protection of authorship (intellectual property rights). Sharing and caring are the basis of a sustainable society; because caring is a personal and cultural attitude which cannot be imposed by policymakers, abuse may lead to developments that end in Tragedies of the Commons. This is the side of a PE which technology and eco-design can hardly influence, and which could thwart a rapid success of some of the sustainable business models discussed.

References Hermann Daly, Fay Duchin, Roberto Costanza, Hazel Henderson and others, many of which have been members of the Club of Rome. Prof Dajian Zhu translated Stahel’s 2006 book The Performance Economy into Chinese and published it in 2009.

Bibliography This alphabetical bibliography lists the early publications on new aspects of the Circular Industrial Economy as they developed. The fact that many names appear repeatedly is a sign that a few pioneers led the development of the CIE especially until 2010, when the Ellen MacArthur Foundation started to actively and successfully promote the CIE and PE. After 2010, the number of publications has grown exponentially both in print, video and e-books and only a few lighthouse publications are still listed in this bibliography. Börlin, M., & Stahel, W. R. (1987). Economic strategy of durability—valorisation of the productlife of goods as a contribution to waste prevention (original title: Stratégie économique de la durabilité - éléments d’une valorisation de la durée de vie des produits en tant que contribution à la prévention des déchets); cahier SBS no. 32. Bâle: Société de Banque Suisse (published in French and German). This report of 30 case studies of service-life extension and selling goods as a service in Swiss industry identified the internalisation of all costs of risk and of waste as the key advantage of the concept of selling goods as a service, giving economic actors a strong incentive to prevent these costs in order to increase their competitiveness. CAITS. (1979). Energy options and employment. Centre for Alternative Industrial & Technological Systems at the North East London Polytechnic, March 1979. Commission of the European Communities. (1978). Influence de la durabilité sur le bilan énergétique (impact of long product-life on energy consumption), researched by CPR/RPA, a French consultancy, May 1978. Conn, W. D. (1977). Consumer product life extension in the context of materials and energy flows. In D. W. Pearce & I. Walter (Eds.) (1978), Resource conservation: Social and economic dimensions of recycling. New York and Longman, London: University Press.

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Conn, W. D. (1978). Factors affecting product lifetime, a study in support of policy development for waste reduction. Los Angeles, CA: University of California, prepared for the National Science Foundation, Washington DC. NFS/RA 780219 final report. Conn, W. D., & Warren, E. C. (1979). Developing a tentative model of disposal decisions. Journal of Environmental Systems, 9(2), 129–144. Davis, J. D. (1979).A long-life car project—An assessment of feasibility. UK: Loughborough Consultants. John Davis was a close collaborator of Fritz Schumacher, the author of ‘Small is beautiful’, and member of the Intermediate Technology Development Group in London. De Gregorio, G. (1982). Maintenance and repair activities. FAST Occasional Papers no. 32, DG for Science, Research and Development, Commission of the European Communities, Brussels. European Parliament. (2017). Circular economy package, proposed 2014 by the European Commission, after revision by the EP. http://www.europarl.europa.eu/EPRS/EPRS-Briefing-573936-Cir cular-economy-package-FINAL.pdf. Georgescu-Roegen, N. (1973). The entropy law and the economic problem. In H. Daly (Ed.), Toward a steady-state economy (pp. 37–49). San Francisco: W.H. Freeman and Co. Giarini, O. (1980). Dialogue on wealth and welfare. Dordrecht: Kluwer Academic Publishers. Giarini, O., & Stahel, W. R. (1989). The limits to certainty, facing risks in the new service economy. Dordrecht: Kluwer Academic Publishers. Grossmann, R., & Danecker, G. (1977). Guide to jobs and energy (p. 21). Washington: Environmentalists for Full Employment. Hannon, B., et al. (1976). Energy use for building construction. Urbana: Energy Research Group, Center for Advanced Computation, University of Illinois at Champaigne. COD-2791-3. Hannon, B., et al. (1978). Energy and labor in the construction sector. Science, 202, 837–847. Harvard Business School. (1994). Xerox: Design for the environment; case study N9-794-022, January 7, 1994. This was the first HBS case study on selling goods as service. IDSA. (1992). The 12 eco-design principles of the Industrial Designer Society of America. Lund, R. T. (1981). Energy recapture through remanufacturing. Boston, MA: MIT Center for Policy Alternatives. CPA 81-20. Lund, R. T. (1983). Start-up guidelines for the independent remanufacturer. Boston, MA: MIT Center for Policy Alternatives. CPA 83-7, March 1983. Lund, R. T. (1984). Remanufacturing, the experience of the USA and implications for developing countries. Washington, DC: The World Bank. WB Technical Paper no. 31, UNDP Project Management Report no. 2, Integrated Resource Recovery Series GLO/80/004. Mac Donough, W., & Braungart, M. (2002). Cradle to cradle: Remaking the way we make things. New York, NY: North Point Press. Meadows, D. H., Dennis L., et al. (1972). The limits to growth. A report to the Club of Rome. OECD. (1982). Product durability and product-life extension, their contribution to solid waste management. Paris: OECD (also published in French). ISBN 92-64-12293-1. Orr, S. G. (Ed.). (1983). An inquiry into the nature of sustainable societies: The role of the private sector. The Woodlands, TX: HARC (The 10 prize winning papers of the Mitchell Prize Competition 1982). Pirsig, R. (1974). Zen and the art of motorcycle maintenance. New York: William Morrow & Co. Rousset-Deschamps, M., & Colpin-Guerini, B. (1985) La réparation et le commerce de l’automobile. Lyon: CEDES, CNRS-Economie et Humanisme. Programme mobilisateur Technologie, Emploi, Travail. Paris: Ministère de la Recherche et de la Technologie. Ruyssen, O. (1982). Maintenance and repair activities, case studies. FAST Occasional Papers no. 33. Brussels: DG for Science, Research and Development, Commission of the EC. Stahel, W. R. (1982). The product-life factor. Mitchell Prize winning paper. The Woodlands, TX: Houston Area Research Center (HARC). http://product-life.org/en/major-publications/the-pro duct-life-factor. Stahel, W. R. (1986a). The hidden innovation. Science & Public Policy, London, 13(4) (Special issue on “The hidden wealth”).

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Stahel, W. R. (1986b). Product-life as a variable: The notion of utilization. Science and Public Policy, Journal of the International Science Policy Foundation, London, 13. Special Issue: The Hidden Wealth. Stahel, W. R. (1986c). R & D in a sustainable society. Science and Public Policy, Journal of the International Science Policy Foundation, London, 13(4). Special Issue: The Hidden Wealth. Stahel, W. R. (1991). Langlebigkeit und Materialrecycling - Strategien zur Vermeidung von Abfällen im Bereich der Produkte. Essen: Vulkan Verlag. ISBN 3-8027-2815-7. (Durability and material recycling—Strategies to prevent waste in the area of goods) http://product-life.org/de/node/84. Stahel, W. R. (1992). Waste minimization case studies for three products. Washington DC: Office of R&D, United States Environmental Protection Agency. English translation of the three case studies in the 1991 report. http://product-life.org/en/archive/case-studies. Stahel, W. R. (1994). The utilization-focused service economy: Resource efficiency and productlife extension. In B. R. Allenby (Ed.), The greening of industrial ecosystems (pp. 178–190). Washington DC: National Academy of Engineering, National Academy Press. ISBN 0-30904937-7. Stahel, W. R. (1997). The functional service economy: Cultural and organizational change. In D. J. Richards (Ed.), The industrial green game (pp. 91–100). Washington DC: National Academy Press. ISBN 0-309-05294-7. Stahel, W. R. (2001). From ‘design for environment’ to ‘designing sustainable solutions’. In M. K. Tolba (Ed.), Our fragile world: Challenges and opportunities for sustainable development (pp. 1553–1568). Cambridge UK: UNESCO and EOLSS (Encyclopedia of Life Support Systems). Stahel, W. R. (2007). The performance economy, first edition 2006 (translation into Simplified Mandarin by Dajian Zhu). www.ewen.cc. ISBN 978-7-5327-4853-2. Stahel, W. R. (2010). The performance economy (2nd ed., 349 p). Houndmills: Palgrave Macmillan. ISBN 0-230-00796-1. Stahel, W. R. (2013). Policy for material efficiency—Sustainable taxation as a departure from the throwaway society. Philosophical Transactions A of the Royal Society, London, 371(1986), 20110567. Published 28 January 2013. https://doi.org/10.1098/rsta.2011.0567. Stahel, W. R. (2016). Opportunity and risk—Two sides of systems solutions. Lecture at MPI Magdeburg, November 17, 2016. Stahel, W. R., & Reday-Mulvey, G. (1976). The potential for substituting manpower for energy. Report to the Commission of the European Communities, Brussels; (1981) Jobs for tomorrow, the potential for substituting manpower for energy. New York, N.Y.: Vantage Press. ISBN 53304799-4. Wijkman, A., & Skanberg, K. (2016). The circular economy and benefits for society. Retrieved from: https://www.clubofrome.org/wp-content/uploads/2016/03/The-Circular-Eco nomy-and-Benefits-for-Society.pdf. Zhu, D. (2016). Circular economy: A new economic model for China and the world. Les cahiers du Comité Asie de l’ANAJ-IHEDN, numéro 12, printemps 2016. Zhu, D. (2017). A working model of sustainability science. Nature, 544, 387–514(7651).

Economic Futures. The Circular Economy Surfs a Wave of Change. But Can It Be Part of Changing the Wave? What Is Implied by the Slogan ‘Regenerative by Design’? Ken Webster

The basic umbrella idea of a circular economy starts with the notion that the economy is about production and consumption, it is about stuff. After all, humans have been producing using and exchanging stuff since forever. How that is done matters a great deal, of course and a linear economy is one where its throughput that matters. It is seen as a machine for processing resources, the more the better (as it offered to make goods widespread and cheap) and the faster the better, as a margin can be small but multiplied by a quantity; that makes a better return… So far, so obvious. ‘Closing the loop’ has always been a feature, where it made economic sense—no one has ever deliberately discarded gold—and ‘recycling’ remains the keyword in many descriptions of a circular economy—even if nuanced in the overall ambition. Here is part of a recent graphic from Veolia (https://www.livingcircular.veolia.com/ en/industry/circular-economy-creating-social-and-environmental-value) illustrating their take on the prominent role of materials recycling in a circular economy (Fig. 1). Recycling still represents a secondary flow of raw materials and as such it is pretty much still throughput orientated, since the system is very ‘leaky’ and losses are significant. It can contribute to overall materials productivity gains. Productivity gains are also sought in the use of energy and especially in the use of labour. We are still on familiar ground. What made the difference, as so often is technology and especially digital which has been doing a great deal to shift around and open up potential to lower costs and to meeting customer demand in new ways. It is not necessarily all about cheaper stuff since a parallel and ongoing shift to ‘servitisation’ is evident; providing the service instead of, or as well as the object. The key proposition for many customers is becoming: Will this object, a coffee machine, a car… provide what I need, work for me, reliably, cheaply? With machines that can also be remotely monitored; control devices and sensors which have become so much cheaper and product + maintenance or service contracts K. Webster (B) Centre for Circular Economy, University of Exeter Business School, Exeter, UK e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_3

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Fig. 1 Parts of the circular economy as described by Veolia

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now worth implementing—then a whole menagerie of niche operations around repair, maintenance, refurbishment now get food in their bowls. Perhaps this puts the focus back on designing for extended product life because the business model becomes potentially much more use/access or a subscription model and so on, rather than ownership per se. Built in obsolescence gives way to keeping the durable on the books since maintenance, upgrades, second market value are more likely and much more possible to realise. The circular economy is an heuristic around what these digitally driven changes can mean for business and resource use. It is this shift in business models that is attractive and also challenging for business since it usually entails the redesign of customer relationships, products, components, materials and systems. That sounds like almost everything! Where will disruption occur next? is a question on everyone’s mind. As Walter Stahel cheerfully reminds us ‘survival in business is not mandatory’. Business is therefore paying close attention. Zooming out to the economy as a whole there are reasons here why this digital disruption is also a very welcome turn of events, or a turn of technology. This requires a bit of history. It starts with the changes implemented after the end of 1970s when national economies became much more global and the financial system was encouraged to be creative and to fill the spending gap which opened up when stagnating median real wages took hold—and when an assumption was made against increasing government spending to compensate (https://www.youtube.com/watch?v=oXK0Z-9ntEQ). In short, productivity kept going up but the spending power of workers in national economies did not—hence the need for private credit. Global production lowered the cost of goods overall and technological change gave it all an extra spin, so much so that in developed nations the near saturation of durables markets became ever more evident. At the same time—the early years of the new century—the private credit boom had maxed out much of the capacity of these consumers to spend more. Sales of products were increasingly replacement sales or upgrades. Since margins were low and finance cheap the emphasis in the business world went from production revenue to capital gains, to investing surplus in assets like real estate or stock exchanges, ‘stock buybacks’, brands, supplying credit, or ‘hoovering up’ intellectual property to create better overall returns. The concentration of ownership went up. Although the great financial crash of 2008 was a shock, China and India took up the spending slack and overall production and consumption kept rising. In much of the OECD however, there were stumbling growth rates and median wages were still stagnant—in many cases for periods stretching back more than a decade. This matters because for businesses to have customers these customers needed money to spend. But the middle class was shrinking, digital (as in automation and logistics efficiency and outsourcing) was an additional stress factor in employment to that of overseas production (offshoring). The result an increasingly fragmenting labour market with a ‘contract’, ‘on demand’ or ‘concierge’ economy growing rapidly at the same time. Sometimes parts of it are erroneously described as a ‘sharing economy’. This shift creates or accelerates fragmentation, and lowered social outcomes but it potentially becomes something of a windfall too.

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If demand is not growing overall, or very slowly, the necessity for business is to sharply lower costs but simultaneously arrange to take a share of that benefit, to take a share of the revealed ‘consumer surplus’. As an example, this is what network platforms can do: they disintermediate between producer and consumer, they hollow out the middle—whether this is bricks and mortar retail with Amazon, the myriad taxi companies with Uber, or perhaps the informal markets which used to include accommodation (now dominated by AirBnB) and second-hand goods (by Ebay) and place themselves into the middle: ‘reintermediation’ but as a (near?) monopoly supplier. It is widely known that network effects or ‘nfx’ produce up to 70% of the value of tech companies (https://medium.com/@nfx/70-of-value-in-tech-is-driven-by-net work-effects-8c4788528e35) and this means that to win they have to win big. It is not a celebration of competition since competition undermines Metcalfe’s Law of networks, which is that the number of connections grows at the square of the number of nodes—but since increasing the number of nodes does not proportionately increase the costs of provision overall then more is better and cheaper. And don’t forget part of the added value is obscured by the obvious: the data from network activity, not just the connections and services provided to customers. This is, we are told, the new oil reserves, the resources of a digital age (https://www.economist.com/briefing/2017/ 05/06/data-is-giving-rise-to-a-new-economy). It might have good outcomes for physical resource use too, if product utilisation rates climb as a result. Less stuff more use, more data, but within a context of subdued overall demand (caused by low economic growth). This low growth takes some of the heat out of the materials and resources issue as an unintended consequence as follows. Traditionally, the lowering of the cost of access and ownership creates a rebound in spending elsewhere and creates jobs and growth, but this depends on the share of the benefit obtained by consumers, the costs of other goods and services (e.g. housing, the price of fuel) and the strength of the jobs market. If these macroelements are not favourable, then digital-inspired circularity could make headway on the relative decoupling of resources use and economic activity. By analogy, the pie is not growing so the only way to increase the share for businesses, which need to grow income is to exclude the competition; to ‘gig work’ the labour component and slash the resource and energy costs to users and consumers at the same time. It is fairly obvious once the penny drops. And for the top 20% of income earners in the technocratic and bureaucratic ‘salariat’—as Prof. Guy Standing calls them (Standing 2009); they are the labour segment that has full-time long-term jobs with benefits. For them, it releases considerably more spending which compensates a little for rising education, housing and medical costs—all of which are asset classes subject to increased investment and price inflation in the period from the mid-1980s. What it means is that the division between businesses aimed at the salariat market and those designed for the precariat become markedly different.

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Manufacturers of large durables like cars or even washing machines are put under then more pressure. The prospect for increasing overall sales volume against a background of stagnant wages, a fragmenting labour market (declining house ownership and turnover of properties releasing wealth?) and cheap-toaccess sharing platforms begs the question of whether selling and using ultra big economies of scale with horrendous up-front investment in plant and machinery still makes the same sense anyway. Despite the rise in new kinds of credit designed to clear some stocks—an example being what the USA calls ‘sub prime auto loans’ (https://www.bloomberg.com/news/articles/2018-05-14/consum ers-skip-more-high-rate-auto-payments-than-during-crisis) there is a sense that overproduction is here again—maybe it really didn’t go away. This adds to pressure for a shift to some bundle of product and service where selling the physical object matters less as a source of revenue compared to controlling access to it and then working on smaller scales in an agile way—but it’s a tough call with so much sunk investment in quite a different proposal. If the shift is ultimately from an economy of stuff to one of ownership of very little stuff, then a number of these firms are going to be in at least one part of the circular economy—the ‘slow the flow’ [extended product life] segment and if design for maintenance/repair/disassembly follows (quite likely if the machine is still on the business’s books) then the ‘close the loop’ function is stimulated too. Today’s global economic trends, according to writers like Guy Standing (ibid.) Rana Foorahah (https://ig.ft.com/sites/business-book-award/books/2016/shortlist/ makers-and-takers-by-rana-foroohar/) are very much towards earning returns from owning and controlling assets—and access to them—and it has been described as the ‘return of the rentier’ as a reference to the Gilded Age in late nineteenth-century USA. In the Gilded Age, inequality and the intermixture of wealth and immiseration described in Henry George’s nineteenth-century bestseller Progress and Poverty, was, at the same time, both puzzling and unsettling (https://en.wikipedia.org/wiki/ Progress_and_Poverty). As discussed, products, components and materials are, thanks to the digital revolution now ongoing, increasingly becoming knowledge intense or knowledge supplemented material assets to be retained by business (not necessarily the OEM) and their value is through their being the basis for economic rents (unearned surplus) rather than primarily profits through sales. This might not be a bad thing, provided the overall costs to users falls. Businessman Peter Thiel, in his praise of what he calls ‘creative monopolies’, looks at it like this: ‘the world we live in is dynamic: We can invent new and better things. Creative monopolists give customers more choices by adding entirely new categories of abundance to the world. Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better’ (Thiel 2014). Paul Mason in 2015 (Mason 2016) wrote that digital was lowering the price of everything and argues that a form of scarcity, rather than abundance is one response, in order to create good returns.

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K. Webster The main contradiction today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy.

In a way they agree with the picture, just not the outcome. Peter Thiel is saying do not worry monopolies are OK because they will bring this abundance anyway and deliver the profits that only monopolies can secure—this time by being at scale via the digital revolution. Everyone wins. Mason looks forward to social production of goods using cheap digital tools and does not see monopolies as benign. Being ‘benign’ depends of course on monopolies not being tempted to adjust prices upwards, or restrict supply. Or not being allowed to do so as a result of new public protection policies. Leaving that slightly to one side for now, a recap: some trends are clear firstly, that the economy is largely financialised (https:// scholarworks.umass.edu/peri_workingpapers/135/) and increasingly rent-seeking, secondly this trend is “resonant” with impacts of nfx, and thirdly, that the economy is run to emphasise production efficiency and lowered resource use/costs. This is a means to create space for these rents and sufficient economic growth through rebound spending to maintain the ‘body of the economy’. Since, in passing, this has a tendency to relatively decouple resource use this economic growth— although limited—provides some jobs via largely indirect effects—the additional spending [see Growth Within (https://www.ellenmacarthurfoundation.org/publicati ons/growth-within-a-circular-economy-vision-for-a-competitive-europe)] as well as some growth in the repair, reuse, maintenance and recycling industries. This represents the potential to maintain lifestyles and increase well-being by being increasingly ‘circular’ but the interesting driver is not primarily the environment—although that is ever present (https://news.nationalgeographic.com/2018/04/sponsor-contentchanging-the-way-we-think-about-plastics/)—its that digital created the space for revenue and capital gains even in a low growth economy. No wonder it looks attractive; however, it becomes obvious that the faster than expected impact of automation and AI means that predictions around employment gains from circular economy shifts (Hawken et al. 2005) are extremely tenuous and particularly those for long-term, full-time employment. Overall, this means that the fit between a circular economy aspiration and established economic expectations and trends can be very good indeed. It means that once the business models crystallise a combination of two of Amory Lovins four criteria of Natural Capitalism—a version of a circular economy described in 1999 (Hawken et al. 2005) will have been addressed; ‘radical resource efficiency’ and a ‘shift from selling goods to selling services’ meet and mutually reinforce each other without them being, let us imagine, an obligation on business in the way that corporate social responsibility might be imagined. Instead, it is a creative response to new business opportunities in a contemporary digital setting which spins off environmental benefits anyway—with some measure of social benefit through employment and access to ubiquitous digital tools and the opportunities they provide.

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And there is the conundrum: in an economy conceived of as in need of supply sided, technical efficiency which will lower the costs of access and ownership and that the additional spending power will bring jobs and growth as well as a kind of decoupling of materials (let us say resources more generally) from economic growth then the circular economy is a winner and will keep on winning. It does this by surfing the wave of change not changing the wave. As King Canute demonstrated to his nobles changing the wave is not within the purview of a mere King (https://en. wikipedia.org/wiki/King_Canute_and_the_tide). So by themselves, this twinning of ‘resource efficiency’ and ‘goods to services’ is still evidentially linear, it is still ‘do less harm’. Braungart and McDonough two longtime exponents of the circular economy under the heading ‘cradle to cradle’ have long railed against the mindset that fails to go further than eco-efficiency (https://www.gre enbiz.com/blogs/enterprise/cradle-cradle). The notion of a circular economy is, in one slogan, ‘regenerative by design’. Economist Kate Raworth goes further and seeks an economy ‘regenerative and distributive by design’ (Raworth 2017) This means rebuilding capitals (natural and social as well as financial) using the systems insights from living systems [you can’t be regenerative without this!, its in the word…] and thus being effective not just efficient. The last two of Lovins’ criteria are thus much more difficult: these are ‘be biomimetic’ (waste = food) and lastly ‘rebuild natural capital’. Both of these speak of open loops not controlling access to generate economic rents—i.e. making sure others get a hold of quality, trackable, saleable and usable products, components and materials (materials as nutrients not as contaminants) and in the biosphere extracting materials, foodstuffs and perhaps energy while regenerating soils, forests and fisheries. It is the sort of idea that Michael Braungart has shared for two decades when he talks of the cherry tree and its blossom. The aim of the tree is, one imagines, another new cherry tree, but its abundance goes to feed the soils and a myriad of other life forms at the same time. It is never captured directly by the tree—always via the soil or other contexts such as air and water. Yet of course a healthy system sustains the healthy cherry tree. It is a context-driven activity. Doh! You can’t get to a full circular economy by just thinking like a tree. “You always have to talk about the forest as well as the trees” Michael Braungart (Personal Communication Hamburg 2010). Perhaps a perceptual shift, like the one underway to a bio-based economy and renewable materials could help (https://www.wur.nl/en/Research-Results/The mes/theme-biobased-economy.htm), but like Braungart’s tree both of Lovins’ final desiderata represent a focus on and a shift in system conditions, the basic rules of the (economic) game. This is because the contextual is self evidently beyond the control of a private business, unless of course what is good for a business is synonymous, by aggregation, with what is good for the economy. This logic is not going to work out from a contemporary science or ‘systems’ understanding as these systems all exhibit emergent properties as they scale; they are more and different than the sum of their parts (Wilson and Kirman 2016). Enlightened business may accept, as Janine Benyus, the biomimicry expert hopes, that the business motto will become ‘be generous’—it is in their interest. Feed the forest to feed the trees. Or it might be mandated that ‘waste = food’, that all the

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Fig. 2 The interplay of resilience and efficiency in the stucture of dynamic systems (EMF—after Goerner and Lietaer)

inputs and outputs are intended and designed as ‘nutrients’ for the system, and that natural capital will enjoy some of that nourishment. After all, according to Walter Stahel, the circular economy is essentially a stock maintenance concept. For him, it is a lake not a river analogy. If Mcdonough and Braungart want eco-effective perhaps systems thinking can also help describe the relationship. It seems from a study of real-world flows (https://jou rnals.openedition.org/sapiens/747) that effectiveness is an outcome of an interplay between efficiency and resilience (Fig. 2). This represents a very different economic emphasis. It is not either/or, effectiveness is a description of systemic optimisation as the graphic reveals (ibid. https:// www.greenbiz.com/blogs/enterprise/cradle-cradle). The work required to explore, in a coherent fashion how these two—the efficient and the resilient, the networked monopoly and the open-source/open loop nested system interact conceptually and practically is the new frontier of the circular economy as it potentially handles what it means to give equal weight to all four of Lovins’ criteria within the real world of systems which are indeed, and ineluctably nested and fractal in character (http://www.sustainablescale.org/ConceptualFramework/UnderstandingScale/ measuringScale/Panarchy.aspx). Using a metaphor, it is not about the trunk of the tree—as if that was the tree. It is about the forest and in the tree, the canopy, the leaves and the roots and tendrils too. But this is a story for another time. The circular economy may have opened another door to different perceptions of the economy, it is part of that shift to seeing ‘circularity’, a codeword for feedback-rich systems and how they thrive as a key to a new wave of prosperity.

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It is those ambitions around being part of ‘changing the wave’ that animates so much interest from so many people. Acknowledgements The views of the author are not necessarily the views of the University of Exeter Business School.

References As a rebuke to his courtiers not a sign of vanity. https://en.wikipedia.org/wiki/King_Canute_and_ the_tide. For example https://www.greenbiz.com/blogs/enterprise/cradle-cradle or https://www.ellenmacarth urfoundation.org/circular-economy/interactive-diagram/efficiency-vs-effectiveness. Full graphic available at https://www.livingcircular.veolia.com/en/industry/circular-economy-cre ating-social-and-environmental-value. Hawken, P., Lovins, A., & Lovins, H. (2005). Natural capitalism; The next industrial revolution (2nd ed.). Routledge. https://medium.com/@nfx/70-of-value-in-tech-is-driven-by-network-effects-8c4788528e35. https://en.wikipedia.org/wiki/Progress_and_Poverty. https://scholarworks.umass.edu/peri_workingpapers/135/. https://www.ellenmacarthurfoundation.org/publications/growth-within-a-circular-economy-vis ion-for-a-competitive-europe. https://www.wur.nl/en/Research-Results/Themes/theme-biobased-economy.htm. https://ig.ft.com/sites/business-book-award/books/2016/shortlist/makers-and-takers-by-rana-for oohar/. https://news.nationalgeographic.com/2018/04/sponsor-content-changing-the-way-we-thinkabout-plastics/. https://www.bloomberg.com/news/articles/2018-05-14/consumers-skip-more-high-rate-auto-pay ments-than-during-crisis. https://www.economist.com/briefing/2017/05/06/data-is-giving-rise-to-a-new-economy. Lietaer, B., Ulanowicz, R., & Goerner, S., Options for managing a systemic bank crisis. https://jou rnals.openedition.org/sapiens/747. Mason, P. (2016). PostCapitalism: A guide to our future. London: Penguin. Nested systems see—‘panarchy’ http://www.sustainablescale.org/ConceptualFramework/Unders tandingScale/measuringScale/Panarchy.aspx. Personal Communication Hamburg (2010). Prof Mark Blyth summarises the historical context—from WW2 to the end of the 1970s. In under 10 minutes… https://www.youtube.com/watch?v=oXK0Z-9ntEQ. Raworth, K. (2017). Doughnut economics: Seven ways to think like a 21st century economist. London: Random House Business. Standing, G. (2009). Work after globalisation: Building occupational citizenship. Cheltenham, New York: Edward Elgar. Thiel, P. (2014). (with Blake Masters), Zero to One Notes on Startups or how to Build the Future. Penguin Random House USA. http://zerotoonebook.com/. Wilson, D. S., & Kirman, A. (2016). Complexity and evolution: Volume 19: Toward a new synthesis for economics (Strungmann Forum Reports). MIT Press.

Money Makes the World Go  round? Cillian Lohan

Money makes the world go  round is the old saying. Well in actual fact, money makes the world go straight would have been more appropriate. Our economy has developed in a very linear way, from extracting raw materials from the earth to producing vast amounts of problematic waste. The future, though, has to be circular. In order to chart the course of where we go next with economic policies and human development, we need to understand where we have been. What has led us to where we are now, and indeed where are we now? In many ways, we are at the peak of our species dominance on the planet. We have organised societies and structures, the lowest ever occurrence of deaths through wars and conflicts, highest ever life expectancy, highest levels of wealth, highest levels of consumption, and at any given point, we are at the most advanced level of technological development. In the broad range of time, since Homo sapiens first appeared in the geological record, this is the Golden Age when measured by a whole range of factors. There are many problems and inequalities in our times, but as a broad comparison between the early twenty-first century and the first appearance of Homo sapiens 200,000 years ago, the advancement of our species is hard to deny. The addition of money to our society was essentially the creation of a system so that trading could be facilitated. It was a kind of natural progression to use that money to be able to create credit, allowing for speculation and investment. In the simplest of terms, this then tied us into the need for growth. To be more precise, the advent of credit and debt led to the definition of growth as we currently understand it. Success of the individual or the society came to be measured according to financial wealth. The health and well-being of an economy, or a country, came to be measured according to levels of growth. C. Lohan (B) EESC: Vice-President of the NAT Section, CEO of the Green Economy Foundation, Brussels, Belgium e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_4

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This dependency on growth has become problematic. For an economy to grow, business needs to produce more goods and services. Growth requires more of everything, more stuff being made, more stuff being consumed, and one clear consequence is more stuff being thrown away as waste. Another is that all this economic activity needs cheap energy. So we have ended up with a linear economy that is growth dependant and addicted to cheap plentiful energy. It is also a system that rewards acting on the immediacy of desire, the want to have something now rather than later, as evidenced by the importance of providing credit in the system. One of the patterns we can observe is that the choices we make as individuals and as a society have often been for short-term gains. It is difficult to make decisions that postpone the reward for many years, more difficult still when the rewards are postponed for many generations. Challenging though it may be, there is plenty of evidence to show that we do actually display this forethought in decisions we make, both as a society and as individuals. Without it, we would not plan infrastructural projects, plant forests, educate children, some of the very basic things we do to keep our society functioning across generations. Although it presents its challenges, as a species we can regularly rationalise the receipt of a deferred benefit. However, it is not always rewards that are being postponed. Many of our decisions are made with a cost that will not be realised for a certain amount of time. The shorter that length of time, the higher the likelihood it will be incorporated into the rationale of the decision-making. Therefore, I will not stick my hand in the fire, the costs of doing that are immediately received. I also will not cut down that tree because I know that it provides shade for my livestock during very hot days. But I might cut down those trees that do not seem to give me any immediate benefit where they are, even though in a couple of seasons I could suffer from a landslide because the trees were acting as a holding structure for the soil on that bank. When the decision to be made provides an immediate benefit (in our example of the trees, cutting them down provides either fuel for fire, or provides raw materials to construct a building or shelter), then the deferred cost becomes even less significant in weighing up the best course of action to take. It is tempting to point to the well cited, though not so completely understood, example of Rapa Nui (Easter Island). Whatever leads to the collapse of that society and its people, it seems clear that the resource they depended upon was depleted through unsustainable usage, through a lack of inclusion of the deferred costs, in whatever resource management decisions were being made at the time. It is equally tempting to look a little closer to home and note that the short-term benefits offered by the fossil fuel powered industries blind us to the longer-term costs. Our short-term choices to satiate our needs versus our long-term preservation instincts are sometimes contradictory. This can also have impacts throughout the economic system. Unfortunately, in its worst manifestation, it can drive disparity across sectors and groups.

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We are living in a time of grotesque inequalities. On a global scale, the inequalities in access to health, education, food and energy to name but a few are well recorded. In some ways, it is easy to excuse them, or at least to not think about them, as their impacts are remote from us. Those unjust inequalities are things that happen in the proverbial “over there”, far away in foreign lands. This feeling of distance can make it harder to acknowledge that the choices we make from a position of privilege can be a driver for inequality. It can allow us to deny the direct links between our choices and the inequalities that persist. These choices range from those we make as consumers of goods and services to our political choices. However, we also have inequalities within the so-called prosperous nations. It is a rare European member state that does not have pressing problems associated with, for example, poverty or homelessness or unemployment. It is much harder to separate ourselves from the reality of the existence of inequalities when they right at home, in our faces. Inequalities are a complex mix social, economic, historical and cultural influences. It would be an oversimplification to attempt to include all these factors in this short space. But we can, at least, acknowledge that they exist and are too prevalent in all societies. And so as a broad picture of where we are now, in our development as a species, there are some concerning mega-trends. Inequality is one. Climate change another. Growing levels of carbon (and other greenhouse gases) have been rapidly fed back into the carbon cycle through the burning of fossil fuels. This is overloading the system and driving global climate change with all its impending catastrophic potential. We are currently living through what is widely recognised as a mass extinction event, which coincides with the global dominance of humans as a species. The trend is that we can expect that 75% of all species will go extinct on our watch. Plastic has accumulated to such an extent in earth’s crust that we have established a new geological epoch, the Anthropocene. The decline in biodiversity and the rise in pollution lead to a consequential undermining of the very ecosystems that sustain us. And let us be clear, the climate may change, the ecosystems may be altered, the biological diversity may plummet but the planet itself will be fine. Earth will continue on in an ever-altering form. Our concern here is for humans, and our concern is to ensure the delicate balance that allows us to prosper as the dominant species is maintained. Too often, the calls for a more sustainable future are mistaken for calls to “save the planet”. The planet and life itself are remarkably resilient and adaptable. The niche conditions that have allowed humans to prosper are the result of a more delicate combination of specific factors. It would seem clear that the challenges we face require action. And while action can occur in many aspects of what we do, how we behave and how we chose to live, one of the core areas that needs to see a fundamental shift in how it operates is the economy. A change into our economic system permeates so much else. A change to a circular economy can be a tool to force a rethink on how we measure growth. A new concept of growth can help to tackle the problems around decision-making based on

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short-term returns and other related ancillary problems. Is it too much to hope that shifting some of these fundamental principles can help us reduce inequalities? Some positive consideration must be given to the fact that we do, at least, recognise the many difficulties that we face. The advent of technology means that we can now make use of predictive modelling in planning ahead. This helps with the historical issues around deferred costs discussed above. Climate modelling has helped to drive a strong international movement to address climate change through the United National Framework Convention on Climate Change and the subsequent Conference of the Parties (COP) meetings. COP21 in Paris leads to the Paris Agreement and ambitious attempt to halt global climate change. The Sustainable Development Goals have been launched with a view to specifically addressing 17 areas, including targets for reduction and elimination of inequalities, poverty, hunger to name but a few. Individual countries and regions have their own legislation that attempts to redress the balance and to focus on preventing further environmental damage. That is not to say that the policies that continue to support environmental damage, pollution, use of fossil fuels, overconsumption and production of waste do not continue to exist. Many community-based initiatives continue to thrive and experiment with more sustainable models of living. These range from full on sustainable communities to groups making their town plastic bag free or creating shared energy production schemes. The range of actions is impressive, from top down to bottom up. It is clear that we are at a developmental junction. We need to make changes to how we live, how we use and consume. Given the challenges we face, those changes will have to be quite radical. We have the luxury of technology to help us get to a more sustainable model of living and functioning. But technology will not bridge the gap on its own. The behaviour changes and changes to how we construct the basics of our economic systems will have to happen in tandem to the use of technology as a solution. The inherent imbalances in the system make a change inevitable. The question is whether the change will come about in a chaotic or in a controlled manner. It can happen dramatically following a reaction to a catastrophic event, or it can be a planned managed transition. The latter is markedly preferable. The shift to a circular economic model should be part of that planned transition. A circular economy is a model that can complement the myriad of other changes that need to happen to make sustainable living and prosperity a reality. The future has to include a reduction in the production of waste, a reduction in the use of virgin finite raw materials, a reduction in the environmental impact of our consumption patterns, an eradication of overconsumption as the norm and an ability for all those in society, including the poorest, to access the highest-quality goods and services. A comprehensive circular economy can deliver on that vision. What then are the resistances to this change? If a new economic model is understood and could be implemented, why would there be any reluctance to make the move immediately to what promises to be a better future for more people? The barriers to circularity are many and varied. But maybe the most fundamental of all is the reluctance towards uncertainty, the resistance to change that may fundamentally shift the status quo.

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Our economic systems depend on predictability and fluctuate accordingly. During periods of stability and certainty, markets rise and growth is steady and dependable. The converse is also true, during periods of instability the uncertainty is reflected in a contraction of the markets. Uncertainty is not good for business. This general rule can also be observed at other levels, not just the macro-scale of international trading markets and globally linked currency values. Within the sectors, and indeed within companies themselves, an unpredictable future leads to high-risk decision-making or paralysis. This paralysis comes about because a lack of clarity on what lies ahead means that reasoned decision-making is impossible, and there are too many unknowns lying ahead. A small company can go out of business during such times, unable to gain access to credit or unable to invest in infrastructure of human resources in order to be able to take advantage of potential new market opportunities. Within the current linear economic model, we have observed plenty of fluctuations in uncertainty. That is not to say that other factors do not have a significant impact on markets, of course they do. But there is always an element of risk management and risk minimisation involved in business. Planning ahead successfully is clearly understood to be a pathway to success but if we consider that adage a little more we could also say that being able to predict the future is clear pathway to success. There is indeed an element of luck also, but when we try to back engineer examples of commercial economic success, we always see that the best return on an investment would be to get in when the company was accurately predicting the future before anyone else. Our economic system is also fundamental to our lives in so many ways. A complexity of factors effect and are affected by the economic paradigm in which we live. Economists lead us to believe that it is a very scientific predictable system that underpins the very functioning of society. The mainstream viewpoint is that economics is hugely important, and that it is being managed in a way that enhances stability and creates potential wealth for all. The evidence of inequality, of corruption and negligence at the top of the international financial system, of exploitation and unsustainability is also presented to the wider public and causes understandable outrage. However, on balance, in Europe at least, there has been a limited but steady recovery from the great economic collapses of end of the first decade of this century. The politics of achieving that recovery continue to cause differing opinions. In particular, the challenges to austerity measures aimed at the poorer members of society that seem to at the same time protect and enhance the wealth of the richest, continue to drive the political agenda in some regions. But overall, there is a gentle reassurance that things are returning to “normal”. The great neoliberal capitalist model is beginning to function again, with its twin gods of growth and debt both rising, one fuelling the other. It would seem that the steady functioning of this model, despite the inequalities inherent in the system and unsustainability of its continued growth requirement, provides a level of certainty and predictability. This is where the first obstacle, the grand obstacle if you like, to circularity occurs. A circular economy is something new. And worse than that, it is something not fully understood. It is a concept that can be simplified for means of an explanation but

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each of the consequential adaptations required throughout the economic model to maximise the potential of circularity requires detailed analysis and understanding. This lack of comprehension and the nature of the change required to implement this new economic model cause resistance. It is an understandable resistance because it is resistance to change, resistance to uncertainty, and it is resistance to the unknown. The messaging from some quarters that moving to a circular economy is a winwin for everybody only throws the fuel of suspicion on the fire of uncertainty. It is a misrepresentation of the likely outcomes of a transition to a circular economy to say that there will not be those who lose out. If you think that you are the one going to lose out from a change in the status quo, then of course you will work to ensure that the change does not happen. When the change is coming from policy-makers, legislation and political institutions, then your strongest tool is arguably lobbying. In the European Union, a Circular Economy Package was withdrawn by the Juncker Commission only to be replaced by the publication of another Circular Economy Action Plan and proposed legislative amendments at the end of 2015. This Action Plan sets the tone for the conversation around what our circular economy will look like in Europe. Since its publication, many of the other legislative proposals are following—some in the form of legislation, others in the form of more scene setting Action Plans or Strategies. There has been much debate about the detailed positives and negatives of the package, and this is likely to continue. The inclusion of eco-design as part of the package was widely welcomed, although the limited scope of the Eco-design Work Plan that followed was criticised in some quarters. This is to be expected and reflects the healthy debate to be encouraged in any democratic transparent system. The challenge has always been to be able to make the first small steps towards ambitious plans and goals. It is not too difficult to set a long-term target for some ambitious goal—whether that is the reduction of waste or the increase in recycling. In some ways, the previously mentioned Sustainable Development Goals reflect this. Not many will argue that a long-term goal to end world hunger is to be supported. The difficulty arises when attempts are made to implement the first steps in order to achieve those lofty goals, particularly, if those first steps mean a change in hierarchy. It is only natural to expect that those currently at the top of the hierarchy, or those benefiting most from the current system will be the most cautious about any change. Especially if that change is explicitly designed to alter the current system. Not rocking the boat is a mantra only heard from those who are already comfortably inside the boat. Those who have profited most from the current linear system are of course the most well-resourced and normally the most organised and structured. Therefore, they have usually strong lobbying structures and networks than are used to apply pressure to policy-makers to ensure than change does not happen too dramatically. In a time where dramatic change is required, this becomes a critical problem. The other issue with the strength of lobbying groups is that the political implications of any action that could result in a job lost are huge. This is not just an influence that comes from lobbying groups for both the business sector and for the workers

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representatives. The small-scale localised impact of implementing any change is felt in the election box. Our relationship with deferred benefits and immediate costs raises its head again. Our political system is geared to short-term returns due to the short-term cycles which we elect politicians for. This can be both a help and a hindrance. It hinders action from policy-makers that has a delayed benefit, or at least it discourages it. Furthermore, it actively discourages actions that have a short-term negative cost, despite any possible benefits over the course of multiple election cycles. These influences shape the first steps enormously. The reality of the situation forces the progress to be achieved with priority given to ensuring the transition is fair and not overly punishing on any one region or sector. This is not a bad thing. It helps to push education and retraining to the forefront of the support system required to affect change. It helps to identify opportunities that can create the leverage for change to circularity but also bring shorter-term prosperity. Indeed, the challenges that involve transitioning to a circular economy are faced by many other ambitious global, multi-generational targets and goals. But the circular economy also holds within its potential structures and implementation mechanisms the antidote to these barriers. Can a future of circularity be realised where the reduction in consumption, the elimination of waste and the reduced dependency on extraction of non-renewable virgin raw materials are achieved while allowing a continuation of current lifestyle? Or at least can it be achieved while altering lifestyle but ensuring that prosperity and comfort levels are maintained or improved? What would that future look like, and are there signs of it already? The hurdle to overcome is how we reduce our excessive consumption rates without feeling like we are going backwards in terms of comfort and convenience. A circular economy can deliver on reduced consumption levels. The mechanism for achieving this is to focus the lens on material flows rather than on products. That is a subtle but fundamental shift in thinking, away from the washing machine for example and towards the parts that make up the washing machine. That is the new focus for those managing the flow of materials. And part of the new circular paradigm is that new players become those responsible for managing the flows of materials. The new focus for the consumer is on usage rather than ownership, but we will come back to that. Consider a product in the current linear system. Typically, a manufacturer buys the component parts and makes the product. The product is packaged, transported to a sales outlet where it is bought by the consumer. The circular economy includes all elements of this process. Circularity at its simplest means not depleting the natural resource. Ideally, the energy used throughout this process would be from a renewable source. Ideally, the packaging is from reused, recycled, compostable or biodegradable materials. Each of these has their nuances, and some are better than others. But for the purpose of this, train of thought just accepts that the packaging for now is circular in nature, thanks to the application of one of those principles. The linear model means that ownership of that product passes to the consumer on purchase. This also means that ownership of all the component parts passes to the consumer. The consumer has purchased a product that will function for a set

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amount of time, which mostly is not specified, and then ceases to function for the purpose it was intended. It will be broken. Once it is broken, it may or may not be repaired. The linear economic model does not promote repair. Instead, it would rather that the product was completely replaced with a new one. For many products, repair is impossible or is more expensive than replacement. The product is therefore now without value and becomes waste. The component parts still retain the same value, mostly, that they had when the product was manufactured. However, in a linear economy this value is suddenly reduced to zero when one particular component of the overall product fails. It is peculiar that by arranging the component parts in a certain grouping to make a product, their value is collectively temporarily increased but their life expectancy is now linked to the shortest-lived component in the system. That changes in circularity. So that is the flow of materials in the linear system—the often-cited take-makeuse-dispose model. The point to be made here is about how circularity can bring continued levels of prosperity and comfort in lifestyle but reduce waste and reduce the use of extracted non-renewable raw materials. The key to it all is the retention of ownership of the component parts. Someone has to continue to own all the bits after the whole thing breaks. In the transition to a circular model, a solution to this problem is needed that can be applied in the short term. And a solution does not see any immediate losses compensated for by so other tangible immediate gains. This balances out when the ownership is maintained by the manufacturer. Much as there are flaws with taking any single product and using it to demonstrate the principles, it does allow the principle to be communicated in a relatable way. The famous washing machine again. In a circular economy, the consumer still goes to the store, or looks online, and chooses the preferred washing machine. The consumer goes to purchase and collects the washing machine, and through whatever process the washing machine is now installed in the kitchen or laundry room and is swirling some clothing around in its tub. Ok. That scene does not look very different to now. But let us look a little closer at the detail and follow the life cycle of the product. Firstly, and we will cover affordability later, but the washing machine is of high quality in both construction and performance. The consumer does not actually own the washing machine. Instead, he has purchased the use of the washing machine for the duration of its expected lifetime. How long the washing machine is going to last is clearly marked on a life expectancy label. The consumer has gone for the highest-quality product because it was affordable under a manufacturer backed lending scheme, which looks much like a hire purchase, or rent to buy scheme. The system is already in widespread use for car financing. The washing machine has a life expectancy of 20 years that is it is expected to continue working under normal conditions for 20 years. It is efficient and importantly fits in well with the rest of the kitchen cupboards and white goods. In five years’ time, our consumer above has a change of circumstance. Let us not get carried away by speculating what has happened, but he decides to change the kitchen. He paints it and changes some of the furniture and furnishings. Now the

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washing machine does not look so appropriate. Also, he is aware that the company has brought out a new one that is even better, and he would quite like to upgrade. This is not a problem. He contacts the retail outlet as normal, and he says he wants to change his washing machine. They my offer him firstly the option of changing the superficial appearance of his existing model. This can be done with the use of 3D printing to provide him with a different range of colours and designs on the surface of the washing machine. He is impressed but declines. He wants the latest model. He describes the new model he requires, he is informed of a slight price change, and he agrees. The next day a van arrives at his door, and the new model is fitted. The old one is taken away. What is interesting here is that the experience for the consumer does not look completely different to what we experience now. The change is subtle. He technically does not “own” the washing machine, but effectively he does as long as he wants to. He has more options to customise or alter the appearance of his product thanks to a clever design. Neither of these changes cause a difficulty or reduction in convenience nor comfort for the consumer. They are improvements. The clever design extends beyond the ability to change the superficial façade. The design of the washing machine is critical as the next step in its journey is considered. The ownership of the The washing machine can be simply put straight back on the market because it is not broken or damaged in this example. It would be offered with a new label reflecting its five years of use and a new life expectancy of 15 years. If the product had been faulty, then it could be easily repaired. The design would allow this. A critical part of circularity in design is modularity and repairability. The first allows sections of a product to be easily interchangeable and replaced. The second allows for working parts to be accessible and designed in such a way as to make fixing them easy. The driver for these elements of eco-design is the changed ownership model of the circular economy. The product remains the responsibility of the manufacturer; therefore, it is in their interests to design in retention of value of the component parts of the product. In total, this leads to a reduction in waste, and there is a reduction in the degradation of environment in order to extract raw materials to feed continued consumption rates. It does allow for continued prosperity and comfort, but it just shifts the emphasis from ownership and consumption to access for functioning of a product and to usage. This is sometimes taken to the next level when we describe the circular economy as a service-based economy. The thing I find most interesting in this is trying to find a way to put the principles of circularity into mainstream use with minimal disruption and with minimal opposition. It could be argued that the end-user does not need to know anything about circularity that the concepts are not relevant to achieving the required urgent change. A shift in ownership, a strong application of eco-design principles, a clear labelling system and a financing scheme could create instant circularity in our economy. To the end-user, it would not appear very different. It would simply provide more options. This is what we should be aiming for when we talk about doing more with less.

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Already some leaders in the business sector are predicting this change will come. The inevitability of change has been the outcome of their considered analysis, and they want to be ahead of the curve. The policy and legislation are moving slowly, but it is moving in this direction. The transition in this sense does not look to impact negatively on the end-user, and it looks to improve the end-user experience. In doing so, it looks to protect some of the ecosystems on which we depend to maintain the delicate balance that permits us to prosper as a species. The potential to lose out in the transition is focussed on those who resist the change for too long and who as a result end up with an uncompetitive linear business model that cannot function in an economy that is powered by circles. The challenge of working out, where the opportunities are, will be critical as we see these new business models develop. Either existing businesses will adapt or new disruptors will enter the market, just ahead of the game, and help to transform. Intermediaries between manufacturer and retail outlets offering remanufacture and repair services can be expected to spring up. But it will not be just the flow of materials during their use that will be different. The early stage of the transformation has to look at what we are currently doing with waste and how we manage that. The circular economy focus within the EU has been criticised for being too focussed on waste, and I would share those concerns. But in the context of first steps, there must be an immediate transformation on waste flows, from collection to whatever happens the materials post sorting. To make the most of the opportunities afforded here, it is important to understand that circular economy is not just about more recycling. It goes beyond recycling. Recycling is a first step, and increased recycling rates are essential. However, before long it needs to move further than that, because even high rates of recycling result in the depletion of the resource raw material. This is particularly rapid in short shelf life products. Beyond recycling means taking into account that achieving a percentage of recycling is only one part of the solution. Achieving a percentage of recyclable content in a product is another element. Ensuring that recycle ability turns into actual recycling is another essential aspect. Recycling as a business needs to ensure that sorted waste is viewed as the commodity that it is. Technology as a result of research and development in this area will move quickly and offer opportunity to reuse materials in more flexible and variable ways. The whole recycling industry will reposition itself as a resource management industry, or a secondary raw material supply facility. The possibilities here are enormous but look very different to what we currently see as the recycling plant or the waste collection services. It should be noted that in a circular economy the production of waste per individual is greatly reduced. The by-product of consumption is waste in a linear economy, but the by-products of usage are resources in the circular economy. This is the conceptual shift that once accompanied by business models that reflect this, and once supported by legislation and policy initiatives, will leave the old linear model out of date and out of business.

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There is an old saying “A rising tide raises all boats”. This is true but it presumes the boats are in good shape and able to float. If they are not, when the change comes, they are left resting on the sand. What is worse is they are now submerged in water while others are floating happily above. Any transition requires the key stakeholders to be part of it in order to ensure effective implementation. Within the three major EU institutions (European Parliament, European Commission and European Council), there was recognition and a recommendation that this be addressed through the establishment of some kind of stakeholder platform. The European Economic and Social Committee (EESC) took a lead role in making this happen. The EESC was established under the Treaty of Rome and is a consultative body to the European institutions. It comprises members appointed by member states and produces its input into the legislative process through the writing and adopting of reports called Opinions. As rapporteur of the EESC Opinion on the Circular Economy Action Plan and associated legislation in the 2015 Circular Economy Package, I made a recommendation that the EESC take a lead role in establishing such a platform. This proposal received a response from the First Vice-President Timmermans and Vice-President Katainen offering to work together on a joint project of setting up the platform. Consequently, the European Circular Economy Stakeholder Platform was launched. The platform has its own dedicated website at circulareconomy.europa.eu/platform and has held open conferences to ensure full participation from all sectors and all geographical locations in the EU. The platform meets once a year at a typically two-day event in Brussels, jointly hosted by the European Commission and the European Economic and Social Committee. It also has a Coordination Group which meets more regularly and works together to steer and drive forward the platform. Its purpose is to promote the transition to a circular economy and to help map that process of change. It also seeks to foster dialogue and in doing so identify the barriers to transition. While the platform itself is open to everybody and is non-restrictive, the Coordination Group had to be established using some type of criteria than would allow for a limited select group to be created that was large enough to be representative and small enough to be able to function effectively. Therefore, a number of groupings were identified that help to give an idea of the range of stakeholders involved in the platform. These were the existing national or sectoral networks, local authorities, civil society groups and those working in the knowledge sector. This has given the Platform Coordination Group a broad range of perspectives. The Circular Economy Platform is an opportunity to keep momentum going on this transition. It has a practical tangible output through the website that is a means of mapping the bottom-up activities that are taking place. The website hosts a visual searchable map, interactive database and interactive forum which allows for all those active in the space or curious to learn more to interact. Knowledge sharing and communication that break traditional silos are essential in moving towards circularity. The platform strives to facilitate that.

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The obstacles faced in achieving a paradigm shift in how we operate our economy are both systemic and functional. They are many and varied. The impacts of implementing a truly circular vision for the future are wide ranging and not always predictable. The challenges mean that success is not guaranteed, but action and interaction are a prerequisite. Stakeholders from businesses to local authorities to NGOs to research centres to trade unions need to come together and ensure that everybody moves forward together. The change is inevitable. The change is critical for long-term survival. The sooner we all start working together and all start pushing in the same direction, the faster the shift can occur. Remember the circular economy is an opportunity to change the system so that the inherent problems can be designed out and removed. But opportunity can only be translated into a reality when all the stakeholders work together to implement the vision. It is hoped that the European Circular Economy Stakeholder Platform can play a role in delivering on this.

The Processes Regarding the Circular Economy in the European Parliament and Related Issues, Discussions, Activities and Challenges—A Personal Approach Sirpa Pietikäinen

Game theories can provide useful insight into why seemingly rational people make seemingly irrational choices. The theories seek to explain how rules of action affect people’s decision-making and choices. Sensible and well-meaning people make choices that affect them and their surroundings negatively if the incentives and the rules are tuned to support such behaviour. If greediness and short-sighted action are rewarded by the system, while simultaneously long-term stability and altruism are repelled, the results will not favour long-term solutions benefiting us all. The global environmental and resource crisis highlights serious flaws in our current ways of thinking and acting. Lack of global rules and regulations means that the real costs of human action—the costs accrued as a result of the way we produce and consume, live, move, eat—are not included in the prices we pay. The profits are enjoyed by a few, while the costs and risks are borne collectively by all of us. As Nicholas Stern proved in his trail-blazing study (2006), the market has failed to incorporate the huge cost of climate change—and increasingly, resource overconsumption—created by our current way of life. If the problem is the perversity of incentives created by current rules, then presumably the easiest and most obvious solution is to change the rules of the game. This is the ultimate aim of the European Union’s circular economy action plan.

Circular Economy—Why Now? It has been forecast that global demand for resources will triple by 2050, including some 70% increase in demand for food, feed and fibre. We already consume some 1.5 globes worth of resources every single year, and following the estimates, would need S. Pietikäinen (B) Hämeenlinna, Finland e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_5

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around four planets full of resources to satisfy the demand by 2050 under business as usual scenario. There are however limits to growth—we only have this one planet. Europe is extremely dependent on imported raw materials and energy, much more so than many of our competitors: 40% of all material used in the European Union is imported, and for some strategic resources the percentage is even higher. Resource scarcity increases prices—that is simple economics. Almost 90% of European companies expect their material input prices to continue rising, according to a Eurobarometer survey. With raw materials running short, Europe is either going to be hit the hardest by resource scarcity or benefit the most from resource use efficiency. If we look at these facts, it is clear that European economies cannot survive— let alone grow and prosper—unless we take some radical steps to increase our resource efficiency and move towards a true circular economy. We have to stop wasting precious resources and start using them more efficiently. In this challenge, there also lies a huge opportunity. The one, who can deliver solutions for the resource efficiency dilemma, is also the winner of the new economic race: this means solving the problem of doing more with less—creating more added value with less resources. In circular economy, there is no waste, products are designed to be durable, repairable, reusable and recyclable, and when they come to the end of their life the resources contained in these products are pumped back into productive use again. I have argued that we ultimately need to increase our efficiency by “factor 10”: learn to create the same well-being with tenth of the resources we use now. Business-driven studies demonstrate significant material cost-saving opportunities for EU industry and a significant potential to boost the EU GDP. The Commission has, for example, calculated that increasing resource productivity by 30% by 2030 would create 2 million new jobs while boosting our GDP by 1%. In order to support this change, we however also need to change the rules of the game. A lot of our thinking and the bulk of the current legislation is created for the needs of the linear “Take-Make-Dispose” economy. We need a new regulatory framework that fits the realities of the new world order. That is the work of us politicians. Regulation is never neutral. Legislation is one of the essential drivers of the business revolution, as businesses and investors alike need a stable and predictable regulatory environment in order to change.

The Challenges of European Decision-Making The European Union is not known to get praised for its quick and efficient decisionmaking. It is often criticised for what is perceived as snail-paced change and incomprehensible backroom deals. The truth is, it is not more efficient or inefficient forum for making decisions than any other democratic national parliament or local municipal council. The same way, it is a forum where people with different backgrounds, belief systems, constituencies and values come together trying to solve problems commonly perceived in need of solving. Democratic decision-making is always about compromises, whether on content or on the speediness and efficiency, unlike

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the dictatorship of one or a few. However, having also experimented with different forms of government, I am sure a great majority of us still prefers this form of governance to the other available options: as famously quoted by Churchill, democracy is the worst form of government, except for all the others. Within the European system, the legislative show is run by three main institutions: the European Commission, which has the right of initiative and which is also tasked with overseeing the implementation of commonly decided rules; the European council, tasked with looking after specific national interests; and the European Parliament, representing the interests of the citizens who directly elect the members of the Parliament. One could argue that there is, broadly speaking, a shared view between and within these three institutions of the direction Europe should move towards in terms of circularity; however, there is much more divergence of views when it comes to the sense of urgency, the depth of the change needed and the set of tools required to realise this change. This is easy to understand. We are talking about a fundamental change to basically everything we nowadays take for granted: what we need is a true paradigm shift, one from linear thinking to complete circular thinking. The backdrop of this required change is one with added—though interlinked—challenges of growing populism and nationalism, massive movements of people fleeing conflict, despair or lack of future prospects, and still healing wounds inflicted on the European economies by the latest economic and financial crisis. The urgency is often felt elsewhere, in taming whichever crisis is on-going at that moment. This comes with the cost to more futureoriented and long-term vision of what kind of Europe we want to build and what kind of world we want to live in. Even though the narrative of circular economy is one of mainly ultimate gains to our societies, economies and environment, in the short term, there will also be losers as with any other major societal change. All of this goes to explain why, for many of us, both the European Commission’s action plan and the legislative and political action by both the European Parliament and especially the council lack the needed speed, depth and ambition.

Backdrop to the Circular Economy Debate: Is Less Regulation Always Better? In July 2015, the European Parliament voted on an own-initiative report titled resource efficiency: moving towards circular economy. Own-initiative reports provide a way for the Parliament—which does not have the right of legislative initiative—to have its voice heard on various important policy issues, or give its opinion on legislation before the Commission proposes it. The background this time was a political disagreement between the Parliament and the Commission over the latter’s decision to withdraw an earlier package of measures on resource efficiency, set in

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motion during the previous legislative term. The aim of this particular own-initiative report was thus to put political pressure on the Commission on the scale and urgency of action. My role was that of Rapporteur, in charge of negotiating the Parliament’s position. Before turning to the actual content of the report and my own aims as a Rapporteur, I would like to briefly touch upon the ideological shift in thinking that has taken place taken place since the Juncker Commission. This shift goes into explaining the decision to draw back the initial set of measures that were seeking to put Europe on a more resource-efficient path. This shift can be best summarised in the concept of REFIT. The idea behind the “Regulatory Fitness and performance programme” is supportable: it seeks to better assess the impact of EU-legislation and to reduce the administrative burden that regulation places on different actors, especially Europe’s small and medium-sized businesses. However, it has unfortunately mainly been used to justify and call for dissolving regulation just for the sake of “less regulation” and as a justification for inaction even where action would be justified. As I mentioned earlier in the text, no legislation is neutral—it will always favour certain activities and actors. It is just a question of what and who. Following this, per definition, regulation in itself is not “good” or “bad”—it’s all about the content. As societies change, so does the need for new types of rules. There was no need to regulate drones when there were no drones. Nor was there any need to legislate on the rules of e-commerce at the point when there was no Internet, let alone online commerce. Just arguing against new regulation on the basis of added burden completely misses the point: our modern societies would not run without a common set of rules that also need to be updated when new actors, innovations and challenges emerge. I would argue that the decision to withdraw the original proposal on resource efficiency has mainly to do with this ideology of “less regulation is better”, rather than “better regulation is better”—a regrettable fact that a big part of us MEPs criticised. My aim as a Rapporteur of the own-initiative report was to show what kind of a challenge we are faced with; but also what kind of huge benefits we could reap especially if we move quickly and with determination. What is more, I am fully convinced that, at the end of the day, we do not have a choice: the limits of our planet dictate what kind of growth is possible. Either we make the required changes now, when we still have a relatively relaxed margin of manoeuvre, or we make the changes faced with no choice and very little time, risking great societal upheaval in the process. I know which path I would rather choose.

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The European Parliament’s Report on Resource Efficiency and Moving Towards Circular Economy As stressed above, we are faced with a true paradigm shift, one that will profoundly affect all aspects of our society; the way we produce, consume, live, move, eat. The main argument put forward in the Report is that we need to address the full cycle, from design to production to consumption and the end of life of any given product. At the same time, we need to have means to measure the progress as well as to compare different products and services against the backdrop of sustainability and circularity: we need a set of commonly agreed indicators. What is more, we need to make sure that money flows to where it is needed—we need a change towards more sustainability-minded finance. Current policies do not sufficiently focus efforts towards this paradigm shift. Europe is locked in a system where valuable materials, many of which come at a high environmental and social cost, end up in landfills or incineration plants. There is not yet a functioning market for secondary raw materials. To change this, I argue that both legislative and economic incentives are needed to create leverage, mainly by: • Supporting innovation in the fields of resource-efficient products and services through various funding mechanisms. • Supporting the demand for such products through public procurement and environmentally friendly taxation, and introducing fees that discourage the consumption of products and services that are not resource-efficient. • Imposing ecological design requirements on products, for example, through a sound ecodesign directive. Making sure that imported goods equally comply with these requirements and substantially improving our currently lax market surveillance are prerequisites to ensuring the resource efficiency of products. • Making sure that the existing legislation does not hinder the development of resource-efficient products or services or business models. Such hindrances can be found, for example, in legislation concerning safety and competition. • Phasing out environmentally harmful subsidies (e.g. grants from cohesion funds for building new landfills or incineration plants). One of the most important calls included in the report was to urge the Commission to propose an overall target of increasing resource efficiency at EU level by 30% by 2030 compared with 2014 levels, as well as individual targets for each member state. To me, this was of utmost importance since lacking a clear aim of where we are headed or setting targets too low, we risk locking ourselves in misguided and suboptimal investments and end up losing a lot of money.

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The Importance of Design When it comes to product design, the European Parliament’s report makes a strong case for the fact that we will not reach circularity without addressing design. This follows from the fact that, ultimately, in circular economy there is no waste, products are designed to be durable, repairable, reusable and recyclable, and when they come to the end of their life the resources contained in these products are pumped back into productive use again. As products become more durable, the whole logic of earnings based on the buy-use-throw away -model has to be reconsidered. We will be moving towards a sort of a “lease society” where products are no longer owned but rather rented, and whereby the value created no longer depends on the more and more products sold but rather on durability of products and the whole set of services that goes into creating the experience of using a given product. Take an example. When buying a new mobile phone, I do not yearn the new plastic, copper, gold, platinum, silver, ceramics or other raw materials that go into that phone; I buy the service the phone can provide me with. Some businesses have already grasped this logic and moved towards creating more value out of renting the product and selling the service rather than the product—it is possible to rent lighting, chemicals, tyres, floor mats… A range of services that earlier you would have bought as a product to be used and then be disposed of at the end of its life. When the ownership of the product stays with the company, it becomes much more lucrative to build exactly the kind of products I mentioned earlier: products that are durable and easy to repair or upgrade. One of the already existing legislative tools to steer product design is the European Union’s ecodesign directive. The directive that originally dates back to 2005 and recast in 2009 introduces a framework that sets mandatory ecological requirements for energy-using and energy-related products sold in all the member states. Currently, the scope covers 31 product groups, including boilers, light bulbs and fridges that are together responsible for about 40% of the EU greenhouse gas emissions. The aim of the directive is that manufacturers of energy-using products should, at the design stage, be obliged to reduce the energy consumption and other environmental impacts of the products. The reason why I would like to see the ecodesign directive enlarged to encompass all product groups are manifold: this tool has already been shown to work—cost savings from ecodesign measures taking into account vacuum cleaners, light bulbs, boilers and fridges are estimated to reach e79 billion a year by 2020, an aggregate of e350 per European household. In addition, the rules set within the EU have an impact beyond the single market, as also imported products placed on the market in Europe will have to comply with the rules. Of particular importance within this context is the fact that the tool is WTO compatible. I have argued that the directive could be used to set overall mandatory resource efficiency and circularity requirements that would be complemented—as is the case now as well—with more detailed rules on product or product group level.

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Other measures linked to product design that the Parliament called for included, among others, action against planned obsolescence and the introduction of mandatory product passport that would clearly state, e.g. what resources and potentially harmful chemicals the product contains. The Parliament wished to extend the minimum guarantees for consumer durable goods and to introduce appropriate measures on the availability of spare parts to ensure the reparability of products during their lifetime. In addition, the Parliament highlighted the importance of green public procurement as a way to leverage the market for more sustainable and circular products and services.

Getting Rid of Waste The aim of the whole circularity is that, eventually, there would be no waste but old products would always serve as raw material for new products. What is regrettable is that a lot of the whole circularity-discussion is still dominated by the end of life rather than the design phase. A lot of what the Parliament recommended in its report was subsequently picked up by the Commission in its proposal to renew the European waste legislation. Mandatory separate collection of main waste streams, extended producer liability, gradual ban on landfilling and clear point of measurement for waste reduction targets were all included in the Parliament’s list of priorities for waste policy. Personally, one of the most important aspects of future waste policy in addition to strict and high recycling targets is moving towards banning incineration. Burning valuable resources has no place in circular economy, and there is a fear that if we lock ourselves now onto a path of more incineration as a tool of waste management, it will be very difficult to step off that path once the investments are made. I would have liked to see a clear limitation to incineration and gradual move towards an effective ban being included both in the Commission’s proposal as well as the Parliament’s report on it. Sadly, here we seem to be falling off the target, however—even though the negotiations are still on-going on the waste package, there seems to be no political will for strongly limiting incineration at this point.

Sustainable Buildings Buildings represent 40% of the EU’s final energy use, and 36% of the CO2 emissions. That is why a special focus on the resource efficiency of the built environment and buildings is needed. ‘Sustainable buildings’ is a concept sometimes reduced to cover only material choices or energy efficiency. However, the concept is much broader. For buildings to be sustainable, the whole lifecycle of buildings has to be addressed, from architectural planning, structural engineering and design to construction and material choices, to operation, modification and renovation, and to the ultimate disposal. We

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also need intelligent and sustainable land use planning and green infrastructure to be incorporated into the framework for sustainable buildings. Urban planning and transportation solutions also have a key role when building a sustainable society. When setting standards for sustainable buildings, a high level of ambition is needed. Renovations are carried out fairly rarely, so it is in the interest of the society and the owner of the building to “get it right”. All renovations that take place now should aim at the highest achievable level of resource efficiency. As 90% of the resident dwelling stock of 2050 already exists, ambitious policies supporting renovations of existing buildings are decisive for a future high-performing resource-efficient built environment. Renovations would bring about multiple benefits on a wide array of issues such as indoor air quality and an increased demand for SMEs that form the majority of the European renovation sector, and which is a sector that cannot delocalise its jobs from Europe. There is still great inconsistency across the sector as regards the definition of sustainable building and construction materials. The concept of sustainable buildings is weak due to the lack of harmonisation, which incurs high costs, lack of confidence, complex communication and almost impossible benchmarking for the whole sector. Obstacles to tapping the potential of the resources contained in buildings are often economic: it is cheaper to landfill than to collect, sort and recycle. Furthermore, a recycling infrastructure is lacking in many member states. Incentives and obligations would lead to better planning of resource use and sustainable material choices along the whole lifecycle.

How Do We Measure Progress: The Importance of Indicators When it comes to the importance of indicators, it is something I cannot stress enough. This importance is easy to understand when one thinks of accounting. Companies announce their accounted earnings periodically, as reported based on accounting standards. The number on accounted earnings shows the amount of money a company has earned during a given period. Several financial sub-indicators make it possible to see what caused the deficits or created the profits of a company. If each company reported their financial flows according to their own preferred systems and if this reporting was voluntary, none of that data would be comparable or meaningful. For similar reasons, indicators on resource efficiency are useful. The resource consumption of each member state as well as resource consumption of public and private sectors should be measured in a uniform manner. The indicators should take into account also imports, not only domestically produced goods. At the level of companies, resource accounting means developing similar methods as in financial accounting. The work to develop indicators to measure resource efficiency has been on-going for a number of years in such institutions as UNEP, the European Commission and the OECD. As with the accounting rules, an absolute, final agreement on the best set of resource-efficiency indicators is not the main point: the main point is to choose the

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set of indicators that most parties can agree to, and to apply that set of rules across member states and different sectors, to ensure comparability. What is more, if we wait until the “perfect set” of indicators emerges, we will be waiting until the end of times. There is no objectively best set of indicators, but a set of indicators that works decently for most sectors. Again, the analogy to accounting is useful: accounting rules are also not “perfect” and there exists a fair amount of disagreement as to how different elements should be taken into account. The point is that there is strong enough consensus on the set of rules that works decently and as they are the same for all, we are able to compare. It is also less of an administrative burden to the companies themselves when they know what rules to adhere to than to be left on their own to choose—or have random rules dictated by larger players in the case of SMEs. Accordingly, the report does not take a stance on what model for indicators should be chosen; but highlights the importance of commonly agreed, binding set of indicators, whatever the chosen model.

The European Commission Action Plan: A Lot of Good but Falling Short of the Challenge The European Commission published its action plan on circular economy at the end of 2015. The package included a lot of good elements that the Commission has subsequently taken forward, especially on finding and tailoring financing tools for the transition towards more circularity. There have also been good efforts to push for more greener and resource-efficient public procurement criteria, as well as on adding elements of circularity into the ecodesign work programme that governs the more detailed, product-specific rules. However, I would still argue that the package falls short of the huge challenge— and potential!—we are faced with. Personally, these shortcomings overall boil down to the fact that the Commission seems to be very averse to regulation and setting binding rules. Again, I would argue that what we need is clear, measurable targets underpinned by a set of clear indicators. All of this should be binding, so that we all know where we are headed and how to measure success or failure of different actors on this path. This clear framework can and should then be supplemented by voluntary rules, guidance and action. Despite the fact that circularity is—by definition—about addressing the whole cycle “cradle to cradle” so to speak, the only tangible legislative tool that was included in the package was on waste. More efficient waste management and making sure materials are recycled efficiently back into the loop is of course essential. But addressing the end of life misses the point: the aim must not be to only increase recycling rates but to ensure that less and less waste is generated in the first place. This can only be done, as argued above, with rules concerning product design and with the overall target of increased resource efficiency.

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Neither of these were taken on board as such in the proposal. The resourceefficiency target is not in. When it comes to product design, it is good that some of the product groups will have rules regarding circularity and resource use as well; however, this is strictly limited to products that are currently included in the scope of the ecodesign directive whereby the need for these kind of rules reach well beyond the current scope—as also argued above.

A Challenge to Be Addressed: Sustainable Finance Financial system is the bloodline feeding our societies, which is why it needs to be at the forefront of the paradigm shift I have been writing about above. If the incentives of the financial sector run counter to the goal of building more resource-efficient societies and combating climate change, the latter efforts are destined to fail. Thus, changing the rules of the game of this sector is as important as changing them for any other sector of our society. When the physical limits to growth are factored in, the whole basis of our economic thinking changes: the way we measure the success and viability of companies or countries, the way we value assets… The list goes on. Current financial and economic legislation fails to incorporate the value of ecosystem services and biodiversity and to take ecological and social risks into account. Such risks are also an economic risk for long-term financial performance that is not reflected in conventional financial analysis. That leads to misallocation of capital. Better accountability of the systemic risks caused by environmental degradation and resource overuse and inaction posed by the current short-term market trajectories should be integrated in financial statements, accounting regulation and integrated reporting. Resource scarcity and environmental risks should be incorporated in financial legislation inter alia concerning credit ratings, capital requirements, insurances, financial product information, accounting and auditing. Capital markets can be reoriented towards long-term sustainability through the integration of environmental, social and governance factors. High environmental risks should be reflected in higher capital requirements. A lot of thinking has already gone into developing resource accounting methodologies such as Natural Capital Accounting. The parameters are there; what is needed now is to put this work into practice. A concerted international effort is required to bring this forth and the European Commission, the Financial Stability Board, the IASB and the IFRS can and should play a central role to promote this effort. This set of agreed-upon accounting rules should subsequently be applied across the whole financial system, to measure the situation of national and global accounts in much the same way the GDP currently does. Both the financial world and policy makers have woken up to this reality and the past years since 2016 saw a lot of international and regional action in this regard. The FSB’s Task Force on Climate-related Financial Disclosures published its final recommendations in June 2017 and the European Commission High-Level Expert

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Group on Sustainable Finance, delivered its final recommendations in 2018, followed by Commission’s first sustainable finance strategy and a roadmap in spring 2018. It is clear that no single piece of legislation can provide the silver bullet for more sustainable finance; however, we should aim at establishing a set of binding rules to accelerate change and to ensure level playing field for all actors involved.

Conclusions Intelligent policy making must start with a future-oriented look. If we want to be fully sustainable by 2050 we need to ask ourselves: What does that mean for European policymaking? What kind of rules do we need to put in place? By when do we need to implement these changes in order to make sure we reach this goal? Backcasting from desired goal to decisions needed today can provide us with some sobering realisations in terms of the urgency and the depth of change. Policy makers must deliver the necessary legal certainty for resource-efficient investments and business strategies to be created. A common feature of forwardlooking businesses is the fact that they do not criticise politicians who promote stricter environmental and climate standards. Quite the contrary, the future-oriented businesses acknowledge the fact that well-targeted and ambitious regulatory framework is the prerequisite for the companies to grow and our economy to prosper in the long term. Intelligent resource use is first and foremost a question of industrial and competition policy. Indeed, instead of a contradiction, there are mutual interests and benefits between business and the environment. The tension in all industries is between companies that base their business on innovation and resource efficiency and those that are locked into policies and market conditions shaped for past conditions. To drive the business revolution, we need to create a stable and predictable regulatory environment. We need commonly agreed and harmonised indicators to measure the change. We need clear targets. We need to draft such legislation that will make sure that what is considered waste today is not considered such anymore—but will be seen as a resource. This requires a fundamental change in how things are being produced: products need to become more durable, easier to upgrade, reuse, refit, repair, recycle and dismantle for new resources. A reformed and enlarged EU ecodesign directive is a crucial tool to ensure resources stay in the loop. Perhaps the most compelling reason to embrace resource efficiency and circular economy models is that we do not really have a choice. Further pressure on supplies of resources as demand increases in emerging markets will force us—sooner or later—to use those resources more carefully. European reindustrialisation can be based only on resource-efficient and innovative businesses. The change has to start urgently to avoid getting locked into resource-inefficient structures. Since the initial writing and publication of this article, there has been a fast development in the field of circular economy. In 2018, the Commission published

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the first sustainable finance strategy and legislative initiatives that established common criteria for sustainable investments (EU taxonomy), new disclosure requirements for investors regarding sustainability risks and impact, and the integration of sustainability within benchmarks and suitability requirements. In 2019, the Commission launched a European Green Deal, which includes initiatives for New Circular Economy Action Plan and Sustainable Finance Strategy 2.0 in 2020. In the New Circular Economy Action Plan, the emphasis is on sustainable product policy, waste policy and some key value chains, such as buildings, textiles, food, packaging and electronics.

The Importance of the Circular Economy Model. Accelerating the Transition to a Circular Economy Model Is Not an Option, but a Mandatory Decision Simona Bonafe

The current linear development model, which may be summarised as ‘take, produce, consume and dispose of’, is beginning to show signs of reaching its limits. Our planet is warming, and the resources used, on which we depend, are becoming increasingly scarce. Unless structural measures are taken, demand for raw materials by the world economy could increase by a further 50% in the next 15 years. In order to reverse this trend, we must adopt a circular development model which keeps materials and their value in circulation within the economic system for as long as possible, by optimising the integrated waste cycle in order to put resources to efficient use. Reuse, recycling and recovery are becoming the keywords around which a new paradigm needs to be built to promote sustainability, innovation and competitiveness, so that waste will cease to be a problem and become a resource. An industrial transition towards a well-functioning economic system where materials are sustainably sourced, reused and recycled in order to limit the amount of virgin raw materials ‘entering’ the cycle, as well as the end-of-life waste ‘leaving’ the cycle is essential. At the European level, already a 30% improvement in resource productivity by 2030 would deliver an increase in GDP of almost 1% by 2030, create more than 2 million additional jobs and put us on track to a more resource-efficient Europe profiting from related ecological, economic and social benefits. The new circular economy package shall therefore be viewed in a far broader context than that of a mere review of waste legislation but a crucial instrument for preserving the environment, making the European economy more competitive and promoting sustainable reindustrialisation. Increasing the value of resources means intervening in all phases of the product life cycle: from extraction of raw materials to product design and from distribution, through consumption, to the end-of-life of products.

S. Bonafe (B) Brussels, Belgium e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_6

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A clear and stable legislative framework is the first step in promoting the transition. Such a systemic change calls for ambitious policies, backed by legislation capable of sending the right signals to investors. If European legislation fails to incorporate clear definitions and binding targets, it could impede progress towards the circular economy. Taking the waste hierarchy as a basis, European legislator shall hinge around two main objectives: strengthening of waste prevention measures and channelling waste back into the production process. In order to reduce the quantity of waste, it is necessary to launch upstream the innovation of production processes and business models on which the circular economy has to be based. The implementation by Member States of preventive measures throughout a product’s useful life cycle is the most effective way to improve resource efficiency and to reduce the environmental impact of waste, by promoting durable, recyclable and reusable materials by means of suitable economic instruments. The introduction of EPR schemes at national level for various products has proved to be an effective tool for optimising waste management costs and the possibility of reducing end-of-life costs for products can be used as an incentive for the design of products that can be reused or recycled. Finally, it is necessary to take measures in line with Agenda 2030 for sustainable development in respect of major environmental and ethical issues, so as to reduce food waste and marine litter by 50% by 2030. Ambitious targets in respect of the preparing for reuse and recycling of municipal waste can help ensure that waste with high economic value is recovered and recycled as quality secondary raw material. At the same time, separate waste collection systems for different kinds of waste are the prerequisite for creating a high-quality recycling market and attaining the targets set. The current provision for exemptions on technical, environmental and economic grounds has in practice led to this requirement not being fully applied. At the same time, Member States shall use economic and regulatory instruments to ensure fair competition between virgin raw materials and secondary raw materials. The transformation of the Union into a green, low-carbon economy which uses resources efficiently is already one of the main objectives of the Seventh European Environmental Action Programme, and it is worth recalling that Europe has committed itself to attaining the UN’s sustainable development targets. Accelerating the transition towards a circular economy model is not an option, but a mandatory choice. While we have to face the striking effects—even economically— of climate change with increasing global competition for lacking resources, we cannot pass this opportunity. Combining economic and industrial development with sustainability is an evolving process that we cannot suffer, but a challenge we have to take on and facilitate with a far-sighted and pragmatic legislative framework.

Will EU Circular Economy Policies Lead Us to Sustainable Development? A Viewpoint from an Environmental NGO Perspective Carsten Wachholz

How Does the EEB Engage in the Policy Debate at EU Level? The European Environmental Bureau (EEB) is based in Brussels and represents Europe’s largest network of environmental organisations. It brings together around 140 civil society organisations from more than 30 European countries and other non-governmental networks dedicated to sustainability. The EEB was established in 1974 to provide a focal point to monitor and respond to the emerging EU environment policy. It acts as a communication channel between its members and the EU institutions—the Commission, the European Parliament and Council. The EEB tackles most pressing environmental problems by agenda-setting, monitoring, advising on and influencing the way the EU deals, e.g. with sustainable development, environmental justice and participatory democracy. It closely coordinates EU-oriented activities with its members at the national level as well as engages in relevant policy processes at international (UN or OECD) level. The circular economy is such a cross-cutting issue that impacts a lot of different policy areas at the same time. Therefore, it forces not only policy-makers but also environmental organisations to think outside their usual silos and connect with their fellows working on such different topics such as mining, energy, chemicals legislation, agriculture, transport, industrial processing, waste, life-cycle assessment or consumer information. The planet’s natural resources are in everything we consume, from our phones and furniture to our food. However, Europe’s economic model based on continuously increasing levels of production and consumption has become unsustainable. According to the Global Footprint Network, Europeans are eating up on average more than the double amount of resources compared to what nature can provide us with. This is true for mineral resources (such as metals) as well as living goods (such as biomass). What’s more, industrialised countries consume a comparatively high share C. Wachholz (B) Brussels, Belgium e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_7

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of the world’s resources, leaving a huge environmental footprint in those countries where the exploitation takes place to satisfy their demand. European countries are disproportionately represented among the 20 countries in the world which consume 75% of all materials used globally (Dittrich et al. 2012). Western Europe tops the list of net import regions with a high ecological debt, when the material flows of all biomass, fossil fuels and metals are considered together (Mayer and Haas 2016). As the rest of the world tries to catch up with European living standards, global demand for natural resources will further increase. Consequently, EU countries must reduce their own resource consumption, limiting it to its fair share of what the planet can provide. But for now, Europe is heavily dependent on importing natural resources, many of which are critical materials for the proper functioning of the economy. Although it published numerous strategy documents on the issue (European Commission 2011), the EU has struggled so far with putting forward concrete actions on improving its resource efficiency and sufficiency. Despite broad support from a high-level multi-stakeholder platform (European Commission 2014) for a comprehensive EU policy approach towards a resourceefficient and circular economy, the 2014 new President-elect of the European Commission, Jean-Claude Juncker, ignored the need for action in his political priorities. Instead, he emphasised the need to regulate less at EU level and insisted on a principle of political discontinuity, i.e. not pursuing further initiatives of the previous administration. As a prominent first decision of his new cabinet, the proposal for a revised EU waste legislation was withdrawn. Only after huge protest from businesses, NGOs and Member States, the European Commission’s First Vice-President, Frans Timmermans, promised to deliver a new and more ambitious Circular Economy Package by the end of 2015. Finally, a new policy package was released, containing a significantly weakened proposal for the EU waste legislation beyond 2020 and an EU action plan for 2016–2019 with a list of 54 measures (European Commission 2015). This document addresses the main life-cycle phases such as production, consumption and waste management plus some sector-specific issues about biomass and food waste, construction and demolition waste, plastics and critical raw materials as well as additional funding and monitoring. However, the work of the European Parliament and most of the EU Member States focused mainly on the waste-related aspects of the Circular Economy Package as this was the only legislative proposal tabled by the Commission. At the same time, the policy debate put a lot of emphasis on aspects of product design, circular economy services and new business models, highlighting the economic opportunities of going beyond the usual sell-use-dispose production and consumption pattern. By doing so, an increasing number of stakeholders beyond the waste management sector became actively engaged in the circular economy field. Environmental organisations are committed to mainstreaming this concept across institutions and industries, while at the same time advocating for provisions that ensure that circular economy practices lead to an overall reduction in consumption of natural resources (Fig. 1).

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Fig. 1 Building a circular economy in Europe

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What Challenges Do We Face in the Circular Economy Policy Debate Today? Everybody seems to agree with the overarching goal of a circular economy that “aims at keeping products, components and materials at their highest utility and value at all times” (Ellen MacArthur Foundation). But the devil lies in the interpretation of how this generic principle translates into the realities of a global market economy and into adequate policy frameworks for different sectors, companies or categories of products and services. Politicians struggle to define what circularity means and how to resolve important trade-offs when promoting aspects such as durability and reparability, recyclability, phasing out of hazardous substances, or increased market uptake of reuse and secondary raw materials. Nonetheless, the Circular Economy Package is the first serious attempt to align products and waste-related policies at EU level. Existing instruments such as mandatory Ecodesign requirements for energy-related products, Green Public Procurement and Ecolabelling criteria are being investigated how to promote the transition towards greater circularity of goods and services. Associations, e.g. for the furniture and textiles industries have started considering seriously the opportunities and barriers for their business in a more circular economy. So far, so good. Unfortunately, even these initial policy responses towards the resource-related challenges of our current economic model are contested heavily by some business representatives especially from the electronics sector who want to keep the linear status quo and weaken the regulatory approach towards circular economy. According to their advocates, politicians should not interfere in markets who will find the most resource-efficient solutions by themselves. Different economic actors either expect a competitive advantage or a potential loss of profitability for their business operations in case the legal framework is adapted to a circular economy as the new standard. The current practices for repair and reuse of electrical and electronic equipment are still very limited, considering the overall annual sales figures for new products in this sector. For a very long time, manufacturers have opposed any attempt regulating design aspects that would allow for longer lifetimes and better utilisation of the precious resources contained in their products at the end of life. Instead, those issues were supposed to be dealt through a distinct legislation on Waste of Electrical and Electronic Equipment (the so-called WEEE Directive). When those rules were to be strengthened in 2012, design requirements for repair and recycling as well as targets on preparation for reuse were blocked again because industry wanted to focus only on the collection and recycling obligations. Now, as the European regulators try to introduce resource efficiency standards through the EU Ecodesign Directive, the same industry stakeholders prefer to deal with it only at the end of life but not at the design stage before new products are being put on the market. Passing the buck helps those manufacturers avoiding to be regulated effectively on design aspects that would allow for better repair, preparation

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of waste products for reuse, recovery of reusable components as spare parts or highquality decontamination and recycling from complex and mixed material streams. Depending on how this power game between public and private interests will end, we might get at least some minimum requirements through the implementation of the EU Ecodesign Directive that defines market access rules for all companies who want to sell energy-related products in Europe. Such requirements rely mostly on rigorous updates and expansion of industrial standards. Again, device manufacturers are blocking attempts to include strong criteria in electronics standards that would encourage product designs that are easier to repair, easier to upgrade, and easier to disassemble for recycling. A recent report on the US standard developing process shows how industry continuous resistance to establish a consistent set of environmental leadership criteria on repair and reuse rendered the whole system ineffective (Schaffer 2017). There are many other examples showing that the circular economy has become an important lobby battlefield between more progressive and more conservative business representatives. At the same time, many politicians do not want to talk about transformation of markets, but simply set some basic environmental standards that would allow as many European companies as possible to continue business as usual. Measures to achieve resource savings and to eliminate fees for disposal of residual waste are perfectly in line with a traditional cost-efficiency approach. What makes the circular economic narrative so compelling to policy-makers, business and green NGOs, is its promise to deliver both economic and environmental benefits because the same or even more economic output could be generated with less input of natural resources. Cutting both costs on materials and waste while boosting resource-saving jobs is also attractive for the promotion of societal welfare. However, increasing resource efficiency does not equate to reducing our overconsumption of natural resources in absolute terms, nor does it address the impact of the continued extraction and use of primary raw materials on the environment. A study led by the renowned Massachusetts Institute of Technology (Magee and Devezas 2017) finds that technological advances alone will not bring about dematerialisation. The researchers also found no evidence of an overall reduction in the world’s consumption of materials. Alone 44% of all materials processed today (i.e. biomass, fossil fuels, waste) are used to provide energy and are thus not available for recycling today. In this situation, more efficiency in one area can even lead to more resource extraction in another area—as is the case when using fossil fuels to melt electronics in order to recover some precious metals like gold. Promoting greater circularity of today’s production and consumption in Europe alone will probably not be sufficient to substitute the primary raw materials and to reduce significantly our environmental footprint to an extent that allows mankind to stay within planetary boundaries. Analysis of the global material flows shows that currently for only 7% of the global economy’s inputs, the material loop is closed and that strategies recovering its output are limited (Haas et al. 2015). But that is exactly what is currently happening: Mainstream politicians like to see the circular economy as an add-on to green the existing economic model, grasping environmental benefits, creating jobs and capturing economic value in addition to a still linear production

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and consumption system. Many companies who already invest into circular economy strategies prefer exploring business model options that carefully avoid the risk of cannibalising profits from their core operations that still depend on ever-increasing global sales figures. Other companies might see the circular economy as a viable opportunity to continuously prosper in already saturated markets such as in Europe while continuing to pursue aggressive growth targets in emerging economies and developing countries. While there is a growing awareness and understanding of what circularity of products and services should encompass from a technical point of view, the policy debate tends to overlook the role of market effects in the circular economy. Recent research has started to question whether closing material and product loops prevents primary production or could even increase overall production, which can then partially or fully offset the benefits claimed by policies supporting a circular economy (Zink and Geyer 2017). This kind of rebound effect can be explained, e.g. through the limited capacity of secondary materials, components and products to substitute for primary ones, and even more importantly by resulting price effects on markets. In the first case, the supply base will increase as primary and secondary resources complement rather than substitute each other, i.e. by serving different markets or by attracting new buyers in low- or high-end niches. And if circular products and services successfully result in lower prices compared to its substitutes, buyers might simply increase or shift their overall consumption but not decrease it (Fig. 2). To sum it up, the biggest challenge that we face in the circular economy debate today is to design and to implement strategies that effectively reduce the overall input of resources into our economy and aim at utilising the growing stock of things that have already been produced instead of only managing fast-cycling material flows such as packaging for example.

Fig. 2 Illustration of rebound effects

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Therefore, adequate policies must be put in place to ensure that efficiency is combined with sufficiency so that circular economy practices will finally replace primary production, and limit the risks of the above-mentioned rebound effects, e.g. by: • establishing intelligent circularity criteria and ecodesign standards in relevant policy frameworks that encourage companies to progress beyond the legal minimum; • promoting secondary materials, components and products that can compete with primary alternatives in quality, price, or target market, and • shifting taxation from labour towards extraction of primary resources, their use or related environmental impacts to compensate for circular economy price effects. Unfortunately, the current EU Circular Economy Package follows the overarching European policy agenda on growth, jobs, and competitiveness that does not dare to prepare governments, business and civil society for the needed transformation of our economic system towards a globally sustainable development. By mainly promoting more efficient resource use from production and consumption to better waste management, it follows a rather fragmented regulatory approach. The European angle of the circular economy debate also neglects the global impacts of EU policies, e.g. on developing countries. The question would be how to activate and scale up existing tools and combine them with new policies in such a way that they trigger systemic changes (Fig. 3).

Where Will We Be in 2025? With only five years left until 2025, the future of the circular economy in Europe remains rather speculative at this point of time. On the one hand, there was a high risk for political discontinuity after the elections to the new European Parliament and the establishment of a new EU Commission in 2019. The implementation of the EU Circular Economy Action Plan came to an end by then and the next administration has to relaunch a new set of policies as their priority in times of coping with the economic consequences of the Covid-19 crisis. Only a few EU Member States have started implementation of a complementary and meaningful circular economy strategy at national level. On the other hand, more and more companies are already seizing the economic opportunity and competitive advantages of becoming first adopters of more circular business models. The digitisation will allow even more people than today to explore collaborative ways of consuming less through sharing, repairing, leasing or renting platforms. And some may add that the combination with 3D printing technologies will bring also a fourth industrial revolution to manufacturing industries, allowing for decentralised and customised solutions. In my opinion, there could be two possible scenarios for 2025 which most likely will further evolve in parallel and maybe lead someday to some sort of coexistence: The corporate circular economy and the open-source-based shared economy

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Fig. 3 Crucial points towards a circular economy (Dr. Willi Haas, Alpen-Adria University, 2016)

(Raworth 2017). The corporate circular economy will definitely be more advanced in 2025 because zero-waste manufacturing practices, selling services instead of products, and recovering own-brand goods for refurbishment and resale can be highly profitable in certain markets. These top-down strategies are seeking to establish control over their used products and related value chains, including the use of patented materials and proprietary technologies. In this scenario, the circular economy will be mainly dominated by large corporations that develop individualised approaches to reclaim and reuse their own parts and materials. In turn, this would lead to high fragmentation within and across industries, thus reducing the potential of a circular economy. In contrast, an open-source-based shared economy approach addresses those barriers to greater circularity that cannot be overcome by individual companies only implementing solutions within their own factory walls and proprietary boundaries. Innovators, designers, and activists connect with each other worldwide through digital platforms and networking events with the aim of promoting the use of Open Source Circular Economy (OSCE) solutions and methodologies to create a shift to a global sustainable circular economy (as stated in the OSCEdays Mission Statement). By 2025, a global knowledge commons could be built up and accessible to a broad range of companies, networks of regions and cities, civil society initiatives and non-governmental organisations.

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In this type of circular economy transparency would be key: defined modularity and open standards would allow for designing components in a common shape and size, easy disassembling and rearranging the things according to the user’s changing needs. Full disclosure of information about composition of parts and materials, their location and options for recovering and reusing them would become available not only to the original manufacturer and their authorised partners but to any service provider including the customer him- or herself. Already today local repair shops, customisation experts and innovative designers start collaborating and sharing their knowledge how to make an open-source-based circular economy work. Unfortunately, both large corporations and even governments are trying to limit the free exchange of information through the internet. I personally believe we need to strongly support and defend the best of both scenarios. The corporate world can immediately start making their own value chains more circular by changing their business strategy and putting considerable resources into finding appropriate solutions. Frontrunner companies will have a considerable impact on their respective partners, suppliers, customers, markets and sectors. But to make sure that best practices in circularity are the minimum norm and not some vague aspiration for business, governments should set stricter rules for a much more elevated level playing field. In order to complement the corporate circular economy and to move beyond what is going to happen anyway, a strong public policy framework is needed to secure and foster an open-source-based shared economy. Otherwise the overall impact on changing our still dominating linear and unsustainable production and consumption patterns would be limited. Therefore, dissemination of meaningful circular economy information and practices should become a priority for public policy over protecting proprietary solutions and securing profits to large corporations. Governments need to nurture and protect bottom-up sharing initiatives and innovative start-ups pushing for more inclusive, open-source solutions because they will not prosper if only corporate interests take over the circular economy. Still, both big business and open-source solutions could compete in terms of availability, scope, quality, or convenience if public policy creates fair rules for a level playing field. Finally, all circular economy policies should continuously evaluate their potential to replace primary production and to reduce overall resource consumption including related environmental footprints.

References Dittrich, M., Giljum, S., Lutter, S., & Polzin, C. (2012). Green economies around the world? Implications of resource use for development and the environment. https://www.boell.de/sites/ default/files/201207_green_economies_around_the_world.pdf. Ellen MacArthur Foundation. The concept of a circular economy. https://www.ellenmacarthurfoun dation.org/circular-economy/overview/concept. Accessed online 07/2020. European Commission. (2011). The roadmap to a resource efficient Europe. COM (2011) 571. http:// ec.europa.eu/environment/resource_efficiency/about/roadmap/index_en.htm. European Union. (2013). General Union Environment Action Programme to 2020 ‘Living well, within the limits

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of our planet’. Decision No. 1386/2013/EU of the European Parliament and of the Council of 20 November 2013. http://ec.europa.eu/environment/action-programme/. European Commission. (2014). European resource efficiency platform. Manifesto & Policy Recommendations. http://ec.europa.eu/environment/resource_efficiency/re_platform/index_en. htm. European Commission. (2015). Closing the loop—An EU action plan for the circular economy. COM/2015/0614. http://ec.europa.eu/environment/circular-economy/index_en.htm. Global Footprint Network. Advancing the Science on Sustainability. http://www.footprintnetwork. org/. Accessed online 07/2020. Haas, W., Krausmann, F., Wiedenhofer, D., & Heinz, M. (2015). 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, 19(5), 765–777. http://onlinelibrary.wiley.com/doi/ 10.1111/jiec.12244/full. Magee, C. L., & Devezas, T. C. (2017). A simple extension of dematerialization theory: Incorporation of technical progress and the rebound effect. Technological Forecasting and Social Change, 117, 196–205. http://www.sciencedirect.com/science/article/pii/S0040162516308022? via%3Dihub and http://news.mit.edu/2017/technological-progress-alone-stem-consumption-mat erials-0119. Mayer, A., & Haas, W. (2016). Cumulative material flows provide indicators to quantify the ecological debt. Journal of Political Ecology, 23, 350–363. http://jpe.library.arizona.edu/volume_23/ MayerandHaas.pdf. OSCEdays Mission Statement. What is open source circular economy? https://oscedays.org/opensource-circular-economy-mission-statement/. Accessed online 07/2020. Raworth, K. (2017). Doughnut economics: Seven ways to think like a 21st-century economist. Schaffer, M. (2017). Electronics standards are in need of repair. http://repair.org/standards/. Zink, T., & Geyer, R. (2017). Circular economy rebound. Journal of Industrial Ecology, 21(3), 593–602. http://onlinelibrary.wiley.com/doi/10.1111/jiec.12545/full.

Consumer Protection Representatives

Possibilities for and Limitations to Consumer Action in the Circular Economy. Perspectives on Prolonging the Use Period for Durable Consumer Goods Sylvia Mandl and Nina Tröger

Introduction and Overview The quantity of materials consumed in Austria not only grew continuously from 1960 to 2012; it hit 22.2 tons per capita in 2012, a figure considerably above the European average of 13.5 tons per capita (BMLFUW and BMWFW 2015). If one considers just private consumption spending, it increased by a nominal amount of about 3% between 2009/10 and 2014/15 (Statistik Austria 2017). Interpreters of our times therefore frequently refer to today’s society as a consumer society (e.g., König 2000) in which the pace of social life is accelerating in many areas. However, our current economic system is based on outdated assumptions that natural resources are available in unlimited quantities and that the environment has an infinite capacity to absorb emissions (Mont 2008). Vital systems on the Earth are increasingly endangered by water, air and ground pollution as well as our excessive use of resources and land (Jackson 2009). Economic models that shift the focus to long-lasting products and the extension of their period of use have gained significance as alternatives to present-day production and consumption patterns in recent years. One of the better known approaches is the circular economy, which aims to reduce the use of energy and resources through reprocessing, reuse and repair (Mont 2008). The greatest savings can be achieved if goods continue to be used in accordance with their original purpose (Ellen MacArthur Foundation 2013), i.e., if their period of use is extended. In Europe, the circular economy was first mentioned in Germany in 1976 in connection with the German Waste Disposal Act. In 2010, the Ellen MacArthur Foundation was established with the goal of accelerating the transition to the circular economy. The goal of the organization is to collaborate with companies, the political sphere, and the scientific community to develop solutions to the challenges in the S. Mandl · N. Tröger (B) Consumer Policy Department, Chamber of Labour, Vienna, Austria e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_8

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transition to a circular economy and to put the circular economy on the agenda of decision-makers. It was not until later that these objectives were also promoted at EU level with the Directive 2008/98/EC on waste (He et al. 2013) and the package of measures on the circular economy (EC 2014a, b; Ghisellini et al. 2016). The latter focused on more environmentally sound product design, an increase in the recycling rates and a reduction in waste quantities, whereby existing measures, in particular, are supposed to be combined. Special plastics and foods as well as construction and demolition waste are targeted. The European Commission believes this approach will change the entire way people consume, do business and live their lives. The circular economy is supposed to: …boost the EU’s competitiveness by protecting businesses against scarcity of resources and volatile prices, helping to create new business opportunities and innovative, more efficient ways of producing and consuming. It will create local jobs at all skills levels and opportunities for social integration and cohesion. At the same time, it will save energy and help avoid the irreversible damages caused by using up resources at a rate that exceeds the Earth’s capacity to renew them in terms of climate and biodiversity, air, soil and water pollution. (EC 2015:1)

On the consumers’ side, BEUC is the organization at EU level advocating that directives be implemented in a way that enables a long use period to be achieved for products. In 2017, for example, there was a call for the introduction of an EU quality mark that conveys information about the product life span. The extent to which the ambitious goals of the EU are actually achieved depends not least on the seriousness with which the individual program points are implemented and a comprehensive change is brought about in our ways of production and consumption. This also requires that consumers take a more active part in recycling and continuing to use products (Ghisellini et al. 2016). In the current discussions on the circular economy, consumers tend to be given a passive role, being called upon merely to accept or reject new models (Hobson and Lynch 2016). If the circular economy does indeed become the next major political and economic project of the EU, an intensive analysis must be conducted as to which roles that individual citizens can be accorded in this context (Hobson and Lynch 2016). If the circular economy is seen as a regenerative system based on decelerating and closing the materials cycle and the energy cycle (Geissdoerfer et al. 2017), the following courses of action can be identified on the consumers’ side: the delay of replacement purchases; maintenance and repair, and the reuse of goods (Wieser and Tröger 2018). If products are used longer as a result, the environmental burdens associated with their manufacture can be reduced substantially in some cases, as can the consumption of energy and resources. Research findings indicate that the decision to replace a product depends just as much on consumer traits as on the features of the product (e.g., quality, design) and on the product range (e.g., release of new versions) (van Nes 2003). In other words, fundamentally different levers can be applied to prolong the use period of goods. Being able to identify them requires a deeper knowledge of consumer practices and attitudes. This is the point at which this paper begins, showing the possibilities for and limitations to action for consumers in the circular economy based on a study on the use period and obsolescence of durable consumer goods that was conducted in Austria.

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The next section starts by delving into the methodology applied in the underlying study before turning to the findings on consumer expectations, their product-specific utilization practices, and their motives for ceasing to use a product. A discussion then ensues on what significance a longer use period would have for consumers and which consumer policy measures could promote this longer use period. The paper ends with a summary.

Methodology This paper is based on the report of the Vienna Chamber of Labor (Arbeiterkammer Wien) published in May 2015 entitled “The Period of Use and Obsolescence of Consumer Durables in the Age of Acceleration. An Empirical Study of Austrian Households” (Wieser et al. 2015). The goal was to determine the use period of consumer products and to examine the variety of reasons for replacing them. As part of the study, an online survey was carried out and personal interviews and surveys were conducted at the households of the dialog partners. The online survey yielded data on a large number of different products, which was important in that conclusions about the use period depend heavily on the selection of the products involved (Prakash et al. 2016; Cox et al. 2013; Evans and Cooper 2010a). The qualitative interviews provided deeper insights into personal experiences and individual behaviors in the respective context (Jick 1979; Cronbach 1975). The triangulation of the methodology rendered the results more internally coherent and more generally applicable (Hussein 2015) while also helping to produce a full picture of the use of consumer products. The focus was on 21 different products (such as clothing, home furnishings, as well as small and large household appliances). A stepped-up effort was made to collect data on the acquisition, use and reuse phases of mobile phones, which explains the special emphasis put on them in this paper.1 “Use period” is defined here as the time between the first and last use of a consumer product by a person. A longer use period is accompanied by slow rates of replacement purchases, i.e., a longer time period between the acquisition of a product and its replacement with another product. “Life span,” as used here, indicates the time in which the product is usable (or functional).

Online Survey The online survey was conducted over a two-week period in November 2014. A quota sampling procedure was selected to obtain a sample for the Austrian population aged 18–65 that was representative in terms of gender, age, educational level, federal 1 An

in-depth analysis and discussion of the data collected on mobile phone use in Austria can be found in Wieser and Tröger (2018).

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Table 1 Sample distribution in the online survey Category

n

%

Female

508

50.3

Male

501

49.7

18–29

241

23.9

30–39

205

20.3

40–49

249

24.7

50–59

206

20.4

60–65

105

10.4

Gender

Age

Educational level Compulsory school

242

24.0

Apprenticeship/vocational school

479

47.5

Matura (general qualification for university entrance)

186

18.4

University

102

10.1

state, and household size. The survey focused in particular on information around the use period of previously used mobile phones. This product is often possessed individually and is subject to rapid technological advances and fashion trends. Repairs can be carried out in principle. The online survey comprised 44 questions, some of which were posed based on previous answers that were given (filters were set). All questions underwent pretesting to avoid potential misunderstandings. Of the individuals contacted, 1009 filled out the questionnaire completely (refer to Table 1), for a return rate of 18%. SPSS (version 21) was the software utilized in the statistical analyses.

Qualitative Interviews An interview guideline was devised based on the results from the online survey and practical theoretical concepts (e.g., Martens 2012). The first half of the guideline focuses on the possession, use and replacement of mobile phones. The second half covers furnishings and electronic devices in particular. The main focus of interest is on the different consumer practices in these contexts. All participants in the online survey were asked whether they would be interested in taking part in a follow-up study. A total of 692 participants expressed their willingness to do so, with 297 of them being from Vienna, Lower Austria and Burgenland, the federal states selected for the follow-up because of their geographic proximity. In the course of a selection process, incorporating both distribution criteria and the principle of chance, 72 individuals were chosen and contacted by phone; 40 of them were reached. A total

Possibilities for and Limitations to Consumer Action … Table 2 Characteristics of the interviewees

Category

73 n

%

Female

11

44

Male

14

56

18–29

6

24

30–39

6

24

40–49

6

24

50–59

4

16

60–65

3

12

Gender

Age

of 25 individuals expressed their willingness to take part in a personal interview in their own home (refer Table 2). The respective partner of the person interviewed also took part in five of the conversations. The semi-structured interviews lasted an average of 95 min and were conducted over a period of six weeks between January and March 2015. All interviews were recorded, transcribed, and then coded using the MAXQDA software.

Wishes and Expectations of Consumers The wishes of the consumers are relevant for the market economy not just with respect to which articles are purchased. What life span consumers expect a given product to have, i.e., how long they think it can actually be kept or used, helps to decide the extent to which consumers consider a repair in the case of damage, how quickly an old (but still functioning) product is replaced and whether consumers opt for a new or a previously owned product to replace the old one. Basically, most survey participants wanted the products they acquired to have a long life. A comparison of the different product groups shows that a long period of usability is striven for in the case of furniture such as desks and wardrobes. At the same time, many people are convinced that long durability rarely exists in reality, causing them to correct their wishes to more modest levels. This is illustrated in particular by the following feedback from a person who was asked how long a life span a coffeemaker should have: Infinite. But what I would say now is to name approximately the life span that would be reasonable. […] It should actually last at least for four years, that is what I think. It is bad enough that you have to buy a new one every four years. I mean, if you think about it – buying a new coffeemaker every four years, what point have we gotten to? [I23]

Therefore, it cannot be clearly stated whether the responses about the desired product life span correspond to actual preferences or were already adjusted to actual circumstances and thus turn out lower. What is clearly discernible in any case is

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Fig. 1 Desired use period versus actual life span in years. Source Own depiction. File: LifetimeLife.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

the discrepancy between the desired and the actual life span or use period of the different products (refer to Fig. 1).2 For example, the desired life span of desks averages 17.1 years, whereas they are in fact used only about 8.8 years. The difference between what the survey participants want and actual reality narrows with increasing age. One possible explanation might be that the more (negative) experiences people have, the more modest their wishes and their expectations become. Further explanations by interview partners also show how their expectation of certain products is informed by personal experiences: 2 For

each product, the analysis incorporates only those cases in which information was given both on the desired use period and on the actual life span of the product.

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The most recent experiences are what you remember. And the bad experiences, those are what you really remember. So, if it [the current coffee maker] broke after one year, the idea of a coffee maker lasting for four years would already be… [I23]

Moreover, the negative correlation between age, on the one hand, and the difference between desired and actual use period, on the other, may also have to do with the fact that older individuals use their consumer products longer in principle and thus, there is less contrast between the actual figure and what they would consider ideal. The online survey findings vividly show that consumers have frequently had the experience of digital media in particular functioning for a shorter period than expected. Conversely, those surveyed were most frequently surprised in a positive way about large household appliances. One in five survey participants spontaneously cited washing machines as products that remained functional longer than expected. Along with personal experiences, some consumers also said the price of a product is an indicator of its life span. High-priced goods are expected to function for a long time, whereas the expectations for cheaper products are lower. This means the product costs per year are implicitly estimated, and the purchase is retrospectively judged on the basis of them. If the result turns out to be below one’s own expectations, future estimates will be corrected downward. Survey participants with adequate financial resources tend to invest in quality products because of their desire not to have to deal with repair and maintenance issues for a long time, among other reasons. At lower-income levels, a purely costoriented product assessment means that cheaper products are given preference to avoid the risk of a bad investment. From an ecological perspective, this approach is quite negative. For instance, among washing machines, the potential greenhouse effect from short-lived models (with a life span of five years) is about 40% higher than from long-lasting models (life span of 20 years) (Bodlak and Gmeiner 2016). It is striking that many of the interviewees have lost their faith in the longevity of more expensive premium brands. Convinced that planned obsolescence is a widespread phenomenon, i.e., that manufacturers intentionally incorporate weaknesses in their products, many people also doubt the long life span of these products. But nowadays, I think it is no longer the case anyway that people say ‘A Miele is a Miele’ and ‘A Mercedes is a Mercedes’. Those days are gone. [...] They may charge the same money but they no longer deliver the same quality. That’s the way it is. [I18]

Apart from their own experiences with certain brands and the prices or assessments of others, consumers do not currently have many ways of estimating the life span of certain products and in many cases, invest less money (in correspondingly shorterlived products) for that reason as a precaution.

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Product-Specific Utilization Practices Beyond product life span, products are sometimes used by consumers in very different ways. The section below explains the various identifiable approaches to dealing with products and the effects these approaches have on the use period.

Type of Use In the online survey, data was collected specifically on the use of mobile phones to illuminate the correlation between intensity of use and use period. In the daily duration of use of mobile phones, clear age differences can be seen: Whereas users age 18–29 indicated themselves that they used their previous mobile phone for about 4 h 26 min a day, this period for individuals age 50–59 was a little over half that long (total average: 2 h 45 min) (refer to Fig. 2). A clearly negative yet relatively weak correlation exists between intensity of use and use period, i.e., the more frequently the mobile phone is used, the shorter the period before it is replaced. Several factors may be responsible for this trend. The greater material strain may lead to mobile phones becoming non-functional more quickly. At the same time, more intensive use also points to the great emotional importance of this product, which could also result in a mobile phone only being used as long as it adequately performs certain functions (or is up to date). The question arises as to the extent to which consumers can prolong the use period of their products by operating them carefully. Evans and Cooper (2010b) determined that the treatment given a product depends heavily on the product being used. For instance, major kitchen appliances are regularly cleaned by 42% of the consumers in the study, whereas only 15% devote the same care to their shoes.

Fig. 2 Daily time mobile phone was used in hours by age of the respondents. Source Own depiction. File: Service life day.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

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The results of this online survey show that the older and the better educated the owners of mobile phones are, the more they tend to use their mobile phones more carefully. Overall, just over half of the respondents indicated having used a protective cover on their previous mobile phone, 32.4% noting they always did and 18.9% noting they sometimes did. So, it is basically no big surprise that for the majority of mobile phone users, their previous mobile phones were outwardly in quite good condition at the time of their replacement (e.g., very few scratches). Interestingly enough, the analysis also indicates that the use of a protective cover does not have noteworthy effects on the use period of mobile phones.3 Doubts were also expressed in the interview about whether the life span of these products can actually be prolonged as a result of careful use. For instance, one respondent noted: I hope it lasts. You just never know. Nothing changes from the way you handle it, if you are careful using it. If it doesn’t work, then it doesn’t work anymore. I say, with a vacuum cleaner, with a washing machine or with whatever, I can determine myself how long it works because I operate it carefully. I am also careful using my mobile phone. You can also see this from the fact that it still works fine but if it no longer works, then there is not much more I can do or can do to prevent that. [I6]

These assumptions are underscored by the results of the online survey. Thus, there is no statistical correlation between careful overall use and the use period. The interviews reveal that careful use of a mobile phone by consumers is mostly equated with protecting the phone from being scratched or broken. In actual fact, other factors such as dealing correctly with the battery are central. To ensure the longevity of the lithium batteries, they should always be kept charged up to a level of 10–90% (AK Wien 2017). The interviews indicate, however, that few users exhibit competence when it comes to battery use (refer also to Jaeger-Erben and Hipp 2017). Users are especially careful with expensive and new devices in particular. The motivation for being careful is not just the desire for a longer use period. The interviews reveal that the possible resale value of the products is another motivation for being careful with consumer products.

Repair If products show signs of defects or damage, their use period can be prolonged by repairing them. The interviews indicate that defective consumer products are generally repaired by consumers during the warranty period regardless of how old or valuable they are. The situation is different when the warranty has already expired at the time damage occurs. With small, inexpensive products, in particular, repairs are often not even considered. Information about the possibilities and costs of a repair tends to be sought for large household appliances. 3 This analysis took into account that safety covers are utilized mainly for smart phones and mobile

phones with touch screens, which are generally used for a shorter period of time.

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Thus, the results of the online survey indicate that only one in five mobile phones undergo at least one repair before being replaced (refer to Fig. 3). In just one-third of the cases in which mobile phones are replaced due to a defect did users start an attempt to repair the phone themselves or to have it repaired. Besides the warranty period, the decision to undertake a repair depends also on how long the consumers think they can use the device after the repair. For instance, one interviewee made the following statement: So, with a washing machine and with a refrigerator where you know there is something wrong and the cost would run to more than half the price of a new appliance, well, it is hard for me to say okay, I’ll get it repaired because I just don’t know whether it will really work properly afterwards and whether that was really the problem. So, yes, as I said, if I’ve had the appliance for three years, I would also consider having it looked at and repaired but if I’ve already had it for quite a while … [I11]

Considering the basically low expectations regarding the life span of consumer products (refer to Section “Wishes and Expectations of Consumers”), this means that fewer repairs are carried out as a whole than would otherwise be the case if consumers were able to make better assessments. Thus, many interviewees think it is basically legitimate after a certain period of use to purchase a product that is up to date, i.e., to “treat themselves” to something new (refer also to van Nes 2010). Moreover, the decision for or against a repair is influenced also by the conviction that the producers intentionally shorten the product life span, as the statements by this respondent illustrate: …and after all, you know that certain things are produced to last a given amount of time because they were already producing even normal light bulbs back then […] so they would just stop working after […] a certain number of hours. [I11]

Of special interest in this context is the fact that consumers set great store by the assessments of repair people and salespeople about whether a product can be repaired. Consumers’ notions of what should be considered a normal use period are influenced if, for example, spare parts are no longer available for older devices at the time of the repair or if they are told it would be smarter to buy a new device given the age of the old one. This situation is problematic especially because, for business reasons, salespeople have little incentive to suggest a repair. Another relevant factor for consumers when considering a repair is the time it will take, i.e., how long they will have to do without the device. In Germany, for instance, half of those asked said that repairs took too long (Hirschl et al. 2003). Differences exist in how badly consumers would miss an item depending on what it is, as the following quotation from an interviewee shows:

Fig. 3 Number of mobile phone repairs per user (n = 988). Source Own depiction. File: number repairs.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

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But I would be less affected if my washing machine suddenly stopped working than if my dishwasher did. With the dishwasher, I would have to wash everything by hand and with the washing machine I would just go downstairs once a week [to the laundry room in the building] or if worse came to worse, you can wash clothes at some laundromat or at your mother’s or someplace else. You could take care of the problem that way. I won’t be carrying my dishes anywhere else, though. That’s only logical. So, as far as that goes, the washing machine affects me less dramatically than the dishwasher. [I6]

The threshold for professionally repairing a broken product rises especially if no substitute device is offered for use during the repair period and a repair is expected to take a long time. One alternative to the arduous process of sending-in the device is the option for consumers of carrying out the repair themselves. The interviews indicated that consumers appreciated the monetary savings in this approach and also the pleasure of solving problems independently. The consumers viewed their own skills as resistance against “planned obsolescence” (I4) and the “throw-away society” (I1). Not least, the repairability of a device (the degree to which individual broken parts can be accessed) and the availability of spare parts determine whether a defective device is (or must be) replaced.

Reuse Contrary to the wide-spread notion that we live in a “throw-away society” (e.g., Barr 2004; Cooper 2005), various studies show that consumer products that are replaced with others do not necessarily end up in the trash (Gregson et al. 2007). Instead, great efforts are often made to find other solutions. Thus, surveys of mobile phone users also indicate that in a period of two years after they replaced their previous mobile phone, only 3.3% of users have discarded the old device. As illustrated in Fig. 4, in most cases, the old device is kept (51.4%) or donated (17.2%). People are especially reluctant to throw away mobile phones that still work and that could be beneficial to someone else. The interviews show that the first step consumers typically take is to ask among people they know whether someone might have a use for such items. If no one does, consumers keep their old phones in their own household in case a replacement or second device is needed. Furthermore, old mobile phones often have information or data saved on them that is valuable for the users and they continue to keep the phones for this reason (refer to Fig. 5). Overall, it can be assumed that Austrian households have a large number of unused mobile phones that are still basically functional. Half of the respondents to the online survey said they had more than one such device. It is particularly striking that the mobile phones that were resold had been used for only 1.5 years prior to resale (compared to about 2.7 years for the rest of the mobile phones). One explanation is that a resale only makes sense after quite a short use period because the value of mobile phones depreciates so quickly or consumers take advantage of offers to turn in their old mobile phones for new versions for an extra

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Fig. 4 Action after a mobile phone ceases to be used (n = 988). Source Own depiction. File: EndUse.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

Fig. 5 Reasons for hanging on to mobile phones (n = 508). Source Own depiction. File: Storage reasons.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

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charge. Conversely, mobile phones that were donated were used for an especially long period (about 3 years). How easy it is for people to give away an already used consumer product also depends on the actual product involved. In the interviews, for instance, respondents emphasized the challenge they faced in getting rid of garments and items such as perfume: I cannot really get rid of them, it’s hard. I have had these things forever and I am at a loss about what to do with them. I do not really want to sell them at the flea market either because I would have to sell them really, really cheap and I know for a fact that they are not that inexpensive. […] So, I am waiting until maybe I find someone they fit really well and who really likes them so I can pass them on as gifts. [I9]

This statement shows the quandary consumers face: On the one hand, consumers feel it is important that items they themselves once used continue to be used (and enjoyed) by others; on the other hand, they have a hard time finding someone interested in taking the items (for a price). Overall, consumers exert clear efforts to prevent functional articles of daily use from being discarded prematurely, which definitely backs up the criticism Gregson et al. (2007) level against the idea of the “throw-away society.”

Factors that End the Use Period To prolong the use period for articles of daily use, it is important to determine the reasons why products are replaced at a given point in time. This section delves into three central motivations for ending the use of an item.

Product Defects First, the factual usability (life span) of a product co-determines how long it is used. However, it is not the complete failure of central product functions that first leads to a new product being acquired. Even small defects can spark the need of consumers to replace a product. In the online survey, specific questions were posed on which defects prompted consumers to replace their previous mobile phone.4 It turns out that the battery is a vital weak point of this product group (refer to Fig. 6). In more than one-third of the cases involving defects, respondents cited multiple reasons for replacing certain products. Thus, the interviews also underscored that certain products continue to be used despite defects. However, in such cases, special offers (e.g., free mobile phone upgrades in exchange for contract renewal) can encourage a replacement purchase to be carried out. 4 Multiple

answers were possible.

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Fig. 6 Defects prompting a mobile phone to be replaced (n = 305). Source Own depiction. File: Defects.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

Fig. 7 Reasons for purchasing mobile phones (n = 988). Source Own depiction. File: Procurement reasons.png, Fig.-type: dash-fig., Color (ACTUAL): 1c, Color (SHOULD): 1c, Image rights: Mandl, Imprint rights: Not necessary, Notes publisher/typesetter

Perceived Aging of Products Sometimes, an existing product is replaced with a new one even when the old device is not defective. According to the online survey results, however, an average of only about 12% of the respondents stated that they (also) sold their previous mobile phone in order to be up to date (refer to Fig. 7). Other purchase reasons were cited more frequently (e.g., 84.3% said “So I am accessible by phone”).5 This suggests the conclusion that consumer products (such as mobile phones) are largely bought to 5 Multiple

answers were possible.

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enable a certain activity to be carried out (such as phoning) and not out of a desire to own something new. The currentness of the mobile phone played a stronger role in the group of respondents age 18–29. More than one in four of them cited this as a purchase reason. This attitude may have something to do with young people often being in a phase in life where they are searching for their identity and where their desires to be socially included and recognized play a special role (Collins 2014). Standing up to certain group trends is difficult for them and they end up buying new models to draw attention to themselves or prove that they belong by presenting themselves as competent consumers. The wish to be up to date cannot only be based on the motivation to express themselves. It also comes from a desire not to lag behind and not to be viewed as outdated. Defensive consumers of this kind set store less by possessing the latest model of a product than by keeping up with the times and broadly influential trends. Purchase motives in this category are vividly illustrated by the following quotation from an interviewee who said the following when asked to assess the pressure to purchase new models: Feeling like you’re part of society. Or something. To belong. You also want to be sure of keeping up with progress or something. You don’t want to get yourself stuck on one mobile phone. Or anything else. [I21]

Conversely, enthusiasm about technical progress can play a role in wanting to be up to date all the time. This aspect can prove relevant especially with high-tech devices (such as mobile phones, monitors) where technical advances are particularly rapid. With other product categories like furniture, the desire for something new tends to grow out of wanting a change of pace. Overall, many of the interviewees were convinced that they used their articles of daily use longer than other people did. This was especially true of mobile phones: Whereas the survey results revealed that the actual use period for this product was 2.7 years, most respondents estimated it to be 1–2 years. In other words, the respondents assumed that they used their mobile phones longer than other people did. Consumers’ feelings of being outdated or of lagging behind trends are reinforced by various (targeted) measures. One cogent factor here is the frequent introduction of new models of a product group regardless of whether actual comprehensive (technical) improvements were able to be achieved (Spinney et al. 2012; Winer 1997). If new versions of a product constantly appear on the market, the value of the consumer products currently being utilized is systematically depreciated (Cooper 2010; van Nes 2010). Against this backdrop, 40% of the respondents to the survey said they felt at the time they bought their new mobile phone that the one they had previously been using was outdated. This comes as no big surprise. Defensive consumers, in particular, perceive the rapid pace of product innovation as a burden, feeling constantly compelled to buy new versions of certain products in order not to be seen as being behind the times.

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Media and advertising communicate and reinforce the various campaigns and offers. The elaborate staging and hype around new product advances by the media prove effective in this context. Social pressure on consumers therefore increases in that the value of their current products is continuously depreciated. All this creates a consumer environment in which fast replacement rates are deemed normal (Collins 2014). The online survey results show that the percentage of people who replace their mobile phone in exchange for a contract extension is rather small, at 23%. However, this group uses their mobile phone for a significantly shorter time than the use period of mobile phones of people who do not accept this offer. In other words, the use period is shortened by these types of offers but only in a limited number of cases.

Moves The use period for home appliances tends to be longer, the longer a household lives at the same place, a fact also underscored by similar studies (Grewal et al. 2004; Tippett et al. 1978). The online survey data indicates a strong correlation between moves and use period especially for wardrobes, sofas, stoves, washing machines and refrigerators, but this correlation is evident for small home appliances and digital media, as well. This latter finding is especially interesting in that these items are basically easy (or easier) to transport. As grounds for replacement, various reasons are cited in the interviews. The new home often lacks space for old items and in some cases, items are left behind, too, as a result of separations. At the same time, people see a move in many cases as an opportunity to discard old furnishings and to redo everything they way they want it (so it all matches). An interplay of different reasons are at work, as the following quotation illustrates: [Some pieces of furniture were not taken along] …because there just wasn’t room here and […] because everything was not that nice anymore or this or that door no longer worked properly. Then someone said I had no choice but to discard things, to a large extent it was because of constraints, however. I would say, after all, you have a little more room in the house, rooms and areas available, than in this two-room apartment. [I2]

Interviewees tend toward more durable furniture if they plan to live in a certain place for a longer period of time. The trend in newly signed leases in Austria6 indicates an increase in limited-term leases (Baumgartner 2013). Trends like these can contribute to a shorter use period for consumer products.

6 Based

on analyses conducted by Statistik Austria, micro-census data from 2005 and 2012.

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Significance of a Longer Use Period for Consumers As explained above, durable consumer goods are often used for a shorter period of time than consumers would actually like or sometimes expect. There are a variety of reasons for this. This situation raises the question as to what consequences would arise if the use period for various goods could be prolonged. One can differentiate here between individual ramifications and those that would affect the society as a whole.

Individual Ramifications For individual consumers, the biggest advantage of prolonging the use period for durable consumer goods would in many cases be the direct financial savings they would enjoy. No current costs are incurred during the use phase of a product. This is true of furniture, for example. Assuming no (chargeable) repairs arise in the meantime, the longer pieces of furniture are used, the less expensive they become relatively speaking. Things become more complicated with electronic devices whose use entails energy costs. If they are operating all the time (as refrigerators usually are), the variable costs can be highly significant in evaluating the use period. If new, more energy-efficient devices come on the market in the interim, their greater efficiency must be included in considerations about a replacement purchase. There are aids to help decide whether a defective household appliance should preferably be repaired or replaced. They show by type of device the repair price (as a portion of the price of a new device) from which the purchase of a new device would make sense economically (e.g., EnergieSchweiz 2015). It becomes clear that the purchase of a new device is a financially better decisions than a repair in each case from a use period of eight years at the earliest (coffee makers/fully automatic, PC monitors), in most cases however, from a use period of ten years and up (ibid). Rüdenauer and Gensch (2007) arrived at similar findings, illustrating that the cost of replacing a ten-year-old refrigerator would not be recouped until after 20 years. As shown in Section “Wishes and Expectations of Consumers”, the actual use period for different durable consumer goods is far below these estimates. In many cases, consumers can save quite a bit of money by prolonging the use of devices, especially those with greater energy efficiency. The biggest beneficiaries would be low-income groups. Moreover, replacing durable consumer goods less frequently generally yields savings in time and mental resources that would otherwise be required for selecting and purchasing the products. A general increase in the use period also curbs the pressure to be up to date all the time in order not to be seen as being behind the times

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(refer to Section “Perceived Aging of Products”) and stems the excessive demands accompanying this pressure. At the same time, people are forced to do without (technical) innovations that can increase the convenience of use. For instance, consumers who use an older washing machine dispense with the function that allows the machine to be preprogrammed with a timer so the wash can be started at a certain time. In addition, an extension of the use period changes the possibilities for consumers to define themselves through the latest products and to express their identity through new purchases. The attachment to the durable consumer goods rises, which can limit the mobility and flexibility of consumers. So far, a move has been a central motivation for purchasing new items (refer to Section “Moves”). If the use period is to be increased overall, then people would have to take along everything in a move or rely on second-hand products.

Societal Ramifications Besides the individual ramifications from an extension of the use period, one must also consider the consequences for society as a whole. Consumer transactions are always accompanied by ecological burdens that can have quality-of-life ramifications in the long term. Thus, an ecological balance sheet must be drawn up for each product to record the environmental burdens posed by the product over its life cycle. “Gray energy” is taken into account in this context to varying degrees, i.e., the energy required for producing, transporting, storing and disposing of a good. One must also consider emissions (e.g., CO2 emissions, waste) as well as the extraction of raw materials (e.g., oil, rare earth elements). The individual environmental ramifications to keep in mind differ with the durable consumer good involved. To determine when a product should be replaced from an ecological perspective, the various ecological balance sheets must be compared with each other at product level (Dettli et al. 2014). One has to decide the significance or weighting to be ascribed to the various environmental ramifications (Ardente and Mathieux 2014). For instance, if one applied solely the indicator of water withdrawal, replacing an older washing machine (Class C or worse) with a new one (Class A+++) would make ecological sense after just one year (Bodlak and Gmeiner 2016). Things look differently if one considers the cumulative energy they expend, which suggests a device should not be replaced until it is about 20 years old (ibid).

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Moreover, an ecological perspective necessitates viewing equipment acquisition in a larger context. The ramifications of direct rebound and indirect rebound must also be taken into account. Even if a new device generation has greater energy efficiency, its energy consumption might be higher due to an expanded scope of performance. Or a device might be used more frequently due to its lower consumption, preventing actual savings from being achieved. All these effects occurring directly in a product context are designated as “direct rebound.” Furthermore, the savings achieved by efficiency gains in one product category may also increase consumption in other product categories (“indirect rebound”). For example, if the money saved as a result of efficiency gains goes toward acquiring new items or the use of other devices is expanded. From this standpoint, extensions of the use period can definitely also give rise to negative ecological consequences. The individual financial consequences of a prolongation of the use period outlined above are often evident immediately (e.g., larger household budget thanks to a repair of the old device rather than the purchase of a new one), whereas the ecological ramifications already described are recognizable only in the longer term and do not affect (only) those who caused them. People of limited financial means, in particular, could presumably attach little importance to this factor in connection with the purchase of new devices. Evaluations by Statistik Austria (2014a) actually show, however, that individuals in low-income households pay attention to criteria such as energy efficiency or eco-friendliness relatively, even slightly (although not significantly) more frequently than individuals in higher income brackets. For instance, about 46% of respondents from low-income households set store by these criteria for the IT equipment they bought. The figure was 44% for respondents from medium-income households and 39% from high-income households (ibid). Moreover, lower-income households purchase consumer products for their households less often across all product categories,7 a practice that can be classified as positive from a purely ecological standpoint. In terms of society as a whole, the question arises as to which effects a prolongation of the use period has on employment and on the quantity and the quality of jobs. Which effects it will have depends heavily on the things in which people invest the money they save by using items longer. Austria is a country where 70% of the jobs can be classified as belonging to the services sector (Statistik Austria 2014b). As such, it can profit especially when the capital that is freed up can be invested in services such as repairs, consulting or product service. New jobs could be created in this way and existing ones expanded. Concrete estimates about the employment effects cannot be made, however, due to the close ties between the production sector and the services sector (Scholl 2000).

7 Statistik Austria (2014a) included the following items in its analysis: TVs, DVDs, Blu-Ray players;

refrigerators and freezers; IT; other electric devices; furniture (as well as: wallpapers, paints, varnishes; cars).

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Consumer Policy Measures to Prolong the Use Period for Products Various levers are available to attain the goal of a longer use period for items of daily use. Many measures are geared to increasing the use period (i.e., usability) of goods while others address the consumption practices of individuals. The following section presents possible approaches, divided by the type of intervention involved.

Consumer Education and Information To promote the sustainable handling of resources, individuals should be trained in consumer skills at a young age, for instance with consumer education being a subject taught in schools. Various information campaigns could also help consumers better assess the financial and ecological advantages of a longer use period for products and develop an awareness of this topic. Concrete information on repair possibilities can be communicated on product information leaflets placed in packaging, as suggested by the European Economic and Social Committee (EESC 2014). Moreover, the manufacturers should be obliged to declare wearing parts unambiguously so product durability and possible repairs are more evident to consumers and so preference tends to be given to longer-lasting products when purchase decisions are made (Prakash et al. 2016). It is important in this context to avoid upsetting individuals with a flood of information and instead, develop a simple manner of presentation. Another possibility for improving the level of information consumers have is to devise labels on the expected life span, the approximate number of times the product can be used or the expected cost per year of use. This data would theoretically make it easier to compare various products in that possible cost advantages could be determined more easily at the time of purchase. Given the growing number of labels and quality marks on the market, it is difficult to assess the extent to which additional information of this kind would actually improve transparency or be noticed by consumers and applied as a decision-making criterion. To comply with the wish of consumers for integrated labels, this information could therefore be integrated in European eco-labeling, for example (Cooper and Christer 2010). The indicated life span would have to be regularly checked, however, to prevent abuse of a label of this kind to the disadvantage of consumers (EESC 2014). Furthermore, it must be assured that consumers are not restricted in their claims by data on product life span being given that is below the standards relevant under warranty law. Attention must also be paid to the fact that the labeling of the life span of products might also result in consumers tending to opt for short-lived yet very inexpensive products. This is not recommended especially in light of ecological criteria or consequences for future generations.

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An important step for improving transparency about planned obsolescence would be to collect this data centrally and to create a European monitoring body to be responsible for it (Wrbka 2015). Alternatively, companies can commit themselves to publishing statistics on regularly occurring breakdowns (EESC 2014). In this way, consumers could be informed about critical products and how they are manufactured.

Regulatory and Tax Changes Binding minimum standards would be a possible way of addressing the life span of products. They would comply with demands from the European Economic and Social Committee, which wants a system that “guarantees a minimum life span for acquired products” (EESC 2014:2). Repair costs that would be incurred would have to be borne by the manufacturer. With this approach, the expectations of consumers would stabilize in the long term. Implementing a measure of this kind is difficult, however, as universal standards would have to be created for all products of a given category. This would be a challenge especially given the fast pace of technological innovation. Another regulatory possibility would be to change warranty law in such a way that the period for the reversal of the burden of proof and the warranty obligation as a whole would be lengthened. These types of measures would be especially effective in countering planned obsolescence in the narrow sense and also bring about an upward correction in consumer expectations about product life span. From a regulatory standpoint, the EU Eco-design Directive offers another possibility for promoting a longer use period for products. It includes indicators such as a guaranteed minimum life span and the degree to which a product is modular and can be repaired, reused and retrofitted. Previously implemented regulations have paid little attention to these issues. Instead, the focus has been on implementing energy efficiency regulations (Hübner 2012). Probably the most comprehensive measure at societal level for promoting a longer use period would be a social-eco tax reform that lightens the tax burden on labor, while increasing the tax burden on natural resources. This would make services such as repairs more attractive to consumers and also create jobs in this area. Compared to other measures, these would be very challenging to implement, requiring careful consideration as to which groups are to be subjected to heavier tax burdens or lighter ones through these changes in the tax system.

Measures by Companies Lengthening manufacturers’ warranties would positively affect the trust users have in the life span of products (Murthy and Djamaludin 2002). In terms of costs, this step would entail relatively little expenditure for companies, as most defects occur

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at the beginning or at the end of the life span anyway (Cooper 1994). An expansion of the warranty would also promote the purchase of used goods, as it would alleviate concerns that used products would not remain operable for long. The interviews show that consumers are afraid of not being able to correctly assess the functionality especially of used electronic products and therefore have to rely on assessments by others. For instance, one interviewee made this statement: No, I would never buy a used mobile phone. Unless someone puts down in writing: ‘I bought this phone to extend my contract and it is unused.’ Yeah…and then only if I have an accounting charge handy, because as it turns out, a mobile phone nowadays no longer holds up for even two years anymore. So, today it is essential that you have proof of a warranty. [I1]

In addition, EESC (2014) recommends that companies simplify the possibilities for repairing their products. For instance, individual technical parts must be integrated in such a way that they can be removed and replaced trouble-free if they become defective. In addition, suitable spare parts should be provided for a longer period of time and a set of repair instructions helpful to consumers should be included in the delivery. From the manufacturers’ side, services such as repurchase agreements or repair offers could also help to prolong the use period (Bodlak and Gmeiner 2016). Another important step would be to have companies limit measures that promote short replacement purchase rates. One example is advertising that depicts consumers who do not use the latest products as being old-fashioned and behind the times. A prolongation of the use period would yield competitive advantages for companies, allowing them to cite especially durable products to set themselves apart from their rivals and to strengthen customer loyalty. Companies can incorporate product life span in their ecological balance sheets and utilize the promotional value of conducting business in a sustainable way.

Consumers in the Circular Economy: Conclusions and Outlook The results of the underlying study provide deeper insights into difficulties consumers face that can be obstacles to their changing to a circular life style. For instance, there are high demands when it comes to the life span for products, yet there are reasons that lead consumers to keep their expectations very low in this regard. In assessing what a “normal” use period might be for them, consumers are influenced, for instance, by the messages conveyed in advertising. Depicting individuals who own older versions of a product (e.g., a mobile phone) as “old-fashioned” or “behind the times” is clearly an obstacle to a longer use period. Moreover, a (negative) effect comes from marketing strategies that make an “upgrade” to the latest product version appear economically sensible after only a short period of use. Manufacturers can adversely influence the life span or use period of products by reducing their quality (also in terms of repairability and the availability of spare

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parts). The same effect is achieved with short product launch cycles that reduce the value of existing products. As described above, mobile phones are generally resold earlier based on this strategy than they otherwise might be. Overall, this situation leads to consumers adopting various ways of thinking or acting that run counter to a long use period: • preference of new products over used ones • little willingness to pay a higher price for quality products • less motivation to have defective products repaired Younger consumers with a low level of education and income, in particular, use their articles of daily use for a shorter time than other groups do. All in all, one aspect that was not observed is the often proclaimed “throw-away mindset” that prompts consumers to discard their durable consumer goods with ease in order to stay up to date at all times. As explained earlier, it was found instead that consumers exerted great efforts to delay the final discarding of still functioning items (e.g., by passing them on to other people). Conversely, an oftenheard accusation leveled against companies is that they limit the longevity of their products intentionally to prompt consumers to acquire new products more frequently (keyword: “planned obsolescence”). The accusations on both sides (throw-away society vs. planned obsolescence) do not do justice, however, to the complexity of the use period or the life span of durable consumer goods. These approaches refer solely to factual actions, but attention must also be paid to what perceptions accompany them and to which factors support the underlying attitudes. The expectations that the players involved have of the life span of durable consumer goods influence how they deal with them. For example, stories about planned obsolescence can also contribute to consumers lowering their expectations about the life span of products and viewing earlier replacement purchases as legitimate. At the same time, the myth of the “throw-away society” on the part of producers also ensures that shorter service lives are assumed and that sales targets are geared to those assumptions. It is important to note the type of messages that are conveyed, because they help to shape the perceptions of what is normal. As presented above, there are different players and measures that can help to prolong the use period and the life span of consumer goods. Considering their orientation toward growth logic, it seems illogical at first glance for companies to promote sufficiency (Brown and Vergragt 2016; Lorek and Fuchs 2013). But it is precisely this type of marketing that offers companies a way of assuming responsibility for society and thereby setting themselves apart from rivals in a credible way. In the process, they can tap into new target groups and strengthen their ties with customers (Fricke 2015). Through digitalization, entrepreneurs are privy to detailed information about the needs of potential customers. They can use this data to offer individualized products that consumers gladly use for long periods (Gossen and Schrader 2018). At the same time, it is important not to ignore the context in which people engage in consumer practices. For instance, forced geographic mobility (e.g., due to a lack of job offers, a shortage of affordable housing, limited-term leases) can cause consumer

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products to be utilized for a shorter period (because they are replaced at the time of a move). The EU Commission package of measures on the circular economy is an important step in the right direction. It is intended to address the growing overload on our eco-system and to enable a good life for future generations as well (Ghisellini et al. 2016). The actual implementation of this kind of economic model is only just beginning, however. Current regulations on the circular economy at EU level are less radically oriented than they are geared to existing structures and growth logic. In many cases, technical innovations and recycling are relied upon more heavily than reuse and continued use, i.e., the prolongation of the use period for products (Ghisellini et al. 2016). At present, the Eco-design Directive in particular offers an approach that motivates manufacturers to design their products so they are more durable and can be repaired and retrofitted. The actual application of the directive is lagging behind, however, and is geared mainly toward improving energy efficiency. Civil society is trying to fill this gap with local initiatives such as repair cafés. For comprehensive effects to unfold, however, we need clear legal regulations of the kind long demanded by BEUC, the umbrella association of European consumer protection organizations. Restoring consumer trust in the life span of products requires improvements in information and in legal protection as well as support for enforcing the latter. Designing consumer and economic processes in a sustainable manner poses a complex challenge in which the issues on the use period for durable consumer goods outlined in this paper also play a central role. The extent to which approaches involving the circular economy can help to expand this type of economy in the years ahead will depend heavily on the earnestness with which it is made reality on European and national level and what role and rights will be given to consumers in this regard.

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Representatives of Science

Slower Cycles: An Essential Characteristic of the Circular Economy Tim Cooper

Origins Our relationship with material resources is unsustainable. Annual global use of materials has more than tripled over the past forty years, from 27 billion tonnes in 1970 to over 92 billion tonnes in 2017. Moreover, the rate of growth has been accelerating and a United Nations report warned that the figure could reach 184 billion tonnes by 2050 (International Resource Panel 2017, 2019). This chapter explores the case that, in order to address the threat that this would pose to the global environment, strategies to achieve a circular economy must accord product longevity as much importance as recycling. Some fifty years ago a fear that some of the Earth’s finite resources were ‘running out’ was among the concerns that motivated environmental campaigners. In the influential report The Limits to Growth, in which a computer model was used to explore whether economic growth was sustainable, one of the key variables was the depletion of non-renewable resources (Meadows et al. 1972). As an economics student in the 1970s, I recall a seminar at which the report was discussed, alerting me for the first time to possible tension between economic and environmental goals. At this time, however, most economists did not recognise environmental constraints to economic growth as significant. Many still do not. Only after graduating did I come across dissenting economists such as Kenneth Boulding, Hazel Henderson and Herman Daly. Boulding, an economist influenced by systems theory, wrote an influential essay in which he described the economy of the future as ‘closed’ and compared it with Earth as a spaceship “without unlimited T. Cooper (B) School of Architecture, Design and the Built Environment, Nottingham Trent University, Nottingham, England, UK e-mail: [email protected]

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reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy” (Boulding 1966: 7). The need for ‘continuous reproduction of material form’ was later taken up by advocates of industrial ecology, who argued that industrial systems need to reflect the inherent circularity of ecosystems and that, in a symbiotic relationship, waste outputs from one industry should be used as inputs for others. Prompted by concern at the rate of resource consumption in industrialised economies and a rising global population aspiring to high living standards, Frosch and Gallopoulos (1989: 146) explained the industrial ecology vision: “Materials in an ideal industrial ecosystem are not depleted any more than those in a biological one are; a chunk of steel could potentially show up one year in a tin can, the next year in an automobile and 10 years later in the skeleton of a building. Manufacturing processes in an industrial ecosystem simply transform circulating stocks of materials from one shape to another.” Recognition of the need for a ‘closed’ system of production was a shared thread in such thinking. Thus, wrote Boulding (1966: 2): “In a closed system, the outputs of all parts of the system are linked to the inputs of other parts. There are no inputs from outside and no outputs to the outside; indeed, there is no outside at all.” Likewise, Frosch and Gallopoulos (1989: 149) used the life cycles of plastics, iron and the platinum group metals to explore how “the inputs and outputs of individual processes are linked within the overall industrial ecosystem. This linkage is crucial for building a closed or nearly closed system.” Although most economists paid little attention to such thinking, Herman Daly, an economics professor who had worked in the Environment Department of the World Bank, proved an exception. Daly’s idea of ‘steady-state economics’ built upon the work of Georgescu-Roegen who, drawing upon the concept of entropy, argued that as natural resources degraded irreversibly when used in economic activity, the Earth’s carrying capacity was bound to decrease as its finite stock of mineral resources was extracted and utilised (Daly 1977). In the 1980s, Daly’s writings provided scholarly support for the critical view of economic growth adopted by many environmental campaigners and subsequently influenced the development of ecological economics. An important, if less radical, perspective was adopted by environmental economists Pearce and Turner (1990), who drew public attention to the ‘open’ linear economy construct used in modern economics and called for a transition to a closed, circular economy. One other initiative during this period is worth noting: a comprehensive study by the OECD, Product Durability and Product Life Extension, which sought to consider “the contribution that extended product life can make towards reducing the waste management and other environmental problems of member countries and towards savings of primary materials” (OECD 1982: 7). The report assembled the prevailing research evidence relating to product longevity and made some important recommendations, such as calling for longer and more stringent warranties, but appears to have been quickly forgotten.

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Recycling and Consumption In 1993, after 15 years as a construction industry economist, I was appointed a researcher at the New Economics Foundation (NEF), a think tank known for innovative thinking that had been formed in 1986 to develop the ideas and policies needed for a more sustainable economic system. My remit was to instigate a research study on energy and materials conservation. Shortly after starting, I came across an article in The Ecologist in which Simon Fairlie (1992: 280) wrote: “Recycling offers business an environmental excuse for instant obsolescence and consumers an environmental excuse for increasing their consumption.” Support for recycling was, at the time, regarded by government, industry and campaigners as the litmus test of environmental commitment; consequently, such questioning of industry’s motive presented an interesting challenge. Concerned at the prospect of “continual and ever-expanding throughout,” Fairlie argued that “it is to perpetuate the ethos of disposability that large corporations have embraced the recycling scenario with such enthusiasm.” Criticising environmental campaigners, too, he questioned “why so many greens should elevate recycling to a position where it is used to promote environmentally exhausting activity and justify the production of shoddy goods … Overconsumption cannot be remedied by recycling waste” (Fairlie 1992: 282). In the late 1980s, there had been a groundswell of interest in ‘green consumerism.’ Environmental criteria were increasingly used in marketing to sell products and consumer guidebooks sold in vast numbers (e.g. Elkington and Hailes 1989). Energy efficiency, reduced toxicity and recyclability were promised in order to allay concerns about the environmental impacts of consumption. During the 1990s, however, a divide became increasingly apparent between proponents of eco-efficiency and sufficiency: the former tending to focus on reducing the impact of products, the latter on reducing the level of consumption (Cooper 2005). While it was agreed that recycling offered a more resource-efficient means of producing new goods, there was a dispute over whether, by itself, it would lead to a significant reduction in resource consumption or even, in keeping with the Jevons paradox, result in an increase (Polimeni et al. 2009). Meanwhile, public debate on waste in the 1990s focussed on a dispute between advocates of energy recovery and recycling, even though the importance of waste reduction had been recognised in the 1975 Waste Framework Directive (75/442/EEC). This state of affairs was only resolved when the Directive was revised (2008/98/EC) and established a definitive priority order known as the waste management hierarchy: prevention, preparation for reuse, recycling, (energy) recovery and disposal. In the meantime, NEF decided to address the need for the government and industry to take a new strategic direction. The key message of our report, Beyond Recycling, was that public debate needed to be refocussed on the upper two levels of the hierarchy and, in particular, should address product longevity as a means of reducing waste (Cooper 1994). The report achieved national media attention in the UK, although little changed in public policy until much more recently.

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The Inadequacy of Closing the Loop The need to increase recycling and, where possible, to ‘close loops’ has long been accepted due to the environmental benefits: recycling generates secondary materials through a process that generally consumes less energy than extracting and refining primary materials (Worrell 2014), conserves finite resources for future generations, avoids the damage caused by toxic mining waste, and reduces waste that is either incinerated or ends up in landfill. Even so, a recent study concluded that the global economy is currently only 9% circular; in other words, just 9% of the 92.8 billion tonnes of minerals, fossil fuels, metals and biomass that enter the economy are ‘cycled resources’ as distinct from ‘extracted resources’ (Circle Economy 2019). Merely increasing this proportion would not lead to sustainable global economic development because demand for materials is rising due to the increasing global population and economic growth. A strategy of material efficiency aimed at reducing the demand for materials is needed, with four elements: longer lasting products; modularisation and remanufacturing; component reuse; and designing products with less material (Allwood et al. 2011). A circular economy strategy focussed primarily on recycling thus has serious limitations. Even aside from the ever-increasing global demand for materials, the recycling process, while preferable to resource extraction, has negative environmental impacts. Each stage of the process—collecting discarded products, sorting and disassembly, processing material, and the subsequent manufacture and distribution of new products—requires resources (e.g. industrial equipment, vehicles, energy), and disassembling and processing the used products may release toxic materials that were previously locked up. Moreover, satisfactory quality may only be achievable by mixing virgin material with recycled material, and certain materials cannot be recycled at all. ‘Open loop’ recycling, in which used products are recycled into other (perhaps lower grade) types of product, is less ideal than ‘closed loop’ systems but may be more feasible. Finally, although the efficiency of current recycling systems could be substantially improved, they inevitably suffer flaws such as losses through contamination (Worrell and Reuter 2014; Allwood 2014; Graedel and Reck 2014). In short, recycling offers only a partial solution to unsustainable global materials consumption. The term ‘circular economy’ is self-evidently concerned with recycling and much discussion focusses on this vital, but only partial, dimension of circularity. Somewhat unfortunately, use of the words ‘closing the loop’ in the title of the European Commission’s initial circular economy strategy, Closing the Loop—An EU Action Plan for the Circular Economy (COM/2015/0614 final), reinforces this. The recovery of materials from discarded products for use in manufacturing new products represents only one element of a circular economy, as demonstrated in the butterfly diagram promoted by the Ellen MacArthur Foundation (2015). This widely used image shows several other forms of loop: maintain and prolong, reuse and redistribute (including sharing), and

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refurbish and remanufacture. The first of these may more appropriately be described as ‘slowing the flow’ rather than ‘closing the loop.’ Indeed, the circular economy is increasingly understood as requiring not only measures that enable materials to be recovered and reused (e.g. design for disassembly, improved recycling infrastructure) but those that increase their physical durability. Durability differs from longevity. Durability refers to the period during which a product will continue functioning as intended and withstand ‘wear and tear’ or decay before it is defective and irreparable (Cooper 2010a). In practice, the concept is meaningful only with the caveats “under normal conditions of use” and “without excessive expenditure on maintenance or repair” (Cooper 1994: 5). Longevity is a broader concept, describing the period during which a product is in use. Longevity will be influenced by durability but also by a wide range of other variables, including economics (e.g. the cost of repair and, for some products, energy consumption), user attitudes and behaviour (e.g. emotional attachment to products), and technological change (e.g. new types of product or features). In the context of public policy, the parameters of longevity are significant and merit careful attention. For example, what minimum lifetime for products should be tolerated? The debate on whether product lifetimes are being deliberately curtailed (i.e. planned obsolescence), initially prompted by Packard (1960), has been revived in recent years, as discussed below. What lifetimes might be considered reasonable, and what lifetimes do people expect—reasonable or otherwise? The answers to such questions are important in framing or interpreting sales law concerning what constitutes satisfactory quality and in determining the length of guarantees. How might secondary markets affect product lifetimes? As many discarded products are functional, perhaps policymakers should focus more on promoting reuse than increasing durability. Lastly, what is the environmentally optimum lifetime? From an environmental perspective, the optimum lifetime of energy-using products (e.g. motor vehicles, boilers and electrical appliances) may be affected by trends in energy efficiency. The case for moving from a linear economy to a circular economy is typically made in the context of material flows: reducing the consumption of non-renewable resources and the generation of waste. As materials embody energy derived from fossil fuels, however, it may also be made on the grounds of reducing energy consumption. A lower throughput of materials in the economy will result in reduced greenhouse gas emissions and help to mitigate climate change. Thus an NGO (nongovernmental organisation) report on the ‘guiding pillars’ for a circular economy noted: “More durable and reusable products and materials will result in … better retention of the embedded energy of products” (European Environmental Bureau et al. 2015).

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Interest in Product Longevity Interest in product lifetimes within the context of the circular economy has been prompted by various factors. One important driver is the sheer amount of waste being generated in industrialised countries and needing to be managed. Consequently, the revised Waste Framework Directive (2008/98/EC) requires each member state to publish a waste prevention programme. In the UK, in stark contrast with previous waste strategies, which focussed on recycling and incineration, the programme identified a need to design products “with longer lifetimes, repair and reuse in mind,” societal benefits in the form of “increased choice in consumption models … and extension of product lifetimes,” and the prospect that “choosing products with longer lifetimes” would enable consumers to “save money” (HM Government 2013: 3, 11, 45). The programme noted WRAP’s Sustainable Clothing Action Plan, which includes guidelines on designing clothes for longevity (Cooper et al. 2013), and an equivalent plan for the electrical goods sector, the need to encourage second-hand markets, and the potential for longer guarantees and alternative business models. The UK Government’s evidence base was informed by the first comprehensive research on product lifetimes to be commissioned by Department for Environment, Food and Rural Affairs (Defra) (Environmental Resources Management 2011), which included a series of life-cycle assessment (LCA) studies that confirmed the overall environmental benefits of product lifetime extension. This report for Defra also identified a range of potential policy measures, although most were disregarded and not included on the UK’s waste prevention programme. A report on the circular economy by the Green Alliance (2011), a UK think tank, accurately described longer product lifetimes as an ‘emerging’ theme in policy debate at this time. Across Europe, the need to use resources more efficiently was increasingly recognised, and product longevity was seen as integral to this. In its Communication document Roadmap to a Resource Efficient Europe (COM/2011/0571), the European Commission indicated that it would take measures “to boost the material resource efficiency of products” by addressing durability and reusability, as well as recyclability, and by expanding the scope of the Ecodesign Directive to non-energy-related products. The European Parliament subsequently passed a resolution, Resource efficiency: moving towards a circular economy (2014/2208(INI)), which called for “a well-thought-out product policy that increases products’ expected lifetime, durability, reusability and recyclability” and urged the Commission “to develop measures against planned obsolescence and to further develop a set of product standards for the circular economy, which include refurbishment and repair.” In preparing its circular economy strategy, the European Commission reassessed its product policy, which addresses the environmental impact of products through the Ecodesign Directive, energy labelling, the EU Ecolabel and Green Public Procurement. The focus of the first two had been energy efficiency, but greater awareness of the role of increased product lifetimes in reducing environmental impacts has led to change. Thus in 2013 a provision in the Ecodesign Directive (2009/125/EC) which

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allows “extension of lifetime” to be used as a parameter for improving the “environmental aspect” of products was applied to vacuum cleaner motors and hoses (European Commission 2013a). Extension of lifetime can be expressed through a minimum guaranteed lifetime, minimum time for availability of spare parts, modularity, upgradeability and reparability. The European Commission’s circular economy strategy states that in a circular economy “the value of products, materials and resources is maintained in the economy for as long as possible.” While much media attention and public debate focused on the strategy’s recycling targets, significant attention was given in the strategy to product longevity; for example, it confirmed that the Commission will “promote the reparability, upgradability and durability of products” and “consider proportionate requirements on durability and the availability of repair information and spare parts” in future work on the Ecodesign Directive. Moreover, it promised a labelling system for energy-related products that will “allow for the displaying to consumers of information on the environmental performance, including durability, of energy-related products.” Subsequently, in order to aid implementation of the strategy, the European Commission (2018) funded a mixed-method behavioural study on consumers’ engagement in the circular economy. This generated some important insights; for example, it found that “durability information, presented in terms of years or usage units, increases consumer willingness to pay more for a more durable product” (European Commission 2018: 72). The EU Action Plan also indicated that the Commission would “prepare an independent testing programme under Horizon 2020 to help the identification of issues related to possible planned obsolescence.” As noted above, planned obsolescence has attracted particular concern in recent years; the European Economic and Social Committee’s proposal for “a total ban on products with built-in defects designed to end the product’s life” gave the debate added impetus (EESC 2013). In France, the Government passed an Act in 2015 that made planned obsolescence—defined as a range of techniques through which a product has its life intentionally reduced by a producer in order to increase its replacement rate—an offence punishable by a substantial fine and two years’ imprisonment (European Parliamentary Research Service 2016). Subsequently, the European Commission announced the aforementioned study on what it renamed ‘premature’ obsolescence, recognising businesses’ sensitivity to use of the term ‘planned’ (Longmuss and Poppe 2017). Concern about planned obsolescence has been especially evident with regard to mobile phones. In 2018 the Italian competition authority, AGCM, used legislation on unfair commercial practices to fine Apple and Samsung on the grounds that software updates had slowed the performance of older phones, “causing serious malfunctions and … thus accelerating phones’ substitution” (Guardian 2018). Apple received an additional fine for failing to give customers clear information about essential characteristics of lithium batteries in its iPhones “including their average life expectancy” (ibid).

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Research and Policy Developments A substantial increase in research activity on product lifetimes has been apparent in the academic community in recent years, reflected in the biennial series of PLATE (Product Lifetimes and the Environment) conferences (Cooper et al. 2015; Bakker and Mugge 2017). The inaugural conference took place in 2015 in Nottingham and subsequent events, held in Delft and Berlin, saw significant growth, with around 100 academic papers presented at the latter. Research in product lifetimes has covered a range of areas, including measurement techniques and historic trends, design approaches, user experience, consumer behaviour, business strategies and public policy. Certain industry sectors, notably electronics and clothing, have attracted particular attention. Increased attention has also been given to product lifetimes by the policy community and a wide range of policies for increasing product lifetimes has been identified, with different options for implementation (regulatory, market-based and voluntary) that could be used according to political preference and circumstance (Cooper 2010b). In the period running up to the launch of the EU Action Plan NGOs issued a joint statement which called for policy measures for increasing product durability and reparability (FoE Europe et al. 2015), along with individual statements (e.g. BEUC 2015; European Environmental Bureau 2015; RREUSE 2015a, b). Subsequent to the launch, momentum was maintained through a report commissioned by the European Parliament’s Committee on Internal Market and Consumer Protection (IMCO) which considered a range of policies on product lifetimes and compared them in terms of cost, feasibility (legal, cultural and technical) and overall societal benefit (Montalvo et al. 2016). This report in turn led to MEPs passing a resolution on ‘A longer lifetime for products: potential benefits for consumers and companies’ (2016/2272(INI)), which called on the European Commission to act in the following areas: designing robust, durable and high-quality products; promoting reparability and longevity; operating a usage-oriented economic model and supporting SMEs and employment in the EU; ensuring better information for consumers; measures on planned obsolescence; strengthening the right to the legal guarantee of conformity; protecting consumers against software conformity. Approval of this resolution represented an unprecedented recognition by a parliamentary institution of the importance of the topic and the need to address public concern, although the European Environmental Bureau (2017) criticised the use of voluntary measures. In its response, the European Commission (SP/2017/619) reaffirmed that durability and reparability would be considered in implementation of the Ecodesign Directive, noted that European Standardisation Organisations were developing generic standards to underpin criteria for circular design (including durability, upgradeability, ability to repair and facilitate reuse) and reaffirmed its commitment to consider reparability and durability information in future energy labelling measures. This was followed by a significant national initiative in the form of a report, Strategies against Obsolescence, by the German Environment Agency (2017), which

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presented a comprehensive overview of policies categorised by type of instrument, method of implementation and actor. Beyond Europe, the United Nations Environment Programme (UNEP) commissioned a report that proposed a multitude of recommendations on the opportunities available to consumers, businesses and governments—of both developed and developing economies—to address product lifetime extension (Bakker and Schuit 2017). Lastly, the report by the European Commission (2018) on consumer engagement in the circular economy proposed policies to strengthen pro-environmental attitudes and awareness, make repair easier, create financial incentives for reparability and durability, and make durability and reparability information available at the point of sale. Collectively, these publications demonstrate a marked development in policies for the circular economy that would slow cycles and not merely close loops. Two areas that merit more detailed examination are discussed below: (i) consumer expectations, information and labelling, and (ii) product standards, guarantees, maintenance and repair.

Consumer Expectations, Information and Labelling Data relating to product lifetimes is increasing but is still very limited. For example, it is sometimes assumed that consumers are dissatisfied with how long products last and that product lifetimes are in decline. In the UK, however, recent research has suggested that consumers may be less dissatisfied than supposed. A survey asked over 2200 consumers about their satisfaction with the lifetimes of products in eighteen categories (consumer durables and semi-durables), using a Likert scale. In all categories more than three-quarters of respondents indicated that they were ‘satisfied’ or ‘very satisfied’ with product lifetimes. Most other consumers reported that they were ‘neither satisfied or dissatisfied,’ perhaps indicating that their experience was mixed: satisfied with some products but not others. Only a small proportion indicated that they were ‘dissatisfied’ or ‘very dissatisfied,’ the highest being in the small household appliances and footwear categories (Gnanapragasam et al. 2017a). As these findings were somewhat unexpected, the researchers considered possible explanations in the form of historic trends and consumers’ expectations. For example, one reason for a relatively high level of satisfaction might be that, contrary to common assumptions, product lifetimes have not declined or, if they have, the decline has been made acceptable by cheaper prices or improved technology. Unfortunately, it is difficult to gather reliable data on historic trends in product lifetimes and very few studies exist (Oguchi et al. 2010). A study in the Netherlands by Wang et al. (cited in Bakker et al. 2014) indicated that between 2000 and 2005 the lifespan of most domestic appliances and consumer electronics declined, but the period of study was short and an economic boom may have affected consumption patterns. A study in Germany by Prakash et al. (cited in German Environment Agency 2017) similarly suggested a downward trend. It identified a decline in the ‘first useful service life’ of appliances and found the proportion of large appliances replaced due

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to technical failure within the first five years of use to have more than doubled between 2004 and 2012, from 3.5% to over 8%. On the other hand, a study in Japan, which used three measures of historic change, concluded that the lifetimes of home appliances, electronics and cars have increased in recent decades (Oguchi and Daigo 2017). Whatever the historic trend, the level of consumers’ satisfaction is liable to be related to their expectations. If expectations have fallen, of which there is some evidence (Gnanapragasam et al. 2017b), then dissatisfaction is less likely to arise. Knowledge about consumer satisfaction has important practical implications: little purpose would be served if manufacturers increased product durability but consumers were unwilling to pay for the additional quality, or the frequency of replacement remained unchanged. This suggests that policymakers need to encourage consumer demand for longer lasting products alongside any introduction of measures to increase their durability. In doing so, they need to be mindful that consumer attitudes to product longevity vary within Europe: asked to identify three factors that they considered when purchasing an item such as a washing machine or fridge, longevity was cited by 62% of consumers in Finland but only 27% in Bulgaria (European Commission 2014). One means of increasing demand for longer lasting products might be to label products in a way that indicates their anticipated lifetimes. A Eurobarometer survey found that although 60% of EU citizens feel informed about the lifespans of the products they buy, well over a third (38%) do not (European Commission 2013b). Most (92%) want lifetimes to be labelled (ibid). This is hardly surprising, of course, and attention has since been given to the nature of any such label and whether consumers might be willing to pay a higher price for products designed for increased longevity. For some products, such as refrigeration equipment, the metric for such a label might be years, but in cases where the frequency or intensity of use is variable, such as washing machines, cycles of use would be more appropriate. Interest in providing consumers with access to better information on product lifetimes led the European Economic and Social Committee (EESC 2016) to explore whether ‘lifespan labelling’ might influence consumers’ purchasing decisions. Experimental research was undertaken in four EU regions on nine products using four types of label: one showed lifespan in years or months, the second showed ‘useful lifespan in terms of cycles, page yield, etc.,’ the third showed cost per year, while the fourth was similar to energy labels, with a scale from A to G. The experiment suggested that such labels would influence purchasing decisions in favour of products with longer life spans: on average, sales of products with a label showing a longer life span than competing products increased by nearly 14%, and this influence occurred regardless of the price of products. Another behavioural experiment, by the European Commission (2018), found that the provision of durability information led consumers to be nearly three times more likely to choose products with the highest of four levels of durability. It also indicated their willingness to pay a premium for additional durability. In a survey in England and Wales, around one half of respondents said that they would be willing to pay more for a fridge, washing machine or vacuum cleaner with a longer advertised lifetime, and over 80% if this was supported by a

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longer guarantee (Knight et al. 2013). Together, these findings suggest that labelling could prove an important means of communicating information on product lifetimes to consumers. Such labels would imply some form of legal redress if a product failed during the relevant period, however, and discussion is thus linked to another strategy: the use of longer guarantees.

Product Standards, Guarantees, Maintenance and Repair The use of guarantees as a means of encouraging a shift to longer lasting products has long been recognised. For example, the aforementioned report by the OECD (1982: 78–79) noted the potential benefits of “significantly longer and more stringent warranties” and called for further investigation into “the justification for limiting the extent of the company’s liability,” although no significant action followed. More recently, a study by the European Parliament’s Policy Department for Citizen’s Rights and Constitutional Affairs expressed concern that the Consumer Sales and Guarantees Directive (1999/44/EC) provides a limitation period for legal guarantees that makes sellers only liable for the lifetime of products for two years (although longer periods apply in certain member states). Moreover, after six months the consumer has to prove lack of conformity at the time of delivery (Tonner and Malcolm 2017). The study proposed a period of three years in each case, although MEP Pascal Durand, who drafted the report for the European Parliament debate on product lifetimes, proposed a limitation period of five years. Other approaches have been advocated. One is the adoption of a minimum standard for durability, setting a floor to prevent unduly short-lived products from entering the market. This could be introduced through the Ecodesign Directive, using implementation measures (as in the aforementioned case of vacuum cleaners and lighting), or regulatory action on planned obsolescence such as that introduced in France. Another approach would be the introduction of a label to grade products according to durability and repairability, based on a scoring system. In 2017, the European Commission’s response to the European Parliament debate on product lifetimes indicated that it intended to study the possibility of a ‘reparability score’ that could encompass the availability of spare parts, access to technical manuals, ease of disassembly and quality of after-sales repair services. Further, it noted that in future such a score could be extended to incorporate other, related aspects of environmental performance such as durability, ease of remanufacture, recyclability and recycled materials content. The Commission is already committed through its energy labelling framework regulation (2017/1369) to undertake a technical, environmental and economic analysis of the possibility and cost of providing consumers with information on the durability of energy-related products “in coherence with the objective to promote a circular economy.” One issue that has attracted particular attention in European policy debate on product longevity is repair. The level of repair activity has long been in decline in the UK (Cooper and Salvia 2018) and a similar downward trend has been observed in

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France (European Commission 2016). Nonetheless, a survey found that over threequarters (77%) of EU consumers try to repair broken goods rather than to buy new ones (European Commission 2014), while research by the European Commission (2018) concluded that consumers’ experiences of repair services are not as negative as sometimes reported, although they are discouraged from attempting repairs if even minor additional effort is required compared with purchasing a replacement. Interest in the potential for an increase in repair activity has grown in recent years, particularly in the consumer electronics and clothing sectors. In the former, cracked mobile phone screens have become symbolic of faults considered to be unduly costly to repair. One response from users has been to seek to repair products themselves, resulting in the growth of Repair Cafés (Charter and Keiller 2018) and a sizeable, home-based, online repair community (Wiens 2018). This has sometimes proved problematic because independent repairers and users have not been granted access by manufacturers to the necessary technical information, tools and spare parts, leading to concern that regulations might favour authorised repairers rather than Repair Cafés, independent repairers and users (European Environmental Bureau 2019). In the case of clothing, the loss of repair skills has raised concern (WRAP 2017), leading the authors of a parliamentary report on sustainable fashion in the UK to propose that lessons on designing, creating, mending and repairing clothes be included in the school curricula (Environmental Audit Committee 2019). While studies have demonstrated how some consumers exert considerable effort in prolonging product lifetimes (e.g. Gregson et al. 2009), other consumers fail to undertake basic maintenance practices. Little academic research has been undertaken in this area, although a UK study revealed that in the case of vacuum cleaners, maintenance tasks are mainly triggered by personal perceptions and habits rather than manufacturers’ instructions, or indicators on the machine. A survey found that many owners do not regularly check whether the brush head is free from hair and dirt, and wait until a machine stops working rather than responding to unusual noises or smells. Some undertake no maintenance at all (Cooper et al. 2019).

Increased Product Lifetimes and the Economy Sustainable development demands that an economy is circular by design, but the speed at which products, components and materials pass through each cycle of use is of critical importance. “Throughput is by no means a desideratum, and is indeed to be regarded as something to be minimized rather than maximized,” wrote Boulding (1966: 8). Product lifetimes will reflect the economic priorities of governments and the business models used by companies. In both cases, current norms are deeply embedded. Despite long-established criticism of GDP (Gross Domestic Product) as a suitable indicator of progress, most governments treat economic growth as an overarching policy priority and have yet to develop a strategic long-term economic vision consistent with a substantial reduction in material throughput. Politicians evidently fear

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that reduced expenditure on consumer goods would impact negatively on investment and employment. Similarly, most companies operate a business model based on a fast throughput of goods, which is assumed to be a necessary response to the demands of the market, particularly in sectors subject to fashion and technological advance. Although critics argue that there are potential environmental benefits to be gained from a shift in the product/service mix, from goods to services (e.g. business models based on rental or sharing, or products with long term after-sales service support), such practices remain at the margin. A recent academic paper proposed a ‘sufficiency-driven business model,’ in which resource consumption is moderated, but concluded that “legitimate questions remain over how far industry can be expected to pursue sufficiency models independently” due to the influence that the economic system exerts upon business practices (Bocken and Short 2015: 60). The authors concluded that sector-based policies, such as minimum product lifetimes and warranties, and wider reform of the economic system, including an emphasis on well-being rather than economic growth, are required to facilitate appropriate business models. Very little research has been undertaken on the potential effects on the economy of an increase in product lifetimes (Cooper and Qasim 2019). The aforementioned European Parliament IMCO report (Montalvo et al. 2016) explored the economic benefits of maintenance, repair and rental services, and concluded that they might increase the value added to products, thereby increasing EU competitiveness and there might be an improvement in the trade balance, but that the likely effect on jobs was uncertain. The report also noted a small number of studies that have sought to quantify the economic gains of a more circular economy in terms of economic growth and jobs. The knowledge base remains weak, however, despite a need to understand important issues such as the possibility of a rebound effect in the circular economy that could offset potential environmental benefits (Zinc and Geyer 2017). This was recognised in the European Commission’s Roadmap to a Resource Efficient Europe (COM/2011/0571), which warned “in some cases, cost savings made from improving the efficiency of a technology can actually induce people to consume more. This phenomenon, known as a ‘rebound effect’ must be anticipated, and accounted for, in developing policy and setting targets.” The economic issue that has attracted most attention has been the employment potential of reuse and repair, these being labour-intensive activities. A European study concluded that by 2025 over 265,000 jobs could be created in furniture and textile reuse, with a further 480,000 in recycling (European Environmental Bureau 2014), while a UK study estimated that in 2013 the circular economy accounted for around 460,000 jobs—180,000 in repair, 148,000 in rental and leasing, and 134,000 in waste and recycling—and predicted that its development could add between 200,000 and 500,000 jobs by 2030 (Green Alliance/WRAP 2015). The case for environmental tax reform (i.e. reducing taxes on labour and increasing taxes on materials and energy) is often argued on the grounds that it would encourage a more sustainable economy (Ekins and Speck 2011). This is exemplified by repair and reuse, which are labour-intensive activities, as such reform would lower the relative cost of activities that prolong product lifetimes. Significantly, in a survey almost a half

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of EU consumers (47%) reported that they had chosen not to have a product repaired during the previous year because the cost was too high (European Commission 2013b). Another example of tax reform aimed at encouraging longer product lifetimes is the decision of the Swedish Government to reduce VAT on repair work to bicycles, clothes or shoes from 25% to 12% from 2017, and to enable people to claim back from income tax half of the labour cost of repairs to household appliances. Other suggestions for tax reform include reducing employment-related taxes, raising tax on irreparable, short-lived or ‘disposable’ products, and differentiating VAT rates based on guarantee length (Cooper 2010b).

Conclusion Only a decade ago, there was little interest in product lifetimes within either the academic or policy community. Much has changed, and during the past five years there has been substantial progress towards an appreciation that the lifetime of consumer goods is a key element in the circular economy debate. ‘Closing the loop’ through the recovery and recycling of materials is self-evidently a prerequisite for a circular economy, but ‘slowing the flow’ is equally essential for adequate progress to be made towards sustainable development. Slowing product replacement cycles, however, demands more fundamental change than closing loops. Recycling could be increased with relatively little effect on consumption patterns. Changes in waste collection and management systems, product standards such as a minimum recycled content requirement, and redesign to increase recyclability through ease of disassembly are well-established measures that would involve relatively minor changes in production and consumption. By contrast, strategies to increase product lifetimes may challenge the norms of government, industry and consumers. Governments will be concerned about the implications for economic growth of a slower throughput of material goods. Companies may not be convinced that new business models based on longer lasting products with long-term after-sales service support will enable them to maintain their revenue. Consumers may fear that they will lose access to the most technologically advanced products and wonder whether longer lasting products will be affordable. Legislation against planned obsolescence, minimum standards that prevent shortlived products from being placed on the market, labels to inform consumers about durability and reparability, and longer guarantees collectively provide evidence that product longevity is firmly on the European policy agenda. Such policies alone will not suffice. In order to move from a throwaway culture to a culture of durability, a transformation is required within education and in economic management. These are bigger, but urgent, tasks.

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Circular Economy: Slowing Resource Flows and Increasing Value Nancy Bocken

Why Slow Consumption Is Needed in the Circular Economy Current global consumption levels coupled with steady world population growth, and the current state of the climate and world require urgent responses (Chu and Majumdar 2012; IPCC 2018).The Circular Economy—an alternative paradigm to our take-make-dispose linear economy to keep products, components, and materials at their highest utility at all times though extension of product lifetimes, as well as recycling (Geissdoerfer et al. 2017)—represents an alternative sustainable development pathway. The Circular Economy is often seen as a panacea for sustainability issues (Geissdoerfer et al. 2017). There is indeed great opportunity in retaining the value of products rather than destroying the value after just a few product uses, or sometimes even no product use at all (e.g. when consumers buy products they later regret (Skelton and Allwood 2017; Achterberg et al. 2016). However, significantly more efforts are needed to understand how business can move to a Circular Economy and create sustainable impact (Blomsma and Brennan 2017). Product lifetimes across multiple product categories from white goods to electronics and clothing have been decreasing over time (Bakker et al. 2014). Products like clothing have become ‘disposable’ goods and systems around clothing are largely linear leading to increasing amounts of waste (EMF 2017). To illustrate, total global clothing production appears to have doubled the past 15 years, while clothing use (number of wears before disposal) has decreased by nearly 40% (EMF 2018). The fast fashion sales model seems to dominate and mainstream business appears to rely on a business model of cheap and fast. Similarly, food waste has become an intensifying problem (WRAP 2018). Roughly one-third of the food produced annually in the world for human consumption gets lost or wasted (FAO 2018) and in developed

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countries over 40% of losses happen at retail (e.g. due to quality standards that overemphasise appearance) and at the consumer level (FAO 2018). Furthermore, even considering increased energy efficiencies of devices and appliances, refrigerators bought in 2011 should still be used for 20 years instead of the current average of 14, and laptops for at least 7 years instead of the average of 4, because the benefits of reuse would outweigh benefits in energy efficiency (Bakker et al. 2014). Different models that break through the marketing-driven constant need for consumption, novelty, and aesthetics are necessary. And, according to a 2014 European survey, 77% of EU consumers would in fact prefer to make products last longer and repair products rather than buying new ones, but the cost of repairs and the level of service available prevent them from repair and reuse leading to early disposal (European Parliament 2017). This may be due to products being manufactured cheaply using low-cost labour in developing countries, or using extensive automation, while repairs generally take place at high-cost developed country labour rates. Moreover, rapid technological change and economic pressure to create novelty and convenience rather than durability exacerbate the problem. A British Survey revealed that the vast majority of adults in Great Britain (82%) have actually regretted a purchase in the past and 2–10% of annual purchases are estimated to be ‘regret purchases’ (Skelton and Allwood 2017). Typical regret purchases fall in the ‘clothing and footwear’ and ‘takeaway food’ categories and may be triggered by offers and adverts pushing customers to buy stuff they do not need. More consumption does not typically lead to more happiness, at least not in the long-term (Druckman and Jackson 2010), and scenarios of the future require us to rethink our modes of consumption. The linear model is no longer environmentally viable, and a business case focused on cheap and fast sales with little accountability once the product leaves the factory or shop is not future-proof in many respects. New circular business models would need to incorporate strategies to slow, close and narrow resource loops, while providing a superior value proposition than the linear model (e.g. more attractive, convenient, higher levels of service). There is no easy way out or single solution from the current rather linear economic system. The sustainability impacts of resource production and use are highly interlinked. Even renewables that deliver zero-carbon energy depend on the use of critical materials and takes up precious space and land (Chu and Majumdar 2012), while land use change, climate change and changing weather patterns, as well as biodiversity loss are already affecting current production systems. Also, despite high ambitions (World Economic Forum 2018) and business and policy interests, a lot of work is needed to transform existing linear business models to ‘circular’ ones involving reuse and recycling of products (Bocken et al. 2017a). With high expectations and much at stake (Chu and Majumdar 2012; IPCC 2018), there needs to be a strong and widespread understanding of how to operationalise the Circular Economy concept. Solutions cannot solely rely on technical advances or top-down policy implementation, but also require individual responsibility and changes in consumption patterns coupled with appropriate policies and business responses. The necessary pathways to keep damaging climate change below 2 °C include fundamental changes to our consumption patterns (IPCC 2018).

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Fig. 1 Circular economy framework (Bocken et al. 2016)

Slowing consumption is a key missing link in the Circular Economy debate and in current corporate practice (Bocken et al. 2017a). Scenarios about a positive future all include changes to our current modes of consumption (Bocken et al. 2017a). To allow businesses, policy-makers and citizens to navigate and evaluate different Circular Economy, solutions, it is helpful to simplify and categorise Circular Economy options as: (1) ‘narrowing’ (2) closing and/or (3) ‘slowing’ resource loops (Fig. 1). Narrowing the loops includes strategies that reduce the amount of resources needed to manufacture and use a product, i.e. improving their energy and material efficiency. Closing loops involves strategies in order to recycle materials and components. While many businesses are already introducing these strategies, slowing resource loops, focused on making products last longer and encouraging reuse, is more challenging, because the immediate business benefits may be less evident compared to narrowing and closing loops, which create immediate business benefits through efficiencies and cost savings.

Slowing Resource Loops Slowing resource loops is about extending the use period or intensifying the use of existing products through the design of long-life goods and business models that

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support long product life, resulting in a slowdown of the total flow of resources (Bocken et al. 2016). The value of products and components is retained as long as possible. To support slower resource loops, products may be designed for longlife (e.g. reliability and durability; attachment and trust), and to support productlife extension (e.g. ease of maintenance and repair; upgradability and adaptability; standardisation and compatibility; dis- and reassembly) (Bocken et al. 2016). To slow resource loops, business models would need to take into account prolonged use over time, which design for long product life (durability; technical performance); design for product life extension (upgradability, reparability, remanufacturability); and an anti-consumerist way of selling (Bocken and Short 2016). For some product categories, e.g. those with high self-expressive purposes such as clothing and cars, design for emotional attachment may be important to ensure that people keep using the product over time (Mugge et al. 2010; Chapman 2017). However, for shared products, more standardised non-personal design might be more desirable to encourage sharing between people over time. The way of selling products also needs changing. A survey in Great Britain found that the majority of adults have regretted a purchase in the past (Skelton and Allwood 2017), which suggests that business models would need to focus on ‘sufficiency’—or slower consumption—by selling what is needed to avoid purchase regret and slow resource loops rather than unnecessary pushing a continuous demand for products we don’t want or need (Bocken and Short 2016). While this may sound counterintuitive from a business perspective, there are businesses who pursue sufficiencydriven business models, those centred around slowing consumption.

How Would a World of ‘Sufficiency’ Work in Practice? What Could Businesses Do? ‘Sufficiency’ is a business approach focused on moderating consumer demand to slow resource loops (Bocken and Short 2016). Sufficiency business models may focus on design for durability often coupled with premium pricing; extending long product life coupled with repair services and long-life warrantees; moderating sales and promotion; service models (e.g. clothing and car access rather than ownership); direct reuse (e.g. second hand), demand reduction (e.g. energy reduction), or a full life-cycle approach (e.g. simple solutions focusing on low tech, low resource solutions). So, there are various possible business model strategies for a business to make money and encourage sufficiency or slow consumption, including, for example (Bocken 2018): • Promoting quality over quantity, e.g. through higher/premium pricing to cover the full or real price of the product (including durability, life extension, repair support, etc.) • Focusing on service; Not products, such as a service model where the product is leased or provided on an ‘access’ basis (e.g. pay per use, like an hour of car usage

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or paying per wash), or, as a very specific example, Energy Service Companies (ESCOs), often part subsidised by governments, help consumers reduce their energy bills • Giving products a 2nd (and 3rd , 4th , etc.) life, e.g. through second-hand markets that encourage longer life of products, with market makers such as eBay, or companies who collect, curate, prepare and sell used products for a second or further life (e.g. furniture, clothing, electronics), online or in stores • Lower cost frugal innovations, which are simple solutions focusing on low tech, low resource solutions (e.g. the Mitticool fridge made out of clay using water as a ‘refrigerant’), but could also be reintroduced in developed country markets (Jolin 2018). Fortunately, a range of businesses have moved away from unsustainable business practices. Business solutions to these systemic issues are described next.

Promoting Quality Over Quantity Outdoor gear company Patagonia’s mission statement is to ‘Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis’. Patagonia’s CEO wrote on a blog that ‘The single best thing we can do for the planet is to keep our stuff for longer’ (Rose Marcario, CEO Patagonia). The company has been known for campaigns like: ‘Don’t buy this jacket’ in a New York Times advertisement creating awareness about the negative impacts of overconsumption (Patagonia 2011). In 2016, it donated its Black Friday sales to grassroots non-profits supporting sustainability causes calling it a ‘fundraiser for the earth’ instead (Patagonia 2019). The company promotes repair and reuse, recycling and living within planetary boundaries. In the meantime, Patagonia’s sales have been estimated to have doubled between 2010 and 2016 and some sceptics could say that’s this is part of a clever marketing ploy (although the company has won various awards/recognition for its commitment to sustainability) and that their outdoorsy relatively wealthy customers can afford to be environmentally mindful. However, Patagonia is not anomalous— a small but growing number of companies in different markets and customer segments are employing business strategies that encourage customers to ‘buy better, not newer’. https://www.theguardian.com/business/2017/mar/07/the-north-face-pat agonia-saving-world-one-puffer-jacket-at-a-time. From umbrellas, to knives, water bottles, bags, socks, teddy bears and even umbrellas, several brands are in fact offering lifelong warrantees and repairs contributing to product longevity. https://www.thepennyhoarder.com/deals/compan ies-with-lifetime-warranties/. In the furniture sector, Vitsœ’s mission is to ‘allow more people to live better with less that lasts longer’. Supported by designer Dieter Rahms offers classic and compatible designs, with is mantra ‘better, not newer’, and actively opposes planned

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obsolescence. Vitsœ created a video themed ‘against planned obsolescence’ to advocate against the ‘manufacture of products that are deliberately designed to have a limited useful life’. https://www.vitsoe.com/eu/voice/planned-obsolescence. It also does not do ‘sale’ as it encourages customers to only buy what they need and it does not create obsolete stock. Despite these seemingly un-business-like approaches, it has experienced steady growth in sales year on year, with a large part of its sales (over 50%) originating from existing customers (Bocken and Short 2016). Such companies are not pushing fashion fads but focus on classic and durable designs that people want to keep. Patagonia publishes the stories of people wearing its gear and the memories they associate with the clothes, whereas Vitsœ’s products are known to end up beyond a person’s lifetime, ending up in people’s wills (Adams 2012). The business model in these examples often focus on an initial higher price upfront, but over the lifetime of a product (taking into account reparability, warranties, etc.), the cost may work out cheaper for the customer. It also creates a long-term relation between the customer and the company, which may lead to repeat purchases and positive word of mouth advertisement.

Focusing on Service; Not Products Rather than focusing on the product, businesses can also focus on services: What are the ultimate benefits and services businesses can deliver to the customer? Michelin, for example, offers ‘tires as a service’, where customers pay per miles driven (Accenture 2014) and Philips offers ‘pay per lux’ or ‘light as a service’ where customers pay for the access to light. Heating and ventilation company Fresh-R offers ‘fresh air as a service’ including installation, maintenance and repair (Bocken et al. 2018a). Several companies are now pushing service-driven models, including examples around car sharing (e.g. car sharing services such as Zipcar and Car2Go), clothing rental (Girl meets dress and Rent the runway) and even solar panel leasing (e.g. SolarCity, now part of Tesla). Start-up MUD Jeans (www.mudjeans.eu) is the first in the world to lease jeans on a monthly basis, which can serve to make people more aware of the opportunity cost of the other clothes they own, contributing to an overall improvement in lifestyles towards sustainability. Similarly, the LENA fashion library (https://www.lena-lib rary.com) offers a library for clothes’ where you can ‘borrow your wardrobe online’. Start-up HOMIE (www.homiepayperuse.com) offers washing machines on a ‘pay per use’ basis, installing washing machines in customers’ homes for free where customers only pay for each use (laundry cycle) of the washing machine. Its differential pricing (low temperature washes are cheaper than more unsustainable high temperature ones) further supports the more conscious use of its machines. It aims to appeal to millennials not wanting to own so much stuff, roamers who often move homes, those wanting to live more sustainably as well as cost-conscious consumers wanting to control their finances.

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The customer does not own the product but has access to the benefits that the product can deliver through a service, such as car sharing or clothing rental. The focal company then takes care of maintenance, repair and refurbishment or remanufacturing and eventually recycling. Because the company is offering a service rather than a product, the service provider can take care of maintenance, repair and long product life and is incentivised to make the product last as long as possible (Tukker 2004). The customer remains ‘worry free’ as (s)he is guaranteed a certain level of service. The business model has proven to reduce the number of washes with customers, as well as reducing the washing temperature, especially for those consumers who initially washed more at higher temperatures (Bocken et al. 2018b). More innovations in financing and risk-taking with financiers would further facilitate the uptake of new service-type of business models, because the manufacturer or service provider only gains the money back over a longer period of time rather than getting the money at once in the case of a direct product sale. New financial models could support such service-driven businesses.

Giving Products a 2nd (and 3rd , 4th , etc.) Life There are several ways to prolong the life of products through maintenance and repair, refurbishment and remanufacturing. Whereas companies are starting to offer their own refurbished products at reduced prices, creating more value from the same product, in areas such as clothing (Kant Hvass 2014) and electronics (TechVise 2018), several companies, who were not the initial manufacturers or producers have started to buy up used products from consumers and are refurbishing and selling these, thus creating new markets for used products (TechVise 2018). In addition, there are ‘market makers’ for used products providing consumers with a platform to sell their used products. The company eBay has offered a consumer platform for used products for a long time, and Amazon is offering various usedproduct options (e.g. second-hand books). In the ‘offline market’, flea markets and thrift shops have been around for a long time. Internet-based platforms are now making reuse easier with companies like ThredUp, Tradesy and Rebagg, for example, making clothing reuse online easy. The most sustainable option is often to make the product last as long as possible, thus retaining the value of products. Even in energy-using goods (electronics, white goods, cars), this is often the case. Taking into account increased energy efficiencies of divided and appliances, refrigerators bought in 2011 should still be used for 20 years instead of the current average of 14, and laptops for at least 7 years instead of the average of 4, because the benefits of reuse would outweigh benefits in energy efficiency (Bakker et al. 2014).

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Lower Cost Frugal Innovations Frugal innovation is about developing affordable and simple solutions for consumers. Originating from emerging countries, which may be more resource constraint and yet have fewer wealthy consumers, it could also work as a slow resource consumption in developed countries. As argued by Radjou and Prabhu: ‘Frugal innovation is not just about doing more with less but about doing better with less. It is about creating meaningful products and services that integrate four core attributes highly valued by Western consumers: affordability, simplicity, quality, and sustainability’ (Radjou and Prabhu 2004). One example is smaller cars. Renault, for example, launched Logan, a simple lower cost sedan priced at e5,000 euros, which was initially destined for emerging markets, but became highly popular in Western Europe where, due to the recession cost-conscious consumers had begun seeking affordable products that deliver greater value for money (Radjou and Prabhu 2004). This success triggered the launch of more entry-level cars for Renault, which have become the company’s cash cow, representing over 40% of the auto company’s global sales in 2013. This type of product is said to yield greater than average due to a strict no-discounts retail policy, plus, from an environmental perspective, a smaller car is offered, which would use less resources, and in this case, 95% of the components are recyclable (Radjou and Prabhu 2004). In addition to product innovations, other ‘frugal innovations’ may be found in the space of the sharing economy, where people share products, cars and homes, making better use of existing resources and encouraging better use of space and products (Jolin 2018).

Better—Not Newer All examples are focused on the design and use of products that are better (not newer) and last a long lifetime. The idea is that: ‘The single best thing we can do for the planet is to keep our stuff for longer” (Rose Marcario, CEO Patagonia). From a legislation perspective, producers and consumers should be incentivised to ensure that products will last as long as possible, through durable product design as well as encouraging reuse, maintenance and repair. Recent reports have looked into potential EU regulations to trigger enhanced durability, reparability and recyclability of products (Maitre-Ekern and Dalhammar 2016). As a forward-looking example, France has adopted a law sanctioning ‘planned obsolescence’: the creation of products pre-designed for failure so that consumers will be enticed to replace them (HoP 2018). The law makes intentionally shortening of product life spans to induce more sales illegal, with fines of up to 5% of annual turnover and jail terms of up to two years (Gibbs 2018). As a business example, consumer electronics company Apple has faced severe criticism for slowing down customers’ phones as their batteries age (by sending

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software updates ‘to preserve battery life’), which caused governmental as well as consumer concern about planned obsolescence (Gibbs 2018). French regulators opened an investigation into the issue (Gibbs 2018) and other countries such as China and Italy have followed suit (Mickle and Grind 2018). Next to design for longevity and reparability and possibly, lifelong warrantees, access to spare parts at reasonable prices as well as access to appropriate repair information could be mandated more profoundly in legislation (Maitre-Ekern and Dalhammar 2016). This could be part of improved Extended Producer Responsibility (EPR) policy—a policy strategy that emerged in Europe in the early 1990s to achieve various goals: creating incentives for eco-design, leveraging expertise to achieve public goals, internalising the costs of waste management into product prices, and shifting the financial burden of waste management from municipalities and taxpayers to firms and consumers (Lifset et al. 2013).

Future Business Efforts: Experiment and Collaborate To make ‘circular businesses’ more mainstream, the pursuit of circular business model innovations, focused on slowing, closing and narrowing resource loops, is necessary. Within such business models, experimentation is needed with concepts such as slowing consumption and sufficiency to create absolute reductions in environmental impact (Wells 2018), for example, in the case of a car sharing business: How many cars did it help take off the road and were former cars replaced with more sustainable options? What were the absolute carbon emissions reductions associated with this business model? Changing dominant business models in established business may be challenging: it changes the main model of operation of an organisation and key building blocks of a business (e.g. sales channels, supplier networks) (Chesbrough 2010; Osterwalder and Pigneur 2010). Furthermore, due to a short-term profit focus and immediate market pressures there may be inaction towards climate and resource issues (Slawinski et al. 2017). Consequently, companies do not necessarily have the capabilities to develop new business models, despite the importance for competitiveness (Teece 2018) and Circular Economy transitions (Bocken et al. 2018a; Weissbrod and Bocken 2017). Pointers for further business efforts to advance work in this area include: 1. Start experimenting (Bocken et al. 2018a; Weissbrod and Bocken 2017) with new business models moving away from cost competition and quick sales, including service-oriented models or a focus on small reduction in short-term sales in return for longer term business model resilience. These business models would not be dependent on selling more stuff but rather on: (a) (b) (c) (d)

Promoting quality over quantity Focusing on service; not products Giving products a 2nd (and 3rd, 4th, etc.) life Lower cost frugal innovations.

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2. Collaborate (Kraaijenhagen et al. 2016; Witjes and Lozano 2016) with others to solve ‘no-brainers’ and start experimenting internally or with familiar stakeholders with the more sensitive ones (Bocken et al. 2017b). 3. Be aware of your business model impact and trace whether it lives up to its sustainability aspirations (Manninen et al. 2018), and explore the impact of your new business model in relation to other business models (Bocken et al. 2018c) (e.g. does a clothing rental model or car sharing service reduce the number of items of clothes or cars produced respectively?).

Concluding Thoughts: How Could Policies Support Slow Consumption? Moving these case studies into the mainstream would require policy support on multiple fronts to accelerate the transition. The idea of ‘slow consumption’ would need to be embedded in society, policy and markets. While policy interest there, the work on novel Circular Economy policies is still nascent (Maitre-Ekern and Dalhammar 2016). Below some pointers for policy-makers are provided (Bocken 2018): • We need a wide spectrum of intervention, ranging from nudging and changing the choice architecture (Thaler and Sunstein 2009), to new product and service offerings, and outright product bans (Bocken and Allwood 2012). • We need to continue indirect influencing—for example through information sharing campaigns about consumption and waste. • We need to create a safe space for experimentation and collaboration, which governments could also help to create. • Governments need to recognise and fight planned obsolescence, by phasing out the worst options in product categories and penalising companies who pursue premature/planned obsolescence. France for instance created the first law against planned obsolescence (Maitre-Ekern and Dalhammar 2016). • Positive reinforcing mechanisms could be introduced: policies or businesses could reward more sustainable consumption behaviour. For example, individual customers could be rewarded who proactively decide not to buy certain products or services they deem unethical and reduce their carbon footprint or tax breaks on repairs could be introduced like in Sweden. • With an enabling environment that changes customer hearts and minds and facilitates innovation, more companies might be willing to experimenting with a sufficiency-driven approach to business—the missing loop in many Circular Economy activities. Acknowledgements I would like to thank Dr. Simone Cooper-Searle for the constructive discussions on the role of slow consumption in the Circular Economy which helped shape this piece. This piece was inspired by the following article, published in German: Bocken (2018).

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Beyond the Green Economy. The Imperial Mode of Living as Major Barrier for a Circular Economy Ulrich Brand and Markus Wissen

The circular economy is an important juncture for various institutions to rethink and reorganize the economy and its relationship to politics and culture. The reuse and recycling of materials, the cascading usage of resources as well as the production of durable goods are all important mechanisms, and principles of “using over owning” link production with consumption processes and have cultural implications. The dependence from non-renewable resources and the growth-driven character of the capitalist economy could be reshaped by fostering a circular economy. For instance, the concept of a circular economy already entered into strategies of the European Commission as well as of the new Austrian government. Here, it will be important to see whether and how claims for a circular economy are able to question the overall orientation at growth, competitiveness and efficiency as well as the dominance of powerful industries to lead research and development, product innovation and market expansion. In this chapter, we contend that the realization of a circular economy will depend not only on adequate regulatory frameworks for manufacturers and consumers, but more decisively, on a wider societal transformation of the presently dominating and unsustainable systems of production and living. If this “imperial mode of living” is not challenged, initiatives for a circular economy will lead—at best—toward a certain greening of the economy in some regions and some branches without solving the deep social-ecological crisis (see Brand and Wissen 2018).

U. Brand (B) International Politics at the University of Vienna, Vienna, Austria e-mail: [email protected] M. Wissen Social Sciences at the University for Economics and Law Berlin, Berlin, Germany © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_11

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The Power of the Linear Economy Any strategy promoting a circular economy must be informed by an in-depth understanding of the social relationships between domination and power relationships which stabilize a linear economy and cause social-ecological crisis, concealing the causes of such a crisis, and is inherently contradictory, giving rise to conflict. Here, we introduce the concept of the imperial mode of living (IML). Our argument contends this concept helps us to better understand both the persistence and spread of unsustainable patterns of production and consumption that deepen the crisis and the increasingly contradictory character of these patterns. Production and consumption patterns are in principle, based on an unlimited appropriation of the resources and labor power of both the global North and the global South, and a disproportionate claim to global sinks (like forests and oceans in the case of CO2 ). Key to the functioning of the IML, or more precisely, to the imperial mode of production and living, is the normalization of invisible worldwide relationships of domination, power and exploitation. The great contradiction lies in the role of the IML in times of globalizing capitalism as achieving a “good living” for some, at the expense of others. The concept of the IML cannot be generalized in space and time: It depends on an external sphere from which it gets its resources and to which it can shift its social-environmental costs. Therefore, it is based on diverse processes of “externalization” (Lessenich 2018) and “separation”—between “valuable” (market) processes, commodities and wage-labor and “worthless” other forms of labor or nature (Biesecker and Hofmeister 2010). The effect of the IML enhances the conditions of material well-being for many individuals and collective institutions in the global North. At the same time, its stability and hegemony occur at the cost of environmental destruction and the exploitation of labor. To consider, the deeply inscribed imperial mode of living is a crucial condition for any circular economy initiative and strategy.

The Imperial Mode of Living as Basis of the Linear Economy in Historical Perspective Largely a phenomenon of luxury production and consumption until the middle of the twentieth century, the societal shift toward the IML was generalized in the global North after World War II, during the Fordist phase of capitalist development. The phenomenon grew to the extent that the “energy available per dollar earned” increased (Huber 2013, 179). Societal relations were stabilized due to their environmentally and socially unsustainable character—the spread of the automobile and industrialized food, the production and use of plastics and spatial structures that privileged the separation of the workplace, living and leisure and that required increasing mobility mediated class conflict, all came at the expense of highly unequal gender relations and destructive relations between society and nature. Fordist theory of mass production and consumption in a linear economy, and accompanying social compromises

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and stable welfare institutions, became an attractive proposition in the societies of the global North. The nation state played a major role in constituting and stabilizing the IML by not only externally securing access to strategic resources, but also internally guaranteeing a certain living standard of the masses through social insurance systems and labor market regulations. Social hierarchies were stabilized through uneven distribution of means and the spread of an understanding of “wellbeing” that was founded on income and (status) consumption, as well as respective subjectivities and criteria of individual “success.” The IML also became relevant and attractive in some countries of the global South that had fast-growing economies and emerging middle classes since the 1950s. Prominent examples include Argentina and Uruguay, later, with the oil boom, Venezuela, Mexico and Indonesia. Modes of production and consumption that became, and are still becoming, hegemonic in certain regions or countries can be generalized globally through “capillary” processes—meaning in a broken manner and with considerable gaps in time and space. These processes are closely aligned with corporate strategies and interests in capital valorization, trade, investment and geo-politics, as well as societal discourse in the global North about “modernity” and a “good living.” “Generalization” does not mean that all people live alike, but rather that certain, deep-rooted concepts of “good living” and of societal development are generated and reflected in the everyday life of a growing number of people—symbolically but also materially. The “post-Fordist” process of capitalist globalization, starting in the 1970s and accelerating after 1990, is largely founded in fossil resources and energy regimes. It reproduces itself through diverse hierarchies and forms of inclusion and exclusion. Furthermore, since the 1980s, the IML has increasingly spread beyond the upper classes of the global South to their middle classes. These developments are a key to understand what has been called the “great acceleration” in the Anthropocene debate (Steffen et al. 2011; see also Schaffartzik et al. 2014).

New Perspectives on Unsustainability The explanatory value of our concept in informing the debate about strategies and obstacles of a circular economy can be seen in the following points (cf. in more detail Brand and Wissen 2018, 2021): The IML helps us to better understand why it is so difficult to challenge the dominant logic of unsustainability—despite the politicization of the ecological crisis at national state level and the board rooms of global transnational corporations. The IML is deeply embedded in political, economic and cultural relations and secures socioeconomic well-being and status to those who benefit from it a promise to all who aspire to it. Here lies a major obstacle for any development toward a circular economy.

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The IML also has the effect of making the ecological crisis more acute, while simultaneously makes it “processable” in a socially and spatially limited way. The normality of the IML acts as a filter to any awareness of the crisis and as a channel for its management. At least in the global North, the ecological crisis is primarily perceived as an environmental problem and not as a comprehensive societal crisis. This promotes a certain form of public politicization tending toward the catastrophic. The crisis is posed as disaster caused by “humankind” or “human civilization” entering the “Anthropocene” by ignoring “planetary boundaries.” Such a perspective hides the root causes—capitalist, imperialist and patriarchal dynamics—of the crisis and related power relations by presumptively putting everybody in the same place. This is what Lövbrand et al. have criticized as the “post-social ontology” of the Anthropocene discourse—it emphasizes the human dimensions of environmental change but tells us very “little about societal dynamics” (Lövbrand et al. 2015, 213). The IML sheds light on the increase in productivity and material prosperity upon which the capitalist and world resource system depends, as well as the international division of labor that favors the global North (Hornborg 2010). Whereas in the global North, the IML has contributed to safeguarding social stability—for example by helping to keep the costs of the reproduction of labor power relatively low—it provides a hegemonic orientation of development in many societies of the global South. Finally, the concept of the IML contributes to the explanation of rising right wing and authoritarian politics. One can understand the social and political right as a force that aims to stabilize the IML. Authoritarian populism draws its strength not least, from proclaiming that it is able to defend the (threatened) privileges of the middle class and to protect the working class from further social losses. It does so, not by addressing the root causes of the social inequality, but by turning a social contradiction that is deeply rooted in the class structure of capitalist societies into a spatial conflict between natives and strangers. Those who intend to migrate to countries of the global North do so because their living conditions have been destroyed by the IML. They simply cannot, or are not willing, to bear this anymore. Instead, they want to participate in the certain wealth and stability the IML has brought to large parts of the global North. The promise to keep these people with their fears and desires beyond the borders of the developed capitalist countries and to exclusively stabilize a mode of living against the claims of those who are no longer willing to just bear the latter’s cost, strengthens the extreme right.

What the Imperial Mode of Living Adds Our argument contends the prospect of a circular economy is blocked by the IML and its structures which prevent ecological transformations. The IML is strongly rooted in society in the contradiction between capital and labor (that is intrinsically gendered and racialized). The need of most people to sell their labor power is not only a constitutive element of capitalism but also forces people toward the IML

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because the production processes which generate their incomes and the availability of the commodities they need for everyday life depend on the unequal appropriation of nature and labor power on a world scale. At the same time, the IML creates opportunities, enhances mobilities and constitutes a central mechanism for social compromise. It links people from different parts of the world in unequal ways and connects the biophysical conditions between particular regions, in search of exploiting nature and its elements as “natural resources” to the world market. The concept of the IML can thus contribute to an explanation of why there is an urgent need for sustainable transformations (Görg et al. 2017) and why the realization of a circular economy is so difficult. Moreover, it contributes a better understanding of the articulation of a globalizing political economy and its political structures in the everyday practices of firms, state organizations and ordinary people, their wishes and aspirations. It also explains the increasing discomfort with the unsustainability of social and international developments and the search of many people, progressive politicians, entrepreneurs and civil society actors for alternatives. The question of what the IML contributes is closely linked to the transformative potential of alternative social practices, i.e., the fact that people just do things differently (Jonas 2017)—and through this are promoting a circular economy. Brangsch (2015) argues that changing practices or habits—and enabling such changes through institutional and infrastructural framework conditions and societal discourses, or even narratives of good living—as well as the unlearning of other practices or habits constitute the core of a progressive social-ecological transformation (see also Groves et al. 2016). However, these changes must be combined with a strategic critique and politicization of dominant practices and their institutional and infrastructural conditions. Recently, this can be observed in the transformation of mobility patterns in cities like Berlin where increasingly more people travel by bicycle and thus enhance the pressure against a car-centric urban transport infrastructure. Additionally, cyclists also organize themselves as a political force; i.e., they deliberately politicize institutions and infrastructures that favor cars and disadvantage bicycles. This “interplay of unintended consequences of individual actions and the deliberate strategies of transformation” (Wright 2010, 300) constitutes an important factor for overcoming the IML. Finally, the most difficult question posed is how sustainability transformations can be enabled and promoted, and the role played by of visions, strategies and initiatives of a circular economy. Alternative political strategies must not be reduced to only lowering CO2 concentrations, solar energy subsidies and large-scale environmental technologies. Instead it must be asked, how are the specific relations of people and of society to nature shaped? Many experiences do already exist and should be enforced. In the concluding chapter of our book (Brand and Wissen 2017), we sketch the “contours of a solidary mode of living.” We call for the creation of tangible alternatives in niche markets and groups to foster experiments. Progressive sustainability transformations require a comprehensive transformative perspective, i.e., among other things, strategies for and politics of a weakening of powerful actors and discourses;

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a different understanding of well-being beyond ecological modernization and the green growth imperatives; linkages to debates, initiatives and politics, for example, around labor, welfare and patriarchy. This is the context whose shaping is key in promoting a circular economy as part of a larger social-ecological transformation. Acknowledgements This text is an adapted version of our article “What Kind of Great Transformation? The Imperial Mode of Living as a Major Obstacle to Sustainability Politics,” in: GAIA 27/3 (2018): 287–292, https://doi.org/10.14512/gaia.27.3.8.

References Biesecker, A., & Hofmeister, S. (2010). Focus: (Re)productivity. Sustainable relations both between society and nature and between the genders. Ecological Economics 69(8), 1703–1711. Brand, U., & Wissen, M. (2017). Imperiale Lebensweise. Zur Ausbeutung von Mensch und Natur in Zeiten des globalen Kapitalismus. Munich: oekom. Brand, U., & Wissen, M. (2018). The limits to capitalist nature: Theorizing and overcoming the imperial mode of living. London: Rowman & Littlefield International. Brand, U., & Wissen, M. (2021). The imperial mode of living. Everyday life and the ecological crisis of capitalism. London: Verso. Brangsch, L. (2015). Entwicklung, Revolution, Reform und Transformation. In M. Brie (Ed.), Lasst uns über Alternativen reden. Beiträge zur kritischen Transformationsforschung (pp. 130–147). Hamburg: VSA. Görg, C., Brand, U., Haberl, H., Hummel, D., Jahn, T., & Liehr, S. (2017). Challenges for socialecological transformations: Contributions from social and political ecology. Sustainability, 1045 Groves, C., Henwood, K., Shirani, F., Butler, C., Parkhill, K., & Pidgeon, N. (2016). Invested in unsustainability? On the psychosocial patterning of engagement in practices. Environmental Values, 25(3), 309–328. Hornborg, A. (2010). Uneven development as a result of the unequal exchange of time and space: Some conceptual issues. Journal für Entwicklungspolitik, 26(4), 36–56. Huber, M. (2013). Fueling capitalism: Oil, the regulation approach, and the ecology of capital. Economic Geography, 89(2), 171–194. Jonas, M. (2017). Transition or transformation? A plea for the praxeological approach of radical socio-ecological change. In M. Jonas & B. Littig (Eds.), Praxeological political analysis (pp. 116– 133). London: Routledge. Lessenich, S. (2018). Next to us, the deluge. Cambridge, UK: Polity. Lövbrand, E., Beck, S., Chilvers, J., Forsyth, T., Hedrén, J., Hulme, M., et al. (2015). Who speaks for the future of Earth? How critical social science can extend the conversation on the Anthropocene. Global Environmental Change, 32, 211–218. Schaffartzik, A., Mayer, A., Gingrich, S., Eisenmenger, N., Loy, C., & Krausmann, F. (2014). The global metabolic transition: Regional patterns and trends of global material flows, 1950-2010. Global Environmental Change, 26, 87–97. Steffen, W., Persson, A., Deutsch, L., Zalasiewicz, J., Williams, M., Richardson, K., et al. (2011). The anthropocene. From global change to planetary stewardship. Ambio 40(7), 739–761. Wright, E. O. (2010). Envisioning real utopias. London: Verso.

Ulrich Brand was born in 1967 in Konstanz, Germany. Since 2007, he is professor of international politics at the University of Vienna, Austria. Since 2017, he is member of the Scientific Advisory Board of the Institute for Advanced Sustainability Studies (IASS) in Potsdam.

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From 2018 to 2019, he was senior fellow at DFG research group on post-growth societies at the University of Jena. His areas of interest are imperial mode of living, multiple crises of liberal globalization, social-ecological transformation, Latin America. Markus Wissen was born in 1965 in Neuwied, Germany. Since 2012, he is professor for social sciences at the Berlin School of Economics and Law (HWR). In 2018, he was senior fellow at DFG research group on post-growth societies at the University of Jena. Since 2014, he is member of the editorial board of PROKLA. Zeitschrift für kritische Sozialwissenschaft. His areas of interest are imperial mode of living, social-ecological transformation, (auto)mobility, labor and ecology.

The Energy, Resource and Lifestyles Transitions Go Hand in Hand: Insights from the meetPASS Project Andrea Frank-Stocker, Katy Shields, Friedrich Hinterberger, and Martin Distelkamp

Introduction Some 30 years ago Friedrich Schmidt-Bleek called for a tenfold improvement in industrial resource efficiency (“Factor 10”). In other words that industry should seek to reduce the amount of land and materials used, per unit of output, to a tenth of prevailing levels. Yet current trends indicate we are far from achieving that goal. From the 1970s until now, global resource use and economic output, as measured by GDP, have grown in step, both roughly trebling in just over 40 years. While there has been some relative “decoupling” of CO2 emissions—which have “only” doubled in the same period— current patterns of resource use undermine any progress (see chapter “Economic Futures. The Circular Economy Surfs a Wave of Change. But Can It Be Part of Changing the Wave? What Is Implied by the Slogan “Regenerative by Design?”). Indeed, in the past two years, greenhouse gas emissions have shown signs of an uptick, linked in part to the increase in deforestation, desertification and methane emissions associated with the extraction, agricultural and livestock industries. The outlook, should current trends continue, is grim: according to a scenariomodelling analysis as part of the meetPASS1 (Frank-Stocker et al. 2018), under a business as usual (BAU) scenario, the global economy is expected to almost double again by 2050 (+85%), with resource use rising by 60%. These resource flows are a major factor in global climate change as well as the dramatic decline in species. 1 The project meetPASS was funded by the Austrian Climate and Energy Fund as part of the “Austrian Climate Research Programme—ACRP 9th Call”.

A. Frank-Stocker (B) · K. Shields · F. Hinterberger · M. Distelkamp Sustainable European Research Institute SERI, Vienna, Austria e-mail: [email protected] F. Hinterberger e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_12

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As a result, global carbon emissions could rise by another third, or to twice the level required to have a reasonable chance of keeping global warming to below 1.5 °C above pre-industrial temperatures (see more, below). The analysis shows that a successful climate policy is not possible without a “dematerialisation” strategy—a substantial reduction in resource use. And within that, the transition to a circular economy plays a central role as a means to conserve and preserve energy, materials, land, and to prevent pollution. A circular economy means an economy “in which material flows are either made up of biological nutrients designed to re-enter the bio-sphere, or materials designed to circulate without entering the bio-sphere” (UNEP 2012). It is therefore vital that it is understood in the broadest terms: i.e. not just “a bit more recycling”, but a chance to improve resource efficiency by many factors. This article summarises the global as well as EU-wide effects of a COP21compatible scenario, developed within the meetPASS project with the primary intention to limit the rise of the global average temperature to no more than 1.5 °C above pre-industrial levels. This scenario also includes important elements of a circular economy, such as measures to reduce the input of virgin resources, reduce the throughput of materials, and decrease waste. The rest of this article is laid out as follows: in the next sections, we discuss the climate and sustainable development goals in more detail and what a BAU Scenario would entail. We then turn to the assumptions and key findings of the meetPASS analysis as regards the required energy, resources and lifestyle transitions.

The Challenge: Reaching Climate and Environmental Goals In December 2015, all 196 members of the United Nations Framework Convention on Climate Change adopted the Global Agreement on Climate Change (Paris Agreement) at the COP21 meeting in Paris (UNFCCC 2015). The Paris Agreement aims to keep the increase in the global average temperature well below 2 °C compared to pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C. Doing so means reducing net greenhouse gas emissions to zero by the middle of this century. The latest report from the Intergovernmental Panel on Climate Change (IPCC), the climate science body of the UN, raised the stakes yet further. The report indicates that in order to limit global warming to 1.5 °C above pre-industrial levels, humanity may only emit an additional 580–770 gigatonnes (Gt) of CO2 , and with a probability of success of just 50%. Even for this 1.5 °C increase, scientists expect considerable negative consequences, which increase sharply as the temperature rises (IPCC 2018). In order to reach the 580–770 Gt target, emissions would have to decrease to about 1.0 tonne per capita by 2050. That is a reduction to about one-fifth of current levels. In the EU, which currently emits some 8.0 tonnes per capita, the required reduction is even greater.

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So far, decarbonisation strategies have focused mainly on improving energy efficiency and on promoting electricity from renewable energy sources. However, in order to reduce the physical scale of the global economy, climate policy needs to be broadened to promoting higher resource productivity, with the aim of decreasing the overall material consumption. Behrens (2016) points out that more than two-thirds of annual raw material inputs return to the atmosphere in the form of greenhouse gas (GHG) emissions. The rest represents solid waste and additions to stocks, e.g. in the form of buildings and infrastructure. These figures indicate a direct physical relationship between the quantity of raw materials used in industrial processes, the energy required and, hence, GHG emissions (Behrens 2016). We suggest to set the limit for global material consumption at 45 billion tonnes TMC,2 in order not to overshoot the earth’s safe operating space.3 Formulating a per capita target based on the absolute target of 45 billion tonnes TMC would lead to a maximum of 5 tonnes per capita of material use with an expected world population of 9.7 billion people in 2050. We use this target of 45 billion tonnes TMC and 5 tonnes per capita to evaluate whether the assumed resource policy fulfils its purpose. Furthermore, land-use changes are crucial for climate policy. Native vegetation and soils store plentiful carbon and their losses due to agricultural expansion— together with emissions from agricultural production—account for 20–25% of greenhouse gas emissions (Dumas 2018; Edenhofer 2014). Furthermore, agriculture is responsible for over 90% of global water stress and biodiversity loss (IRP 2019). We use the planetary boundary target to limit cropland expansion to 15% of the global ice-free land surface (Rockström et al. 2013). With a world population of 9.7 billion people in 2050, this amounts to a cropland footprint of 0.15 ha per capita. In the industrialised regions like the EU, the current cropland footprint surpasses this level. Thus, meeting the target will change agricultural practices as well as diet, such as reducing meat and dairy intake (see more, below). The proposed material and cropland targets are based on the results of the EU project POLFREE4 and the IntRESS project5 for the German Federal Environment Agency.

2 Total material consumption (TMC) measures the total amount of materials required for domestic

consumption. It is a measure of all direct and indirect primary material extractions, both at home and abroad, which are associated with economic activity. 3 The safe operating space ensures the functioning of the Earth system and its subsystems. Rockström et al. (2013) have defined nine planetary boundaries that effectively represent a “safe space” for human habitation, based on the idea that many subsystems of Earth react in a nonlinear way and are particularly sensitive around threshold levels of certain variables. When the variables pass those thresholds, rapid and unpredictable environmental changes might produce dangerous results, compromising the ability of the planet to support human societies in their present form (Rockström et al. 2013). 4 See http://polfree.seri.at/. 5 See www.intress.info.

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Business as Usual Is Not an Option The business as usual (BAU) scenario represents a world in which the historically observed dynamics and behaviours of the different actors will not change in the forecast period. This does not mean that the global energy, economy and environment system will not change by 2050. But the dynamics of these changes and their interdependencies will continue based on historical observations. As regards policy interventions, the model implicitly assumes that non-market-based instruments (regulations or voluntary agreements) will continue to develop as they did in the past. For marketbased instruments (taxes and subsidies), the general assumption of the BAU Scenario is that tax rates (on products, income, etc.) will not be adjusted in the forecast period. Currently, the global community emits approximately 34 Gt per year, or almost 4.5 tonnes per capita. If current policies and trends in land and resource use continue, CO2 emissions would rise to 45 Gt per year and around 6 tonnes per capita. Without additional measures, total emissions would increase to around twice the reasonably safe limit of 580–770 Gt, or to about 1300 Gt, by 2050 (see Fig. 1). The cumulated CO2 emissions of the European Union would be even greater (120 Gt instead of around 50 Gt) if we continue to act as usual. The growth in global population (to 9.7 billion in 2050) and livestock to feed them, along with the lack of an ambitious climate and resource policy, induces a rapid increase in demand for resources of all kinds (from fossil fuels to agricultural land). As can be seen from Fig. 2, global resource use would increase from 66 Gt today to 106 Gt by 2050, if we continue to act as now. While the material categories coal and peat, oil and gas as well as ores would remain nearly constant, there would be a substantial increase in the use of non-metal minerals. On a per capita basis, abiotic resource consumption would rise from 8.8 tonnes currently to 10.9 tonnes in 2050. Global CO2 emissions under BAU (Gt) Annual CO2 (Gt)

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Rising demand would lead to increasing resource scarcity and a rapid rise in commodity prices, which would in turn lead to higher living costs, the effects of which would fall more harshly on low-income sections of society. This could lead to a substantial increase in levels of poverty. As no efforts would be made to reduce the consumption of fossil fuels (beyond market dynamics in response to price increases), the global emissions trajectory leading would set the world on course for at least 3 °C of warming. As such an increasing incidence of climate change-related events, along with conflict over scarce global resources, would definitely exacerbate economic and social strife (IPCC 2018).

Three Transitions Needed to Meet the Climate and Sustainable Development Targets In order to reach the goals derived in chapter “History of the Circular Economy. The Historic Development of Circularity and the Circular Economy”, we defined a meetPASS Scenario representing a world in which the Paris Agreement transforms into ambitious climate policy action around the world. The policy measures included in this scenario support three transitions indispensable for meeting the climate and sustainable development targets: an energy transition, a resource transition and a lifestyles transition.

Energy Transition Central to this goal is an increase in CO2 prices, rising gradually to reach 200–240 EUR per tonne by 2050. This is a tenfold increase compared to the 20 EUR per tonne price under the European Union’s existing Emissions Trading Scheme (EU ETS). Moreover, the price would have to be set globally (as yet, such a system does not

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exist). The later countries decide to follow such a path, the faster prices would have to rise to reach the overall target. If emissions are to reach net-zero by 2050, then virtually all electricity would also have to be produced carbon-free. The meetPASS Scenario assumes that upstream carbon taxes or a cap-and-trade system would be complemented with regulations to ensure that at least 90% of electricity is produced with renewable energy by the end of the period (and 100% of electricity within the EU). Since this would help to make wind and solar PV more competitive compared to both fossil fuels and nuclear, it also assumes a nuclear phase out in Europe by 2050 and in the rest of the world by 2060. As the power sector decarbonises, the electrification of transport can further help to accelerate the transition away from fossil fuels. Here, meetPASS assumes that a combination of policies such as vehicle emissions standards, fuel taxes and various subsidies and incentives (to offset the burden on households) would result in almost three-quarters (72%) of passenger transport in Europe becoming electric by 2050, and almost half (48%) of all freight transport. The respective numbers for rest of the world are 54% (passenger) and 36% (freight). The final element of the energy transition is greater efficiency. While a higher carbon price should encourage more efficiency overall, to shift completely from fossil fuels and offset any negative effects on households (especially where gas is used in central heating) a combination of policies to incentivise building upgrades and new building regulations should ensure that by 2050, most buildings are either energyneutral or energy-positive (generating more than they use). However, this will require significant investments, essentially doubling current innovation rates and entailing up to a 20% increase in spending (first in Europe, later elsewhere). Globally, energy efficiency in the meetPASS Scenario would increase considerably faster than in the BAU Scenario, leading to a reduction in primary energy use from around 580 EJ6 in 2018 to 310 EJ in 2050, while in the BAU Scenario primary energy use would continue to increase from 580 to 770 EJ (see Fig. 3). As Fig. 4 shows, the increase in energy efficiency in the meetPASS Scenario is even stronger in the European Union compared to rest of world, whereas in the BAU Scenario, EU energy efficiency develops broadly in-line with the global trend. However, while the global primary energy use in the BAU Scenario increases, in the European Union, it would decrease (though far less steeply than in the meetPASS Scenario), indicating a decoupling of GDP and energy use in the European Union.

Resource Transition The IPCC (IPCC 2014) emphasises that an ambitious resource policy is an important climate change mitigation strategy and a report by the International Resource Panel

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(IRP 2019) shows that without such a policy, a 2 °C or 1.5 °C climate target cannot be (cost-effectively) achieved (UNEP 2016). Core to the transition is higher virgin material prices. An anonymous survey of over 300 executives from large, global companies conducted by Newsweek ((Shields 2019) and see Box, later) found a sizable share in favour of taxes or other mechanisms to raise the price of virgin materials. Fully 40% of respondents chose “global virgin material taxes or prices” as a means of accelerating the transition to a circular economy, ranking it top among 20 proposed measures (respondents could select as many as desired). Moreover, 91% agreed with at least one of six possible tax interventions to either raise the price of carbon, materials, or other natural resources, or conversely, to lower the price of labour, repairs or recycled materials. Thus, the meetPASS Scenario foresees an upstream tax on metal ores and nonmetallic minerals, rising to 25% by the end of the period. Complemented by higher recycling targets and capabilities, by 2050, secondary materials should replace half of primary materials in production.

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As with the energy transition, taxes alone will be unlikely to achieve a sufficiently swift transition; nor is recycling (which also requires energy, water and can create pollution) the only answer to greater resource efficiency. For example, remanufacturing, whereby producers reclaim, refurbish and then resell or lease products can spare up to 99% of both materials and emissions (IRP 2019). What is important is that manufacturers have access to the right skills and expertise. Consultants’ expertise suggests that considerable raw material inputs in manufacturing could be saved if a profound and detailed information programme for fostering resource efficiency could be established (Arthur D. Little, Fh-ISI, & Wuppertal Institut 2005; Hollins 2011). In setting the parameterisation of this policy measure for the meetPASS Scenario, we incorporated findings of our earlier projects including POLFREE (Meyer et al. 2015) and the German SimRess-project (Distelkamp and Meyer 2018). Compared to these precursor projects, the assumptions for the impacts of the information programme in the meetPASS project are quite conservative (suggesting some upside potential), since: • Efficiency improvements cover only a narrow selection of 50 key technologies • Achievable improvements for each technology are rather low, at just 1% per year • The costs are rather high, taking over five years to pay off (two years for research and development expenditures, one year of consultancy expenditures and two and half years for capital expenditures). These assumptions would lead to massive reductions of material inputs (see Fig. 5), with global abiotic resource consumption (RMCabiotic ) falling from 65 Gt in 2018 to 43 Gt in 2050. In the BAU Scenario, however, resource use would increase to 106 Gt in 2050. Adding up the resource extraction over the years results in a cumulative resource use from 2018–2050 in the BAU Scenario of approximately 3000 Gt, while the cumulated resource extraction of the meetPASS Scenario is 2000 Gt. Per capita resource consumption (RMCabiotic per capita) would fall by 59% globally and 70% within the EU in the meetPASS Scenario, compared with an expected BAU Scenario (in Gt)

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BAU increase of 20% worldwide. Resource productivity—the monetary earnings for each unit of material—would also improve significantly in the meetPASS versus BAU Scenario, rising by a factor of 3 worldwide and by 4 within the EU. It is important to note that these figures refer only to raw abiotic materials. In 2018, the portion of biotic materials in total material consumption (TMC) was around 40% (IRP 2019). This implies that, should this portion stay constant over the forecast period, then the resource target of 45 Gt and 5 tonnes/capita/year of TMC would not be achieved. While further analysis of biotic materials was outside of the scope of the meetPASS project, it assumed that biotic materials would not replace abiotic materials to the extent that any material gains would be offset by great stress on biotic sources (e.g. leading to deforestation). Nonetheless, to meet the 45 Gt TMC target would require further dematerialisation measures, for both abiotic as well as biotic resources, than those included in meetPASS. Figure 6 shows the EU material footprint (Raw Material Consumption—RMC7 ) of abiotic resources on a per capita basis for the BAU and the meetPASS Scenario. Without additional measures the per capita material footprint would only reduce slightly, while policies introduced as part of meetPASS would lead per capita RMCabiotic to decrease sharply from 12 tonnes in 2018 to 3.8 tonnes in 2050. BOX: The Role of Companies in the Resource Transition If the circular economy will one day render capitalism obsolete, this begs the question of what role corporations should play in the transition. Since most of the economy is still linear today, by default, so too are the vast majority of companies—especially large corporations. Via the power they can wield over their supply chains, as well by lobbying, they can have a disproportionate

7 Raw

material consumption (RMC) measures the total amount of raw materials required to produce the goods used within the territory of the economy (also called “material footprint”).

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influence over the success of circular economy policies, compared to the many more numbers smaller firms that make up Europe’s economy. The good news is that major companies appear to be in favour of the shift towards a circular economy. In a 2018 survey conducted by Newsweek, 95% of respondents—317 senior executives of large companies, including 134 from Europe—said they viewed the transition as positive for their organisation, and 30% of European company representatives said they already had a circular strategy (Shields 2019). The report, which was also based on 25 interviews with executives and experts, points to several drivers: Climate change targets. Major companies are increasingly making public commitments on carbon emissions, such as with the Science-Based Targets initiative, which commits companies to CO2 reduction targets in-line with the goals of the Paris Agreement.8 As companies exhaust the gains from installing renewables and energy efficiency programmes, they are increasingly looking for emissions cuts in other areas of their business, including the ways their products are made and used. Legislative and policy action. These include the EU’s Circular Economy Package, as well as various national and regional initiatives, especially within Europe. Further abroad, waste import bans from Asia are heightening the waste challenge at home and putting further pressure on major brands to take their share of responsibility [(Hancock 2018) and Earth Day Network9 ]. Broader business continuity. These cover a range of issues from rising consumer demand for sustainable or “circular” products and services, to volatile commodity markets, as well as, at least in some Western markets, a shift away from ownership towards the sharing economy. Most companies citied commercial gains, such as enhanced competitiveness, higher revenues and better brand image as key advantages to circular strategies. The need for greater learning and collaboration Further evidence of growing corporate interest in the topic is in the recent emergence of cross-industry coalitions dedicated to the circular economy— such as the Ellen MacArthur Foundation, World Economic Forum and WBCSD.10 These developments highlight another distinction of the circular economy: it requires far greater collaboration, and knowledge-sharing than the linear one—whether that means working with suppliers to source secondary materials or components, or with distributors to establish product take-back programmes or finding buyers for by-products and waste. Indeed, companies cited lack of know-how as one of the lead challenges to implementing circular strategies. Some said their teams lack specific skills or training: for example, on the knowledge of material properties, or resourcesaving production processes, or the lifecycle impact of products. Yet others pointed out difficulties in finding people with interdisciplinary knowledge who could take a system-wide view. For example, designers, chemists and engineers who can create materials and products with end-of-life in mind.

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More broadly, various interviews stressed the need for more research on the circular economy itself. It is often mentioned that there are more than a 100 definitions of what the circular economy actually means. Defining it is particularly important if organisations (public and private) are to create appropriate targets and procurement policies. For example, can a product that is harmful to human health or prosperity, either in its production or use, ever truly be “circular”? Sometimes the most resource-efficient strategy may not be to produce (or use) at all. But this is not a strategy most companies will want to follow.

Lifestyles Transition Even an ambitious energy and resource transition cannot guarantee that the world will meet the 1.5 °C target. It is important that households and businesses will be intrinsically motivated to make changes to their consumption and production habits— not least to limit rebound effects from greater energy and resource efficiency. Lifestyle, culture and behaviour have a considerable influence on material and energy use and associated GHG emissions. Especially in combination with technological and structural change, behavioural change has a high mitigation potential by changing consumption patterns in areas such as mobility (demand and choice of transport mode), household energy use, diet and food waste, and purchasing/ownership decisions (e.g. choosing to buy fewer, longer-lasting products or to share/lease instead of own). Monetary and non-monetary incentives as well as information measures can facilitate behavioural changes (IPCC 2014). One important aspect is the need to change how we feed the world. Food is the consumption category with the greatest climate impact, accounting for more than 20% of global GHG emissions, followed by housing/shelter, mobility, services, 8 “Surge

in Global Business Embracing Climate Science to Navigate Low-Carbon Transition”. Science-Based Targets, September 13, 2018, https://sciencebasedtargets.org/2018/09/13/surge-inglobal-business-embracing-climate-science-to-navigate-low-carbon-transition/. 9 “Global Efforts to End Plastics Pollution: Single-Use Plastics”, Earth Day Network, accessed December 18, 2018, https://www.earthday.org/plasticban/. This article summarises some of the laws around the world, many of which were announced or came into force during 2018. These cover a number of US states, the EU and various other countries, as well as major companies including IKEA, Hilton and McDonald’s. 10 Sources: “CE 100”, Ellen MacArthur Foundation, accessed December 18, 2018, https://www. ellenmacarthurfoundation.org/ce100; “Platform for Accelerating the Circular Economy”, World Economic Forum, accessed December 18, 2018, https://www.weforum.org/projects/circular-eco nomy; “Circular Economy”, World Business Council on Sustainable Development, accessed December 18, 2018, https://www.wbcsd.org/Programs/Circular-Economy; Brendan Edgerton (Director, Circular Economy, World Business Council on Sustainable Development), in discussion with Newsweek Vantage, November 14, 2018.

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manufactured products and construction (Hertwich and Peters 2009). Thus, it is wise to reduce food waste in order to achieve food security and improved nutrition. Globally, one-third (or around 1.3 billion tonnes) of food produced is wasted at different stages of the supply chain each year (Gustavsson et al. 2011). With around 8% of total anthropogenic GHG emissions, the contribution of food waste emissions to global warming is almost equal (8.7%) to global road transport emissions. On a global average, the per capita food waste footprint in high income countries is twice as high as that of low-income countries (FAO 2015). A reduction in meat consumption can also bring significant reductions in emissions. Meat and dairy consumption is expected to rise in both developed and developing nations as incomes rise and the western diet becomes more popular. A diet rich in animal products creates for more emissions in the production process than a plant-based one. Accordingly, climate policy can include measures limiting the consumption of meat. The meetPASS Scenario contains two important assumptions about dietary habits. On food waste, the model assumes that the next three decades will see a 10% reduction in waste within each stage of the food supply chain: in food production (compost, fertilisers, etc.); in food processing and in restaurant and catering services; and in households. It also assumes that people will cut their meat intake, resulting in a global growth rate that is 2–3% points lower than in the BAU Scenario. In many markets, meat consumption will fall overall and most strongly in developed and in EU markets (in places by up to 50%). These measures would combine to reduce the footprints for cropland and pastures11 compared to the BAU Scenario, as can be seen in Fig. 7 for the EU. In the 11 Croplands and pastures have become one of the largest terrestrial biomes on the planet with around 40% of the terrestrial surface, whereas the intensification of cropland covers alone around 12% (Foley 2005; Lutzenberger 2015). The cultivation of agro-fuel plants on large plantations for bio-energy demands versus food production and biodiversity is a major driver of land system change [25].

The Energy, Resource and Lifestyles Transitions Go Hand in Hand … Fig. 8 Average food price development in the BAU and the meetPASS Scenario. Source Own representation

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meetPASS Scenario, the EU would come close to the land-use target of 0.15 ha per capita cropland footprint and would also reduce its pasture footprint to 0.17 ha per capita (or by around half from today’s level). Figure 8 shows the development of the global food crop price in both scenarios. In the meetPASS Scenario, the average food crop price is one third lower than in the BAU Scenario. Thus, the meetPASS Scenario is a relief to rising food prices. In addition, we assume that people in industrialised countries would spend less money on material consumption. For example, individuals would reduce their spending on air transport linearly by around 25% (depending on the current level of air travel) by 2050. Especially in newly industrialised countries, people will also choose to live in smaller houses, including opting for multi-generational living, resulting in a reduced demand for living space of up to 50% (which in turn would lower energy and heating demand). A key element is the decision by more and more people to reduce their working hours. Substituting some income for more leisure time would result in a drop in (material) consumption. This assumption is applied for industrialised countries only and envisages that the average working week per employee would fall by 20% against a BAU Scenario. The assumed reduction in consumption habits would negatively affect the development of GDP. In the European Union, the GDP is higher in the BAU Scenario than in the meetPASS Scenario (after 2035). However, if we look at employment, the number of persons engaged is higher in the meetPASS Scenario (see Fig. 9). This results from the reduction in working time.

The Impact on Planet and Prosperity The scenario designed in meetPASS was quantified with the global model GINFORS to map the feasibility of a COP21-compatible future scenario and to project implied international impacts.

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The Resulting Decarbonisation The three transitions described above reduce global CO2 emissions from 33 to 9 Gt (see Fig. 10). While in the BAU Scenario the CO2 emissions per capita would remain relatively stable, in the meetPASS Scenario, they would reduce from 4.5 tonnes per capita in 2018 to 1.0 tonne in 2050. EU CO2 emissions would fall even more sharply (by almost 90%). On a per capita basis, CO2 emissions only reduce from 8 tonnes to 5.8 tonnes in the BAU Scenario, while in the meetPASS Scenario, a substantial reduction (to 1.0 tonne per capita) could be achieved (see Fig. 11). The results presented in Table 1 indicate that the cumulated CO2 emissions from 2017 to 2050 in the meetPASS Scenario stay within the limit of the remaining carbon budget (580–770 Gt with a 50:50 chance of achieving the 1.5 °C target). For the BAU Scenario, the cumulated emissions (1335 Gt) strongly exceed the remaining budget. However, for EU27, the remaining carbon budget is not sufficient. This indicates that some EU member states emit at the expense of other countries, which is not a just Fig. 10 Global CO2 emissions in the meetPASS Scenario. Source Own representation

meetPASS Scenario: Global CO2 emissions (in Gt) 45 40 35 30 25 20 15 10 5 0 2020

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Table 1 Calculated cumulated CO2 emissions from 2017 to 2050 (probability of 50% to achieve the 1.5 °C target CO2 budget from 2017 onwards (in Gt)

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global distribution of CO2 emissions. There is therefore potential for these countries to make greater efforts to comply with the Paris Agreement.

Economic Implications The achieved reduction in CO2 emissions, resource use and land-use is possible without economic collapse. The economy would grow globally by 75% instead of 85% in the BAU Scenario and the GDP growth rate remains positive over the entire simulation period (see Fig. 12). Positive effects on GDP can also be expected in Europe, but the effects are tempered by the assumed lifestyle and consumption changes (see Fig. 9). Initially, there would stronger growth resulting from increased investments. However, the economic stimulus slows later (overall by 23% instead of 31% in the BAU Scenario), as consumption and working habits change. Nevertheless, the number of employed

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persons in the meetPASS Scenario is higher than in the BAU, owing to the reduction in working hours in industrialised countries.

Summary and Conclusions The modelling results of the meetPASS Scenario indicate that achieving the 1.5 °C target would be possible without economic breakdown, if we start to act immediately. However, some countries and sectors would lose (at least in the transition period). An important insight of the meetPASS project is that three key transitions are needed to substantially decrease CO2 emissions. It requires: • A transformation of our energy systems (“Energiewende”) • A dematerialised circular economy (“Ressourcenwende”) • A change in lifestyles and a change in how we feed the world (“Lebensstilwende”). This would stimulate jobs in Europe and still produce economic benefits. There is a direct physical relationship between the quantity of raw materials used in industrial processes and CO2 emissions. The transition to a circular economy (= dematerialisation) and climate protection are thus inseparable. The meetPASS measures would, on the one hand, reduce cumulated resource extraction from 3000 to 2000 Gt compared to the BAU, and on the other, halve the stock of CO2 emissions accumulated by 2050 (700 Gt instead of 1300 Gt). However, while the measures related to a resource transition are sufficient to meet the CO2 emissions target, they are not sufficient to reach the derived target for resource use (45 Gt TMC and 5 tonnes per capita by 2050). Thus, a transition to a truly dematerialised circular economy needs further efforts beyond the resource policy measures included in the meetPASS Scenario.

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Obsolescence, Useful Life Extension and New Educational Concepts: The Economy Needs Repair! Katharina Dutz, Manuel Nagel, and Niko Paech

Previous efforts to stabilize sustainable development not only failed, but sometimes even caused additional environmental problems. This grandiose failure in particular is due to the fact that, instead of overcoming the growth paradigm, the easy and politically opportune path of ecological modernization has been taken. According to this, the throughput of industrial added value should not be reduced. On the contrary, it should be decoupled from environmental damage by ecological efficiency as well as closed material cycles and the use of renewable resources. First of all a reference to so-called rebound effects (Paech 2012) is necessary in order to recognize why this strategy is theoretically doomed to fail. An even deeper look into the logic of systematic sustainability deficits reveals the temporal and material depreciation of a growing flow of goods: This steady devaluation has gradually taken the place of preserving property inventories. The oft-cited cliché, according to which rapid wear and shortened cycles of use emanate solely from the side of the supplier, capitalization constraints or profit maximization, falls far short. The obsolescence of the sphere of goods is to be understood rather as a social process, which almost inevitably resulted from modern ideas of progress and prosperity. In the following, phenomena of devaluation and their consequences will be discussed. Then, the importance of repair cultures as an expression and means of a re-attentive awareness of material artifacts is addressed, especially in the context of an adequate understanding of education.

K. Dutz University of Oldenburg, Oldenburg, Germany M. Nagel Stiftung Ökologie & Landbau, Bad Dürkheim, Germany N. Paech (B) University of Siegen, Siegen, Germany e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_13

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Devaluation as a Social Process Consumer societies reveal various processes of devaluation, which are evidenced by synonyms such as junk, trash, rubbish, knick-knacks, odds and ends. At the same time, however, this reveals that some things that are currently regarded as inferior were formerly given a higher value. This results in both time boundedness and relativity of worthlessness. The latter can be understood as the result of social processes, especially since it is interpretive and presupposes a corresponding, collectively shared meaning. Both the consequence and cause of a social act of diminishing the value assigned to an object can culminate in or emerge from highly physical-material processes: – Planning or accepting increased obsolescence through low quality and durability, for example, to minimize business costs or to increase the frequency of new purchases – Relative devaluation through the creation of innovative alternatives that seem to surpass previously accepted product or technical variants in terms of performance or functionality – Mass production that inflates artifacts and unique designs, whose value has emerged from their scarcity – Devaluation of goods that lose their intrinsic value because they are downgraded to means for other purposes; this includes, for example, any destruction of nature that degrades environmental goods to input or production factors – Disfigurement of symbols or icons by depriving them of their original meaning, such as the Esprit T-shirt with the image of Che Guevara – Defragmentation and detachment of individual elements from a wider systemic context; for example, the isolated use of an audio fragment from Beethoven’s Ninth Symphony as on-hold or supermarket music. Here are three differentiations to note: (1) Devaluation does not have to be an irreversible process. The later revaluation of recent junk by the change of fashion, retro-phenomena, artistic innovations (“Plunderphonics” recycling art in the broadest sense), a rediscovery of the desirability of temporarily devalued technology and product design (“manufactory”) or the shortage of previously available alternatives (such the revaluation of candles due to a power failure or bicycles as a result of dramatic gasoline price increases) etc.… reveals that some objects undergo a sinusoidal fluctuation of their assigned value. “The pace of obsolescence, including its obsolescence, belongs to the growing pace of development; the faster the newest becomes old, the sooner old things can become the newest again” (Marquard 1988/2003, p. 241). (2) As a punctual phenomenon, devalued artifacts often reflect the cultural imbalances of modern societies. “Cultural wear and tear” (Paech 2005, p. 301), which is explained by a devaluation of symbolic and emotional consumer functions,

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does not rule out the same object—for example folding bicycles from the seventies, a kidney table or a record of The Beach Boys—at the same time perceived by certain individuals as “junk,” by others, however, as “mega-cool” or as an aesthetic vehicle for positive distinction gains. The same can apply to simple consumer goods. Thus, in the 80s and 90s, the brand “Hansa”—beer contributed with its extremely low price and quality of beer-like liquids to forming the identity of the German punk movement. (3) The individual attitude to the inferior object may be subject to significant fractures and apparent paradoxes. For some time now, marketing research has focused on the systematic interplay of consumer extravagance and peculiarity (high-priced consumer goods with a high symbolic content) on the one hand and cost-minimizing bargain hunts (Aldi yoghurt for the sake of saving money) on the other. The compatibility of both aspects is intensively discussed as “smart shopping” or “hybrid buying behavior between consuming Aldi products and luxury” (Pfabigan 2004, p. 12) and attributed to the middle classes of modern industrial societies.

Mass Production and Creative Destruction as Social Progress? Until the first report to the Club of Rome (see Meadows et al. 1972), it seemed that social progress could be translated into an unconditional growth imperative. Undisturbed by material or ecological restrictions, economic and scientific aspirations culminated in an augmentation logic that could be associated with key categories such as prosperity, freedom, justice and peace. The interlocking of economic growth and technical progress promised to eliminate all shortages and obstacles that might be in the way of the modern law of self-actualization. It was not only a matter of constantly increasing the quality of resources used in the search for individual happiness, but of making the progress achieved through quantitative growth available to an increasing number of people on earth, in order to get closer to the historically major project of a liberated humanity. The paradigm of mass production, designed as early as the nineteenth century, heralded a first phase of systematic devaluation, albeit as an unintended side effect. The lofty goal of making material wealth suitable for the masses mobilized the economic productivity advantages of assembly line production, in particular through the intermingling of specialization, automation and standardized design. Taylorism promised to capitalize by increasing economies of scale which means continuous cost reductions, which could be passed on through price reductions if the competition was sufficiently functional. Thus, cheap goods became the means of democratizing social participation. At the same time, modern progressiveness manifests itself in a comprehensive, innovation orientation. As a specific model of change, this innovation aims to break with all that is known in order to add new options to the previous arsenal of resources

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which takes leaps of innovation and therefore opens up new opportunities. This causes a twofold growth problem, firstly as a result of additional production of new material and secondly as a result of the growth of what is no longer up-to-date, that is to say landfilled, disposed of or even sold off. In “creative destruction,” i.e., the production of new technologies and consumer goods, Schumpeter (1934, p. 133) saw the “fundamental impulse that sets the capitalist machine in motion and maintains it” (Schumpeter 1950, p. 137) and a powerful leaven, which, in the long run, extends production” (ibid., 140). To the extent that this dynamism systematically fuels mass consumption and creates incentives for the design of increasingly short-lived products, the path “from Schumpeter’s creative destruction to the global endangerment of humanity” (Hübner 2002, p. 240) does not seem to be very long. Innovation fundamentally devaluates everything that exists. “Innovation is the epitome of the temporary. For the time being, the obvious will be outdone, but every innovation has already been chosen to outdo “(Gronemeyer 2000, p. 123). The acceleration of innovation activities cultivates an all-encompassing throw-away syndrome. “Destruction is cool!” is the title given in the highly acclaimed work “The Circle of Innovation” (Peters 1998, p. 35) of a successful author in the management literature segment. As noted by Nowotny (1989, p. 12), “[…] the process of continuous” creative destruction “, which Schumpeter called innovation, leads to another problem in civilization: that of obsolescence, the aging of technologies, the production of waste. The past cannot absorb the waste fast enough. The creation of more and more new things inevitably increases what needs to be eliminated.”

Economy and Obsolescence The Gradual Transformation to the Shortening of Useful Life As a result of the integration of mass production and innovation orientation, a paradigm shift in the patterns of utilization became visible at the beginning of the twentieth century. It was not the technically and materially possible optimum of longevity and service life that was the goal of product development, but a calculated economic optimum. The prevailing approach of technical efficiency, according to Zachmann (1995, p. 104), came into conflict with economic value. Krajewski (2014, p. 113) notes: “The technical optimization of industrial manufacturing processes raised products in the early twentieth century to a level of quality that, theoretically and practically, could lead to a high load capacity and long product life. Nevertheless, […] a process began that had to change the products so that they no longer get an optimum use of the material but of the market. “ The incandescent lamp seems to be the first and probably best documented example of this reorientation. Before their mass production became established in the 1920s, incandescent lamps were produced with a high portion of manual work (see

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Luxbacher 2004, p. 105). Their construction made repair possible, for example by replacing the spent filament. The proportion of work done on the end product at this time corresponded approximately to the proportion of materials used (see Luxbacher 2004, p. 106). Many companies specialized in the repair of incandescent lamps, which was cheaper than buying new ones. The representatives of leading incandescent lamp companies Osram (Germany), International (USA), Philips (Holland), Compagnie des Lampes (France), Tungsram (Hungary) and others founded the “Phöbus” cartel in Geneva in 1924. It is considered to be the first worldwide, effective cartel of economic history (see Krajewski 2014, p. 96ff.). In addition to a breakdown of the markets and product-related standards, the shortening of the life of incandescent lamps to 1000 h was agreed, in order to obtain higher sales figures through early wear. This useful life was significantly below the possible technically material value of 1500–2000 h. “After extensive investigations, this standard was defined as the “economic burning time,” in which the ratio of constantly increasing electricity input and constantly decreasing light output on the basis of electricity and lamp prices did not fall below a certain level” (Luxbacher 2004, p. 116). By leveraging market power, increasing economies of scale, and patented, manufacturing-friendly designs, the cartel was able to displace other, mostly smaller, competitors who offered longer lasting bulbs. The design of the 1000-h light bulb was geared to make repairs lose their meaning in terms of both business and technology. This instructive, presumably first example of so-called planned obsolescence reveals how the “technical rationality” was subjected to the economic rationality. It happened in a very direct way with a kind of constructive inscription for the product, which was not visible to the consumer” (Luxbacher 2004, p. 118).

Forms of Obsolescence of Goods The term “obsolescence” comes from the Latin obsolescere and means “wear out” or “disfigure” (Duden 2015). It refers to the (natural or artificial) aging of objects (see Prakash et al. 2015, p. 31). A “natural” obsolescence of material objects can be justified according to the second law of thermodynamics. Arbitrarily induced or planned obsolescence, on the other hand, causes defects to occur at an early stage and makes repairs impossible or difficult in order to reduce the duration of the useful life of a product. The term “planned obsolescence” is attributed to London (1932). Against the background of the Great Depression in the 1930s, he described planned obsolescence as an economic-policy measure to increase production. Initial critical objections to planned obsolescence were presented in “A Theory of Purposeful Obsolescence” (Gregory 1947) and “The Great Waste” (Packard 1964). Both of the literacy Pieces refer to frequently used strategies of companies, by which consumers can be led to a frequent acquisition of new products, even though the market is saturated. In (popular) scientific literature, this phenomenon is interpreted differently (see Brönneke and

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Wechsler 2015). It is hard to make out a single definition, except that it is a business process for planning product life. The motives assumed in the literature vary. For example, some authors refer to factors inherent in the system: saturated markets or overcapacities, confusing/nontransparent markets, a strong capital market or profit orientation, the ethical attitude of management (see Schridde and Kreiß 2013, pp. 8ff; Guiltinan 2009, P. 21f; Krajewski 2014). The premature replacement of a product tends to be a consequence rather than a cause. From the point of view of another line of argument, intentional planning for obsolescence aims at “aligning the technical product life with actual product life” (Prakash et al. 2016, p. 31). Accordingly, products are adapted to the respective usage parameters and environments, which arise in the context of cultural, social and psychological dynamics and constant change (see Wieser and Tröger 2015; Löwe 2015). Four obsolescence species can be distinguished (see Prakash et al. 2015, p. 32; Rivera and Lallmahomed 2012, p. 2): (1) “Material” obsolescence is due to the poor performance of materials and components. It is shown, for example, as an accelerated degradation of the strength properties due to environmental corrosion, flow, dismantling and remodeling processes. Lack of mechanical and electronic robustness, progressive miniaturization and an increase in the density of integration should be mentioned here, as is often the case with LCD televisions, notebooks, washing machines, etc. (see WRAP 2011a, b, c). (2) The causes of “functional” obsolescence lie in rapidly changing technological (e.g., digitization and semiconductor technology) and functional requirements (e.g., the interoperability of software and hardware of different electronic devices) for products. In the area of information and communication technologies, this is strongly influenced by the various stakeholder interests of software and hardware manufacturers (see Prakash et al. 2016). (3) “Psychological” obsolescence involves the premature replacement of functional objects due to altered fashions, new technological trends, faster innovation cycles and adaptive consumption patterns. “Installing in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary” (Stevens 2003, p. 129). General Motors, for example, succeeded in shortening production cycles with rapid model changes with minor technical and visual modifications in order to defend its competitors’ market power. (4) “Economic” or “systemic” obsolescence can be attributed to the lack of costly repairs and maintenance or the low cost of new acquisitions. For example, short product development times, accelerated price erosion, repair-averse design, high repair costs and a lack of available spare parts, necessary special tools and repair services can contribute to this. Based on the possible motivation, Schridde and Kreiß (2013, p. 12ff.) distinguish between three “degrees of intent,” namely the “deliberately planned premature wear (obsolescence),” the “intentional premature wear” and the “advanced approval of premature wear.” In France, a law was passed in October 2014, which for the first time criminalized the obsolescence program as a deliberate act. This raises the question

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of how deliberate planning of obsolescence can be demonstrated in the sense of clear intent. Using the mobile phone as an example, it can be shown that different types of obsolescence can occur simultaneously. “Psychological Obsolescence […] is the reason for replacing a mobile phone. The second reason is the availability of new functions on newer phones—functional obsolescence. The third reason is because the battery is not working, or another repair was required—systemic obsolescence” (Rivera and Lallmahomed 2012, pp. 2f.).

Product Life in Descent The terms “product useful life” and “product lifetime” are often in an ecological, economic, psychological, legal or technical context (see Janusz-Renault 2008; Murakami et al., 2010, pp. 600f). “Useful life” can generally be understood as meaning “the useful period between the first commissioning and the final decommissioning of a good” (Bellmann 1990, p. 2), sometimes supplemented by possible reuse, transfer or sale to another person. By contrast, the period of time from the purchase of a device to the defect, which causes the relevant functions to expire, is referred to as the product lifetime (see Schlacke et al. 2015, pp. 48ff.). It can be calculated and defined within the scope of business product planning and is therefore technically constituted (see Downes et al. 2011, pp. 14f.), but can also be influenced by user behavior. The period of use may end before the physical life, namely firstly by careless use and secondly due to a defect caused by a weak point of the device or due to premature disposal despite full functionality of the device. The causes lie in the different types of obsolescence described in the previous section. On consumer portals or through product testing by the Stiftung Warentest, various weaknesses and quality defects are disclosed. Thus, on the platform “Murks no thanks,” there are no less than 3000 cases of planned obsolescence (see Wölbert 2015, as of January 2015). These partly subjective assessments, according to Prakash et al. (2015, p. 32f.), are not necessarily scientifically usable in terms of their reproducibility, verifiability and generalisability. Various scientific studies on the development of the useful lives of products show relatively high comparability in the period from 2000 to 2012/13 (see Prakash et al. 2015; Huisman et al. 2012; Bakker et al. 2014), in particular on the basis of selected electrical and electronic equipment. Huisman et al. (2012) surveyed the retention period of electronic devices in Dutch households between 2000 and 2010 and found a shortening of this period for many devices (Table 1). Bakker et al. (2014) examined the average useful lives (here period between purchase and disposal) of selected household appliances in the Netherlands from 2000 to 2005. As shown in Table 2, the useful life of all the appliances under consideration has decreased, with the exception of compact fluorescent lamps and flat panel displays.

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Table 1 Change in the retention time of selected commodities from 2000 to 2010 Product category

Change of average period of use (2000–2010) (%)

Screens

−17

Small household appliances (SHA)

−12

Information technologies

−10

Samps

−10

Large household appliances (LHA)

−7

Cooling and freezing appliances (C&F)

−4

Professional appliances (B2B)

−4

Source Huisman et al. (2012, S. 21), own representation

Table 2 Change in the average useful live of selected household appliances from 2000 to 2005 Product category

Average life product span (2000)

Average life product span (2005)

Delta (%)

Compact fluorescent 7.4 lamps

7.7

3

Flat screens

10

10

0

Vacuum cleaner

8.1

8

−1

Laundry dryer

14.5

14.3

−1

Fridges

14.2

14

−1

Dishwashers

10.7

10.5

−2

Small IT applications

4.5

4.4

−2

Tools

9.8

9.6

−2

Toys (small)

3.8

3.7

−3

Mobil phones

4.8

4.6

−3

Washing machines

12.1

11.7

−3

Notebooks

4.3

4.1

−5

Kettles and coffee machines

7

6.4

−9

Print devices

9

8.2

−11

Microwaves

10.9

9.4

−15

Small consumer electronics

9.4

7.8

−20

Source Bakker et al. (2014, S. 11), own representation

In the current study of the Öko-Institut and the University of Bonn, Prakash et al. (2015) mainly analyzed data from the Society for Consumer Research. The subject matter is the average product lifetime and useful lives of household appliances and small appliances, information and communication technology equipment and

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consumer electronics between 2004 and 2012/13. The useful lives of the first usage were recorded, but no data on total usage times. The average initial service life of large household appliances (refrigerators, freezers, washing machines, tumble dryers, dishwashers and electric stoves) has fallen from 14.1 to 13.0 years. The average initial service life of the equipment, which had to be replaced due to a defect, decreased from 13.5 to 12.5 years. Seventy percent of all major household appliance replacement purchases were due to a defect or a fault in the old appliance. The authors were particularly critical of the proportion of large household appliances that had to be replaced in less than five years due to a defect. This rose from 3.5% in 2004 to 8.3% in 2012/13 of total sales. Of these, tumble dryers (18%) and freezers (17%) have the highest proportions. The results also show that in 2012, more than 60% of the still functioning flat screen televisions were replaced.

Sustainability and Obsolescence: Decoupling Strategies What answers does sustainability research provide to counter the material devaluation of goods? It is possible to distinguish (a) concepts of ecological modernization, which are expected to contribute to “green growth” through technical innovation and (b) growth-critical positions, which suggest that overall quantitative consumer demand should be limited. This section discusses the former variant, which in turn is divided into two streams: ecological efficiency and consistency.

Ecological Efficiency Efficiency measures aim to minimize the input of resources required per unit of consumption (see von Weizsäcker 1989; Schmidt-Bleek 1993). This principle proves to be extremely compatible with an increase in product lifetime, especially in the following fields of action: (i)

Optimization of product design. With appropriate design features, the physical life of a commodity can be optimized. This is achieved by reducing wear and tear and other measures that minimize the likelihood that a defect, damage or (premature) expiry of the functionality will occur. The modularity and reparability, combined with a standardization of the items affected by possible wear or damage, increase the potential service life. (ii) Repair, rebuild and remanufacturing. Both professional repair, maintenance and repair services as well as noncommercial repair projects (repair cafés, open workshops, etc.) contribute to service life extension. Companies can specialize in processing discarded objects in such a way that they can be remarketed (possibly with a warranty claim) (for example Revendo).

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Useful Life Extension

Product Life Extension

Sequence of Usage Phases

…

Upcycling

Useful Life Product Life

t

Fig. 1 Efficiency and usage phases (source own)

(iii) Freight recycling. Second-hand goods trading can enable both stationary and online platforms (such as eBay or Amazon marketplace) to efficiently exploit the potential benefits of physical objects. Consumer goods that are not discarded due to physical but “cultural wear and tear” (Paech 2005) can remain in the process of benefits through the change of the owner, i.e., consumer goods recycling. (iv) Community use. The so-called sharing economy is based on making private ownership of consumer goods obsolete by temporarily transferring the rights of disposal to users, for example in the sense of “selling performance rather than goods” (Stahel 2001). The providers of such services are also the owners of the temporarily used equipment (vehicles, heaters, office equipment, tools, etc.…). In addition to the primarily intended effect of intensifying use, this has the effect that the owner of the equipment has to ensure its functionality, thus developing a high interest in a maximum useful life of the objects in question, because this increases his/her profit (Fig. 1). These efficiency measures are based on extracting new values or benefit streams from an existing stock of hardware as far as possible, namely by maximizing the physical life of an object (starting points i and ii), the useful life being prolonged (starting point iii) or the number of periods of use is maximized within the entire cycle of use of an object (starting point iv).

Ecological Consistency In contrast to the efficiency principle, which aims to minimize the quotient of material input and service output used, the consistency principle (Huber 1995) does not envisage a quantitative saving but a qualitative optimization of the resources used. The material and energetic metabolism should be optimized so that all used input factors are ecologically harmless—no matter how fast they wear out or become waste— because emission-free (i.e., renewable) energy sources are used and the materials used are either completely ecologically embedded (closed biological cycle) or can be reused indefinitely (closed technical circuit).

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Such approaches, sometimes renamed or slightly modified, such as “bionics” (Nachtigall 1998), “Biomimicry” (Hawken et al. 2000), “eco-effectiveness” and “Cradle-to-cradle” (Braungart and McDonough 2003) or “upcycling” (Pauly 1998) translate the economic style and design of the biosphere into that of man-made artifacts: anything material that is fed as input, never turns into waste or emissions, but mutates after each productive or consumptive use to new “food” for further processes. “To include the entire physical reproduction process into product development in the course of time means, in consequence, no less than the usual construction plans to extend reductions of the product and its constituents. On such a basis, it can be seen how and in what time the substances used are reintegrated into the anthropogenic or the ecological household” (Hofmeister 1998, p. 196; emphasis added in the original). Ideally, instead of the conventional linear flow economy, “closed loops” would ensure that all the substances used remain in a technical or biological cycle, with only renewable energy sources being used. Bringing all materials remaining at the physical end of a product’s use back to the beginning of the production chain without loss or emissions, to serve as input again, would result in a material metabolism that is completely closed. In this case, early wear would no longer be a problem. The logic of product life extension would—at least ideally—lose all necessity.

Synthesis: Consideration of the Entire Life Cycle Efficiency, which tends to be based on the input side, and consistency, which primarily intends an ecological neutralization of all output flows, can be condensed from the supply chain perspective into an overall concept for sustainable design. A broad list of examples can be found in Charter and Tischner (2001). Accordingly, it would be preferable “to develop and use those substances and compounds whose ecological effects are largely manageable and whose presence in the anthropogenic household lasts as long as possible, of which durability in anthropogenic use can be expected (‘longevity’ of the products, reusability of the substances). Conversely, with regard to the ecological household, priority should be given to developing and using substances which, in the shortest possible time, are able to enter into a productive connection with the material balance of the ecological system; i.e., they are “short-lived” and sustainable in this sense” (Hofmeister 1998, p. 197). This logic can be applied to the entire value creation process involving all companies, because the physical form of an isolated object always has a “downstream” (past and origin of the materials) and an “upstream” (future and fate of the materials) along the so-called Supply Chain (production chain). “The central idea of supply chain management is to apply a total system approach to the flow of information, materials and services of raw material suppliers through factories and warehouses or the end customer” (Chase et al. 2004, p. 17). The supply chain is only complete in the sense of a consistent sustainability orientation if it is supplemented downstream with the use or disposal of the resources used after the end of the physical service life.

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This holistic perspective opens up options for a so-called functional orientation, through which sustainability effects can be achieved beyond technical innovations, namely through changed usage rights and organizational principles. Jantsch (1973), who suggested a stronger orientation to the actual purposes and functions of conative acts, is at the forefront of this basic idea. For the production and consumption of goods is only one of several ways to satisfy a particular need or to fulfill a desired (consumption) function. System and service innovations are accentuated in order to achieve ecological relief effects largely through production-free or property-based measures of intensification of use or extension of service life. Overall, three areas can be distinguished along the supply chain: (1) technical efficiency optimizes the input side by increasing the productivity of the resources used through material innovations in order to reduce their quantitative requirements. (2) On the other hand, technical consistency is primarily aimed at an ecological neutralization of the input side by qualitatively optimizing the materials and processes used so that any material turnover either remains within a biological or technical cycle. (3) In contrast to that, measures in the middle of the supply chain which correspond to the functional orientation are taking effect (Fig. 2). Although concepts of functional orientation are in line with Schmidt-Bleek’s (2000) notion of so-called utility efficiency, they can also serve as a consistency strategy, gradually dissolving the often-emphasized contrast between the two philosophies: Repairing and recycling of the products (work-up, if necessary with subsequent recycling) in order to achieve the lowest possible material production, not only increases the benefit efficiency by achieving a reduced substance throughput at the level of consumption, which is the input side and thus relieves the source function of the environment. In as much as this implies returning material results to previous levels or “stretching” their remaining within the process (more intensive or longer use

Technological Efficiency

Technological Consistency

d Overlay Shelf

Production

Packaging

Raw Material

Processing

Logistic

Preliminary Products

Assembly

Transport

Tech. Nutrient b Retail

Use

Repair

Disassembly

a c

Link Efficiency/ Consistency : Functional Orientation Ownership based Usage Systems

Service based Usage Systems

a. Useful Life Extension (Repair) b. Second Hand Trade c. Rebuilding/Remanufacturing

d. Use Intensification - Sharing/Pooling/Leasing - Service Consumption - Access

Fig. 2 Efficiency, consistency and functional orientation (source own)

Biol. Nutrient Waste Emissions

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of hardware), this also relieves the output side, and therefore the ecological sinking function. A slow release of material artifacts into the biosphere prevents their assimilation capacity from becoming overwhelmed. Such an optimized process design would ideally lead to a permanent retention of any matter in the process chain. At the same time, this would be the condition for a closed technical cycle, as envisaged by the consistency principle.

Decoupling Is not Enough The consistency principle is quickly reaching its limits, as the product design, which is increasingly based on digitization and miniaturization, is proving to be less and less compatible with closed circuits. How could such complex structures as automobiles, computers, smartphones, etc., be designed in such a way that all components and production step along the supply chain can be dismantled and ecologically neutralized and, in addition, only renewable energy sources be used in the manufacturing process? Furthermore, the idea of closed circuits hides the quantitative dimension and origin of the substances used. This is admitted by Huber (2000, p. 110) when he emphasizes “it is not primarily about less material use, but rather about other types of material use that can be maintained even in large volumes.” Schmidt-Bleek (2000, p. 58) has pointed out the problem of “matter translocations” associated with this: “The fact that […] about 70% of mankind’s current flow of solid materials cannot technically be conducted in a circuit because a large part of it never enters the production “cycle,” but simply remains as waste material, excavated soil or other substances, which are moved in the extraction of substances to be used but are later not used.” But efficiency measures can per se—at least in an unhindered growing economy— not cause sufficient environmental relief. Even the opposite is possible, as shown not only by the theoretical, but increasingly empirical relevance of so-called material and financial rebound effects. The history of efficient and/or consistent product design has never been anything but a labyrinth of temporal, spatial, material and systemic shifting of ecological problems (see Paech 2016). How should goods be procured that are transferred as monetary benefits from at least one supplier to a buyer whose production, physical transfer, use and disposal are, however, relieved of all land, matter and energy consumption? So far, green growth solutions, whether consistent, efficient, or both, are far from fulfilling that requirement. Therefore, they necessarily fail due to the growth problem. If they are added to the stock of goods, the (green) economy grows, the ecosphere is not relived, but additionally burdened. After all, even the most efficient and consistent products can at best be relatively less harmful than previously used goods. On the other hand, if sustainable innovations only replace other objects, it could—and this too only under very restrictive, sometimes even unrealistic conditions—result in ecological relief, but no economic growth. Consequently, the question arises of how efficient or consistent solutions could be embedded in an economy beside further growth.

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Post-growth Economics: Reduction and Conservation As a reflex to the obvious failing of greening the economic growth as well as further expansion limits, new trends critical to growth emerged in the 2000s. They tie in with and expand the growth criticisms of the early seventies and increasingly nourish the finding that sustainable development can only be concretized as an economic reduction program. The “post-growth economy” has to be located in this context (Paech 2008, 2012). It results as a consequence of the analysis of relevant growth limits and drivers. Building on this, action concepts are derived.

Overcoming Supply-Side Growth Drivers Industrial production systems prove to be highly capital-needy. If the service provision is broken down into as many isolated production stages as possible, this allows their flexible and location-independent relocation. Each separated subprocess can be moved to where specialization and economies of scale minimize costs. Furthermore, it is achieved with the differentiation to standardize each specialized subprocess in such a way that by increasing the use of technology, human labor is replaced. The resulting increase in productivity requires an increased use of energy and other resources whose mechanical transformation is replacing human labor. Companies involved in this process must prefinance the required input factors before the start of each production period, i.e., investments, for which external and/or equity capital is required. Technical progress is constantly changing the relationship between labor and capital investment in favor of the latter. The companies therefore have to generate a corresponding surplus in order to finance the interest on borrowed capital or to achieve the return on equity in order to cover the investment risk. The lower limit for the overall growth needs to stabilize the value-added process and is therefore increased under the same conditions with the integration of further specialized workstations and production sites whose survival is only possible if a sufficient surplus is achieved. These must reach at least the required production level due to increasing economies of scale in order to be able to cover costs. Innovation and the diffusion of technical possibilities continually increase labor productivity. Automations amplify and replace human activities. In order to be able to maintain the current level of employment despite the reduced demand for human input to produce a certain level of output (especially within a higher level of wages that goes hand in hand with increased productivity), the production volume must grow sufficiently. But with escalating growth limits, this option is foreseeable. Consequently, what is needed is a transformation that leads to a state of supply that is firstly independent of growth, secondly socially acceptable and thirdly sufficiently modest to remain within ecological limits in the face of systematically failing decoupling attempts.

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Fields of Action of a Reduction Strategy i.

Sufficiency. Reducing demand while wavering equalization is a fatal misunderstanding, even in academic circles. The sufficiency principle confronts consumptive self-realization excesses merely with one obvious question: Which energy slaves and comfort crutches can be used to liberate exuberant ways of life and society as a whole for its own benefit? Which scraps of our prosperity congesting everyone’s life and on top of that require time, money, space and ecological resources, could be gradually phased out? In a world of information and information overload that nobody can handle anymore, clarity and deceleration become psychological self-protection. The increasingly “exhausted self” (Ehrenberg 2004) embodies the dark side of a merciless hunt for happiness, which increasingly turns into overload. Help only promises to be limited to a range of consumer activities and objects that can be managed with limited attention resources. For this, a time-economic theory of sufficiency (Paech 2013) provides motives beyond moral appeals, namely, based on the rational use of scarce time resources. Self-limitation and, above all, sedentariness—global mobility has long since displaced consumption as the most climate-damaging form of self-fulfillment—form the basis for an equally responsible and enjoyable way of living. ii. Subsistence. Consumers can (re) acquire the competence to meet certain needs manually beyond the use of commercial markets. If the volume of industrial production was to be halved step by step, then the likewise reduced quantity of wage labor still required could be redistributed in such a way that a full employment would go hand in hand with a 20 h work week. At the same time, time resources would be released for self-supply. Community gardens, swaprings, neighborhood networks, gift shops, community facilities of equipment, repair cafés, etc., would not only lead to a gradual de-globalization, but also to a reduced need for technology, capital, transport routes and more autonomy. When products are used for a longer period of time, independently maintained, repaired, groomed and, if necessary, acquired as needed, not only does the dependency on industrial supplies decrease, but also on monetary income. The same applies to the common use of everyday objects. iii. Regional economics. Many of the consumer needs, which cannot be reduced by either sufficiency or subsistence, can be satisfied in regional markets, based on much shorter value chains. Regional currencies could tie purchasing power to the region and thus decouple them from globalized transactions. For example, the efficiency advantages of a money-based division of labor would continue to be used, but within a more compact, ecologically compatible and crisis-resistant framework. In particular in food production, community use and service life extension (repair, maintenance) regional economic enterprises could act because that is where the potential of subsistence ends. iv. Remodeling the rest of the industry. The remaining need for supra-regional industrial added value would focus on the optimization of existing objects,

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namely through refurbishment, renovation, conversion, refurbishment, intensification of use, etc., in order to ensure supply services as production free as possible. Markets for used and repaired goods as well as commercial sharing and rental systems also contribute to this. The new production of material goods was confined to maintaining a constant stock of material goods, that is to say, replacing only what can no longer be sustained by meaningful extension of useful life. In addition, the manufacture of products and technical equipment would be based on a repairable and both physically and aesthetically durable design. v. Institutional actions. The political framework conditions of a post-growth economy, which can only be grasped incompletely here, include land, money and financial market reforms, with Attac’s demand for a financial transaction tax and a wealth tax. Complementary regional currencies, introduced parallel to the Euro and backed by a negative interest rate, could support the coordination of regional economies. Based on the distribution logic presented above, each person would be entitled to the same annual emission quota, which could be interpersonal and time-transferable. Modified forms of enterprise such as cooperatives, non-profit organizations or concepts of solidarity economy could dampen profit expectations. Subsidies—above all in the fields of agriculture, transport, industry, construction and energy—would have to be canceled in a concise manner in order to reduce the ecological damage caused thereby as well as the public debt. Measures to facilitate reductions in working hours are indispensable. In addition, a soil sealing moratorium and decommissioning programs for industrial areas, highways, parking lots, airports, etc., would urgently be needed in order to unseal and renaturalize them. Alternatively, facilities for the use of renewable energy could be built on disused motorways and airports to reduce the catastrophic landscape of these technologies. Furthermore, legal precautions against planned obsolescence are indispensable. A drastic reform of the education system would have to aim to impart technical skills, not only in order to be able to reduce the need for new production through self-production and, above all, maintenance and repair measures, but to become more money-independent. Based on this background, extension of useful life can be considered as a prerequisite for a post-growth economy in two ways: (a) To enable repair measures to meet consumer demand with less industrial production. At the same time, this reduces the required income and the working time required to finance a certain level of consumer functions. Thus, conditions are created in the first place to make the dismantling of industrial systems socially acceptable. However, this perspective marks a socio-political paradigm shift: Instead of the distribution of gains or the transfer of state benefits, a concept of empowerment for the more or less independent preservation of material goods takes over. This at least gradual autonomy over industrial external supply could be characterized as resilience.

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(b) Supply-side growth drivers could be mitigated more effectively the less capitalintensive the supply structures are. Where artisanal, regionally economic, particularly intense high-labor characterized value creation processes are reactivated or developed, the basis for growth is partially deprived of the basis for capital appreciation. Urban subsistence embodies that ideal-typical form of care that largely gets along without any investment or capital investment. Independent, non-commercial repair services are likely to be most important. For, in contrast to other forms of subsistence (for example in the context of the so-called commons), these practices follow up the industrial value-added cycle, on the one hand, by using the previous consumption functions, but, on the other hand, by slowing down the resource flow required for this by extending the useful life. The supply side of a post-growth economy combines three supply systems, which have already been mentioned above (ii, iii and iv), namely subsistence benefits, regional economics and a residual amount of industrial production capacity. The resulting overall system would be characterized by a significantly reduced, at the same time constant production level (in the sense of aspect a) and secondly by a lower capital requirement (in the sense of aspect b) (Fig. 3). The transformation required for this would presuppose that the supply demand remaining after the exhaustion of all demand-side reduction potentials (sufficiency) has been shifted as far as possible from the industrial sector to the other two areas. In order to replace industrial production with subsistence practices, a reactivation or redevelopment and social diffusion of repair practices would be sought after. End users would thus have a changed role: they would become “prosumers” (Toffler 1980). In contrast to the traditional concept of subsistence, self-care practices aimed 20 Hours of „normal“ Weekly Working Time

+

Commerzialized Dector of the Economy

Global

Regional

20 Hours for NonMarket Production

Non-commerzialized Sector

Local

Long Supply Chains

Medium Supply Chains

Self-supply Subsistence

Industrial Specialization Global Sourcing Offshoring Durable Product Design Modularity/ Reparability Aesthetic Durability Efficiency /Closed Loops

Repair Services Maintenance/ Optimization Renovation/ Conversion Recycling of Goods Sharing Services Crafts / Organic Farming Regional Money

OwnProduction production Own Maintenanceand and Repair repair Maintenance SharingGoods goods Sharing

Output Labour Intensity Capital Intensity

Fig. 3 Supply systems of a post-growth economy

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at extending the useful life are closely interlinked with industrial production. Independent repair services can be seen as an extension of industrial supply chains. If repair activities extend the average service life, industrial production can be more productive, i. “Stretched,” so that with a smaller amount of output the same supply is possible. Thus, if less production capacity is needed, the total necessary capital decreases at the same time. This process would reverse the more than 200-year industrialization process, especially as capital-intensive manufacturing would gradually become obsolete through labor-intensive (subsistence) activities. The latter could be derived from market-free resources, namely (a) own time, (b) craft activities and (c) social networks for noncommercial exchanges of services. Nevertheless, subsistence, if focused on repair activities, would not be seen as a direct alternative to industrial production, especially as it does not substitute it, but even presupposes its existence. Strictly speaking, goods production can be seen as the material basis for any repair. Overall, this results in an extended product life cycle. The industrial production and subsequent use of a product is followed by measures of extended useful life, which are subdivided into subsistence-based and professional repair services. Included are the careful use, care, maintenance, repair, modular renewal and independent repair service by prosumers. Thereafter, the further use of disassembled components as well as possibly an adjustment of defective items to other uses, such as by “upcycling,” i.e., the recombination of non-repairable elements into functional objects. Otherwise, the storage, sale or free disposal of disassembled individual parts at collection points and repair shops forms another phase of the values added system, which can also be supplemented by the transfer of fully functional goods to “giveaway markets” or “money free stores” or other forms of usage intensification. The outcomes of this are the interfaces between commercial and non-commercial maintenance or repair measures. That which would overwhelm prosumers, falls into the field of professional craft enterprises from the regional economy. Moreover, their role would be to tend to replace the industrial sector with de-globalized value chains, which have a lower degree of specialization and lower capital intensity. Once all opportunities have been exhausted to reduce industrial production to an ecologically transferable level through sufficiency, subsistence and regional economic value creation, its function is limited to substituting those objects whose useful life can no longer be extended. Thus, a reduced stock of material goods is maintained, which can be optimized by a slowed-down revolution successively, but is no longer extended quantitatively. This would correspond to the “steady-state economy” conceived by Daly (1977). The necessary transformation could be supported if other social actors and institutions were involved. The resulting concept of action is sketchily outlined as follows. 1. 2.

Consumers of consumer goods Independent care, maintenance and (easy) repair of objects Informal networks in a social environment Organization of self-help for extension of service life: transfer of experience and skills, exchange of tools, active assistance in repair

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3.

Institutionalized networks and facilities Repair cafés as places of exchange of experience, open workshops, hackerspace, repair facilities within larger institutions, upcycling initiatives 4. Schools, out-of-school learning venues and other educational institutions Service life extension as a general educational goal; involvement of volunteers in diffuse-open repair facilities between school and society 5. Vocational schools: including repair in ESD 6. SMEs in the region offer seminars and workshops and excursions for pupils and apprentices 7. Professional repair service Retailers and companies offer seminars and workshops to equip users with repair skills (“prosumer management”) 8. Retailers Repair services as a supplement to the sale of new goods, trade measures against (planned) obsolescence, adjusting assortments by selecting long-lived and repairable goods at a retail level 9. Municipal Economic Development Support of service life extension concerns: repair facilities (e.g., as part of the AWB, creation of open workshops), use of used goods (e.g., decentralized system of shopping centers), promotion of appropriate startups (e.g., concept of the settlement of repair shops) 10. Bundling and using the experience of active repairers Prevention of obsolescence by passing on relevant experience (application of the principle “Citizen Science”), best/worst practices, “ifixit,” “Murks-nein-danke” 11. Development of a repair seal Information systems for users; disclosure of repair characteristics labeling of corresponding businesses as an expansion of the repair seal 12. Legislative measures legislative initiatives to stop obsolescence; design guidelines, etc. In order to foster a culture of repair and awareness of inventories of materialistic goods, consumers would need to be provided with time resources that would arise anyway as a result of the inevitable reduction in industrial output. If it were possible to slowly reduce commercial value creation by 50% and redistribute the then-needed wage labor so that the average working time would be about 20 h per week, there would be 20 extra weekly hours that could be devoted to supplementary subsistence benefits—especially repair and conservation measures. Furthermore, social capital in the form of networks of self-help, the exchange of experience and the division of labor would be needed. Corresponding institutions and locations are exemplified in Table 3. Thirdly, a reorientation of the education system is needed to foster craftsmanship, repair knowledge and the ability to assume responsibility. The creation of a culture in which people repair their belongings open up far more than frugal ways to resource efficiency, namely new perspectives on social integrity and human well-being. But what are the basic requirements for learning and education processes to transform contemporary consumer societies into post-growth economies?

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Educational Approaches for a Post-growth-Friendly Society First of all, we must focus on a concept of education whose guiding principle is education for sustainable development (see UNESCO 2017). Although this educational goal is a cross-disciplinary task at school for all subjects and school types, topics that address sustainability issues are niche or ticked off in the form of project weeks in the weeks leading up to the holidays. What is needed, however, is an educational concept that permeates all areas and aims at “gaining a new perspective in life through a targeted cultural change toward education that is capable of sustained action” (Finke 2009, p. 8). The aspiration to promote the ability to perceive, recognize and understand complex relationships does not do justice to the current focus on formal education. More and more areas of knowledge are conquering the curricula, which are merely conveyed through the dissemination of information, while the contents are sorted out, the understanding of which requires the acquisition of implicit and explicit procedural and declarative knowledge. Preparations for performance tests to check the extent to which content has been understood and stored are often referred to as “bulimia learning” because it is not about understanding complex relationships. Rather, the focus is on the precise retrieval of individual facts and disjointed sets of knowledge, the content of which is questionable anyway, because these are acquired for a short-term memory performance and are not integrated into complex processes of cognition. “An education that takes the needs of today seriously cannot be exhausted in such special segments and must not run away from the big picture. More and more, we are feeling that we have lost the connections between the fragments of our knowledge in a depressing way and that we are missing these” (Finke 2009, p. 5). When reasoning in connection with the enrichment of subject content, that the exponential increase of mankind’s knowledge necessarily involves a permanent selection and consolidation of knowledge to be taught, then it is overlooked that these do not accumulate, but also “get lost” (Finke 2009, p. 9). Much would gradually be removed from social use and left to oblivion, because it would be incompatible with new knowledge or would simply be considered old-fashioned and part of yesterday’s. With an example of the loss of procedural and declarative knowledge regarding maintenance, repair and mending of everyday objects can easily be understood. It can therefore be said with some justification that the phenomenon of obsolescence also exists in education.

Obsolescence in Education It is indisputable that people have inherited the curiosity and the urge to expand, supplement or substitute knowledge and have made considerable progress in terms of knowledge and resulting inventions and developments. This process is evoked by the permanent resolution of homeostatic or homeodynamic knowledge which was

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previously considered sufficient to handle a request. This contradictory relationship between relatively stable states of knowledge and learning as a dynamic process leads to a conflict between the preservation of traditional knowledge through transmission and appreciative preservation on the one hand and progressive teaching, learning and research processes in society and science on the other hand. This results in a competition which does not do justice to the complex problems of our world. Simon states that wherever knowledge is preserved, learning is prevented at the same time (see Simon 2002, p.). Conversely, this means that the removal of homeostatic states always involves the destruction of knowledge. Because the process of constantly renewing and expanding knowledge is essentially positively connoted, one rarely sees the implications of the loss of obsolete knowledge. An unreflective positive connotation of learning processes, which feeds the prevailing paradigm of progress and growth, ignores the fact that critical reflection on the loss of stable proven and conservative values, norms and educational content fail. On top of that, an awareness for the loss is suppressed and moreover ignored. “How can we learn not to learn to obtain the values that we consider worth preserving?” (Simon 2002, p. 155). The conscious decision not to learn is a necessary condition for the stability of the relationship between the individual and the specific social system in which it is located. “Non-learning thus appears to have a dual function, namely as the prevention of structural changes in a system due to disruptive environmental events, such as preserving valuable knowledge and ability” (Schmidt 2003, p. 48). While the disappearance of many sets of knowledge and experience is rarely experienced as a loss, the tremendous increase in the data flowing into us and the consequent exponential growth of information and intelligence to be processed, often results in a frightening increase in complexity. “The potentially debilitating excess of “objectively available” information that exceeds the receptivity and recyclability of the mind appears (…) as a permanent surplus of life options (…)” (Baumann 2009, p. 67). To navigate the world, people must radically simplify and ignore much. The variety of possible perceptions despite the selection is structured by two complementary movements of world appropriation: reduction and construction. Complexity reduction helps a person to break down comprehensive issues and to remove what is essential to him/her. Construction makes it possible to merge these sub-aspects into a meaningful whole. Today, however, human life is condensed with so much information, offers, news, products, services, mobility and events that the difficulty of distinguishing important from unimportant has increased immensely. In order for an event to lead to an active, ethical reflection on its conditions and consequences, it is necessary to provide a constructive achievement based on an ethical selection cascade. Such new designs do not succeed without investing their own time, because moral judgment and feelings can neither be automated nor delegated to anyone—which is all the more important if post-growth-suitable lifestyles are to be implemented.

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Devaluation Processes in Education The ability of man to bring about a relatively stable change in thinking, feeling and behavior through insight and experience in learning processes and moral reflection is the prerequisite for a reflective relationship to himself and to the world. This is generally understood by the concept of education, which is not limited to a canon of culturally significant knowledge and the teaching of formal skills. Rather, it aims to open up new categories of perception and possibilities for action in order to critically question alleged normality and normativity (Fischer 2013, p. 45). Building on this, society is challenged not only to confront children and adolescents with basic educational content, but also to empower them to use their minds to shape their own future. This includes not only the ability to distinguish relevant from irrelevant information, but also the willingness to take a realistic look at supposed truths and alternatives that are linked to the mantra of growth. Children who are born into this world, however, first perceive the unsustainable use of resources as a norm that is not only lived out without contradictions, but is also propagated as necessary and meaningful—at least as a means to an end in order to gain more individual freedom. Meanwhile, the flood of consumption options and events threatens to devalue or hide all that is not self-optimization or maximum perceived enjoyment. Constantly worrying that they will not meet the ever more demanding prosperity dictates, more and more children, adolescents and adults are losing themselves in a whirlwind of desires, temptations and opportunities, because digital communication channels in particular constantly convey new “must haves” which are time-consuming to learn about and about which need to be decided. Children and young people hardly have a chance to escape this. The gloomy point of consumer welfare, however, is that eventually even the decision not to take something, further overloads the lack of time and overstimulation. In order to be able to break out of this vicious cycle of conditioning, social normalization and habit as well as hardening against cognitive perception dissonances, suitable role models are needed, from which alternative patterns of perception and options for action can be derived. The promotion of independent, critical observation and assessment of socially accepted norms is formally anchored in the canon of education, but in the reality rarely implemented in favor of sustainable education. However, the establishment of this ability is necessary for an autonomous assessment and evaluation of relevant facts. In this case, autonomy can be interpreted as the ability to formulate criteria for a successful life that is sustainable with regard to material limitation, largely independent of prepunched templates. The formal education system is currently unable to put sustainability-related issues such as the extension of the useful life of artefacts into a holistic, meaningful and sensually stimulating context. Rather, it submits to the hegemonic consumer logic, which demands that everything can be retrieved conveniently and prefabricated in order to integrate as many things as possible into a human life. But that leaves no room for one’s own design, hence the sense of achievement, having created an object

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with one’s bare hand. Undermining is the ability to provide appropriated things with the materialized symbols of their own identity. These include, among others, maintenance, upkeep, changes made by hand and repairs. When traditional, previously valued skills and knowledge resources that were necessary for everyday repair routines were gradually forgotten or deliberately removed from the canon identified as relevant to education, this loss not only affects the repair skills themselves, but also the associated values and norms. In order to deal with objects that surround us every day, it can help both to penetrate their design principles and to pay attention to their material. Rilke described handcrafted objects as friends and accomplices and urged them to keep the knowledge of the value of things. “The living, the experienced, the knowing things are running out and cannot be replaced. We may be the last to know such things. The responsibility rests upon us not only to preserve their memory […], but their human values “(Rilke 1925/1987, p. 898).With the mass appearance of identical cultural assets, man’s relationship with these surrounding everyday objects was lost and accordingly the appreciation thereof, which was expressed in the demonstration of maintenance and care as well as by repair. The transmission of repair competencies and experiences requires structures and places that facilitate learning processes on an interpersonal level, because in particular the necessary implicit knowledge cannot be conveyed through textbooks. “If you want to acquire knowledge, you have to act, and if you want to impart knowledge, you have to give behavioral instructions” (Simon 2002, p. 156). Repair cafés are such places.

Experiential Knowledge and Self-efficacy as a Social Process Experience knowledge integrates both explicit and implicit knowledge and arises from practical activity itself, but also from the reflection on successes and mistakes that arise from the process of an action. It consists of sensory impressions and experiences, but also of emotional and/or rational evaluations that feed on moral and ethical implications. Our subjective perception, our knowledge, as well as our manual skills shape our ability of self-conception and thus the conviction to be able to apply our knowledge in a meaningful way. Evolutionarily, experience is the key to knowledge. Sennett (2014) believes that even the most abstract skills begin with physical practice. However, manual skills and the ability to get to the bottom of technical problems cannot be simplified or streamlined. Acquiring them requires time and patience. However, the mental understanding of a problem as well as reflecting on the underlying meaning can only be achieved through persevering practice, because any attempt to shorten this process by excluding all sources of error in advance also eliminates the possibility of feedback from actions that do not turn out to be expedient. In such processes, the potential for gaining autonomy lies in self-performance (Sennet 2014). In order to achieve this, Sennett says, “The work process must do something

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unpleasant to the orderly mind—expecting it to temporarily engage in chaotic conditions: wrong ways, botched beginnings and dead ends. But in reality, this mess is […] much more than just chaos” (Sennett 2014, p. 216). From social practices, which feed on search and approach processes, new action routines can arise. The need for competence is not only linked to the achievement of certain skills and abilities, but also to feelings of self-confidence and self-efficacy (see Krapp and Ryan 2002).

Repair Knowledge as an Educational Contribution to Sufficient Practices While a few decades ago, repair was still a matter of educational relevance and a concern for maximum longevity, today they are neither in the consciousness of children and adolescents, nor in that of adults. This applies in particular to skills which go beyond mere knowledge of the operation of products. In this respect, both the craftsmanship and the (experiential) knowledge of and about the repair—as cultural history over thousands of years traditional form of knowledge—have largely fallen victim to an educational programmatic obsolescence. Three types of obsolescence play a role here: the planned or approving obsolescence finds its expression at a distance from the canon of education in general education schools. The fact that no societal forces opposed this loss of knowledge and experience can be explained by the parallel emergence of the consumer and disposable society. The elimination of the repair knowledge from the general consciousness finds its equivalent in the change of consumption. In this context, Finke refers to Gregory Bateson, who sets systems of thought in analogy to the organization of ecosystems. Even in rule-based systems, there are circulatory structures “… of production, consumption and reduction, only this time related to information and not to matter, […]” (Finke 2009, p. 13). Because a state-controlled education submits to political and economic structures, it is not surprising that the repair is discontinued as an educational task in favor of production-based content. In this sense, it is equally a form of economic obsolescence, because education costs money, whose use must ultimately reflect the prevailing economic style. The fact that the learners themselves cannot demand the communication of repair-relevant competences corresponds to the attitude that reproduces itself through routines—conserving resources is therefore discredited as rather unfashionable and “uncool.” The neglect of acquiring even simple repair knowledge points to a psychological obsolescence. With this devaluation on an institutional as well as individual level, not only the repair knowledge disappeared for a few decades, but also the associated skills lost their value. This includes manual skills, knowledge and concentration, in order to adequately penetrate the design of the device in case of need for repair. The need to experience such basal processes, to understand them systematically in the sense of Bateson and to organize them collectively, has led to a repair movement which, since 2009, opposes the process of devaluation. After the founding of the first Repair Café in Amsterdam, hundreds of places have emerged

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that can be practiced to at least partially avoid the fate of a “supply of defects” (Illich 1973). Instead of reproducing mastery of knowledge, community skills can emerge. Repair cafés constitute places where people not only receive recognition but also success experiences through their own repair and who are empowered to readjust consumer and evaluation standards. In order to promote this process, the Technical Education of the University of Oldenburg aims to (re) implement repair as an educational task in the education of general education schools with a DBU-funded project (see RETIBNE 2016). The development of repair instructions should help to enable learners to professionally identify and analyze sources of error and to restore the functionality of technical artifacts. In addition, engagement with their functions should contribute to a deeper understanding of the complex environmental issues and social implications of manufacturing, use and disposal. Therefore, methods and materials will be developed which, in the sense of education for sustainable development, take on the ethical, environmental, economic and political aspects related to repair and forms of obsolescence on an interdisciplinary level. The aim of the research project is to permanently integrate the repair culture into the relevant teacher training programs (technology, works, computer science, AWT) and indirectly into the teaching of general education schools. However, it is feared that inclusion in the formal structure of conventional teaching, in which performance and competitive pressure are everyday issues, also means returning to a careful use of resources and artefacts, as well as their ethical and moral consequences. The knowledge also is fragmented into information packages so that it is removed from its original goal. The aim of the project is therefore to develop alternatives to the remote reality of traditional teaching together with schools, with which post-growth-suitable content can be conveyed.

A Young Adult Repair Café Among other things disinterest in School and the loss of motivation that goes through much of the lesson are due to the lack of realism in teaching. Consequently, it is impossible to actually form a feeling of responsibility in those who, due to their developmental phase, desperately need this self-awareness and an authentic reaction to their environment. In order to counter the staged form of negotiating social problems with a real situation and to get learners out of the “as if mode” of school reality, a repair café was founded in Oldenburg. It is run by young people from an Integrated Comprehensive School. The students (IGS Kreyenbrück) have been organizing a repair café in the facilities of a church within the framework of the subject “Learning through Engagement” since 2016 and thus became the winner of the nationwide “Service Learning Competition” in the spring of 2017 (Stiftung Active Citizenship 2017). This repair café provides a permeable space between formal education, voluntary work and community. The pupils were first trained in technical skills in the bicycle repair workshop of the school as part of an elective course in technology. Therefore,

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they were prepared before they started their assignment in the repair café and set up the new location with help of volunteers. Once a month, they repair bicycles, provide the guests with coffee and cake, accept orders and forward them to the repairers. Students preparing to become teachers supported the repair café by developing upcycling projects as part of a seminar and then offering these in the repair café. For example, guests had the opportunity to learn how to clean a computer or how to convert conventional flashlights to LED bulbs. Concrete and authentic experiences, resulting from the examination of the object to be repaired, the active appropriation of repair knowledge as well as the dialogue with visitors of the repair café create a process in which the thinking (and evaluation) results from the action and reverting to it (see Gudjons 1998). While the knowledge acquired at school only rarely brings about efficacy, practical learning in the repair café contributes to a return to resilient practices because the education resulting from the joint repair as well as from the social interaction associated with it does not follow a given instructed action, but from the problem to be solved. Discourse and practice, for which time, patience and concentration are needed, receive their due place in these learning spaces. Knowledge of experience, which as a rule is not given special attention in the education system, is accentuated here. While formal education is limited mainly to formal, systematic and explicit knowledge that can be expressed in words, numbers or formulas, in the repair café implicit knowledge becomes enormously important. This form of knowledge can only be communicated to a limited extent and mainly through the activity and the intuition that is rooted in the experience and in the emotionally tangible values and norms. The key to the rediscovery of the repair culture lies in the combination of specialist knowledge, which is conveyed in an action-oriented way in the classroom and a direct application in a societal context. In this educational process, which at least for now “slows down the circulation of goods between assembly lines, shops and waste bins” (Baumann 2009, p. 65), children, adolescents and adults are equally involved as visitors and repairers. The deep satisfaction inherent in a successful repair is a counterpoint to the consumer society, which only “flourishes as long as it successfully ensures that the non-gratification of its members […] is ongoing” (Baumann 2009, p. 64).

Do We Need to Rethink Materialism? Since the discourse on sustainability is stuck in a technological impasse and is slowly failing, the return of growth-critical analysis and social drafts is only logical. The décroissance, degrowth and post-growth movements are fighting back against countering the expansionist zeitgeist, which alternately calls for the implementation of social and liberal achievements of the modern age. While some of the growth-denying designs may be different in some specific points, they are united by the propensity to reactivate a covert mindfulness to material artifacts. It almost seems paradoxical:

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He who wishes to protect the ecosphere, must protect the industrial objects—namely against their devaluation. This is not the only paradox: an association awakened by the discourse of the “postmodern,” “postindustrial” or even “post-material” era, that involves an equally dematerialized, sustainable lifestyle, seems to be based on a tragic misunderstanding. In fact, as the symbolism and the identity-creating effect of goods have increasingly moved into the forefront of consumer behavior rather than material values, their faster wear and tear is almost inevitably predestined. Precisely because the cultural charge of products—the aesthetic design, the symbolic code, the software, etc.…— i.e., the immaterial dimension is increasingly guiding the action, the value attached to them by consumers can be destroyed all the more easily, namely by the mere transcoding of what promises to be modern and thus culturally compatible. Williams (1996) emphasizes: “Our problem is not that we are too materialistic, but rather that we are not materialistic enough.”

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der Entwicklung der Lebens-, Nutzungs- und Verweildauer von ausgewählten Produktgruppen, Zwischenbericht. Freiburg: Öko-Institut e.V. Prakash, S., et al. (2016). Einfluss der Nutzungsdauer von Produkten auf ihre Umweltwirkung: Schaffung einer Informationsgrundlage und Entwicklung von Strategien gegen “Obsoleszenz”. Freiburg: Öko-Institut e.V. RETIBNE. (2016). http://www.retibne.de. Rilke, R. M. (1925/1987). Briefe, Band 3. Frankfurt/Main. Rivera, J. L., & Lallmahomed, A. (2012). Environmental implications of planned obsolescence and product lifetime: A literature review. International Journal of Sustainable Engineering, 1–11. Schlacke, S., et al. (2015). Stärkung eines nachhaltigen Konsums im Bereich Produktnutzung durch Anpassungen im Zivil- und öffentlichen Recht. Dessau-Roßlau: Institut für Umwelt- und Planungsrecht, Universität Münster. Schmidt-Bleek, F. (1993). Wieviel Umwelt braucht der Mensch? MIPS – das Maß für ökologisches Wirtschaften. Berlin et al. Schmidt-Bleek, F. (2000). Das MIPS-Konzept. Weniger Naturverbrauch – mehr Lebensqualität durch Faktor 10. München. Schmidt, S. J. (2003). Was wir vom Lernen zu wissen glauben. In H. Siebert (Hrsg.), Gehirn und Lernen (S. 40–50). Bielefeld. http://www.report-online.net/recherche/einzelhefte_inhalt.asp? id=519. Schridde, S., & Kreiß, C. (2013). Geplante Obsoleszenz. Entstehungsursachen, Konkrete Beispiele, Schadensfolgen, Handlungsprogramm, Gutachten im Auftrag der Bundestagsfraktion Bündnis 90/Die Grünen. Schumpeter, J. A. (1934). Theorie der wirtschaftlichen Entwicklung, 4. Aufl. Berlin. Schumpeter, J. A. (1950). Kapitalismus, Sozialismus und Demokratie. München. Sennett, R. (2014). Handwerk, 5. Aufl. Berlin. Simon, F. B. (2002). Die Kunst, nicht zu lernen. Und andere Paradoxien in Psychotherapie, Management, Politik, 3. Aufl. Heidelberg. Stahel, W. (2001). Sustainability and services. In: M. Charter & U. Tischner (Hrsg.), Sustainable solutions (S. 151–164), Sheffield. Stevens, B. (2003). Industrial strength design. How Brooks Stevens shaped your world. Milwaukee, Cambridge. Stiftung Aktive Bürgerschaft. (2017). http://www.aktive-buergerschaft.de/. Toffler, A. (1980). The third wave. New York. UNESCO. (2017). UNESCO-Weltaktionsprogramm: Bildung für nachhaltige Entwicklung. http:// www.bne-portal.de. von Weizsäcker, E. U. (1989). Erdpolitik. Darmstadt. Wieser, H., & Tröger, N. (2015). Die Nutzungsdauer und Obsoleszenz von Gebrauchsgütern im Zeitalter der Beschleunigung. Williams, R. (1996). Problems in materialsm and culture: Selected essays. New York. Wölbert, C. (2015). Murks und Mode. Experten diskutieren über Ursachen der Wegwerfkultur. http://www.heise.de/ct/ausgabe/2015-1-Experten-diskutieren-ueber-Ursachen-der-Weg werfkultur-2483475.html. WRAP. (2011). Case study; Specifying durability and repair for LCD televisions—A case study of three LCD televisions to identify end encourage durability and repair. Banbury, England: Waste & Resources Action Programme (WRAP). WRAP. (2011b). Case study; Specifying surability and repair for laptops—A case study of a HewlettPackard notebook to Iilustrate and encourage durability and repair of laptop computers. Banbury, England: Waste & Resources Action Programme (WRAP). WRAP. (2011c). Buying specifications guides for durability and repair—Washing machines, fundamental good practice. Banbury, England: Waste & Resources Action Programme (WRAP). Zachmann, K. (1995). Wirkungsgrad contra Wertegrad. Zur Entstehung des Konfliktes zwischen der technischen und der ökonomischen Auffassung vom Wirtschaften. Technikgeschichte, 62, 103–132.

More Efficiency is Not Enough. Capabilities and Limits of the Circular Economy Hans Holzinger

Findings and Definitions What Does Circular Economy Mean? The circular economy is a model of production and consumption in which existing materials and products are used, shared, leased, reused, repaired, refurbished and recycled for as long as possible. In this way, the life cycle of the products is extended. In practice, this means that waste should be reduced to a minimum. Once a product has reached the end of its life, resources and materials are maintained as much as possible in the economy. They can be used productively again and again to generate added value.1 A circular economy system is a regenerative system in which resource use and waste production, emissions and energy waste are minimised by slowing down, reducing and closing energy and material cycles; this can be achieved through durable design, maintenance, repair, reuse and recycling. The opposite of the circular economy is usually called linear economy (also “wear management”). A large proportion of the raw materials used is disposed of or burned after the life cycle of the products; only a small proportion is reused.2 The German term “Kreislaufwirtschaft” is often still associated solely with waste management and recycling. “However, the concept of the circular economy goes far beyond: The aim is the targeted design of entire production systems and national

1 http://www.europarl.europa.eu/news/de/headlines/economy/20151201STO05603/kreislaufwirtsc

haft-definition-und-vorteile. 2 https://de.wikipedia.org/wiki/Kreislaufwirtschaft. H. Holzinger (B) Robert Jungk Library for Future Issues, Salzburg, Austria e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_14

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Fig. 1 Simple scheme of a circular economy. Source European Parliament, https://www.europarl. europa.eu/news/de/headlines/economy/20151201STO05603/kreislaufwirtschaft-definition-undvorteile

economies in the form of closed cycles and the associated elimination of waste, emissions and energy and material losses of all kinds”.3 (Fig. 1). Environmental protection has started with waste separation. Waste collection systems and waste management laws have ensured that waste is no longer simply disposed of, but recycled wherever possible. The circular economy goes one step further. Instead of burning waste or disposing it in landfills, it is returned as new raw materials to a production process that creates as much value as possible. This means that the waste of one is the raw material of the other—this is the basic logic of successful recycling models. This concept therefore goes much further than optimising recycling. By involving the entire life cycle—including the supply chain in product development—we ensure that no waste is generated in the first place. This is also referred to as cascade use. In addition, there are material innovations from an ecological point of view that reduce the need for non-renewable resources. Examples are easier dismantling (modular design) and a simplified general overhaul for the reuse of used components (so-called remanufacturing).4 Once a product has reached the end of its life, 3 https://www.terra-institute.eu/abschied-von-der-wegwerfwirtschaft-und-neubeginn-im-paradi

gma-der-circular-economy/. 4 Ebd.

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resources and materials remain as much in the economy as possible. They can be used productively again and again to continue generating added value. “Refurbishing” refers to the quality-assured overhaul and repair of products for the purpose of reuse and “remarketing”. “Refurbishing” refers to the quality-assured overhaul and repair of products for the purpose of reuse and remarketing. The refurbishing of products for IT and office equipment (PCs, monitors, software, printers, copiers, toner and ink cartridges), components from motor vehicles, production machines and entire production lines is of considerable economic importance.5 “Urban mining” refers to the recycling of raw materials. Raw materials are no longer mined from the mines, but they are reused where they are already available in large numbers—in the cities—(“secondary raw materials”).6

Zero Emission and Zero Waste as Future Scenarios In addition to the decarbonisation of the economy (“zero emission”), great hopes are placed in the circular economy (“zero waste”). This is demonstrated by the EU programme on recycling management launched in 2015.7 More than 2.5 billion tonnes of waste are produced in the European Union annually.8 The EU is currently updating its waste legislation to promote the transition from a linear to a circular economy. The European Parliament gives several reasons for this: Rising demand for raw materials and scarcity of resources: A number of important raw materials are only available to a limited extent. As the world population grows, so does the demand for raw materials. Dependence on other countries: Some EU-countries are dependent on other countries for raw material supply. Effects on the climate: The extraction and use of raw materials have a significant impact on the environment. They also increase the energy consumption and the CO2 emissions. A smarter use of raw materials can reduce CO2 emissions.9 Waste prevention, eco-design, reuse and similar measures could, according to the EU Parliament, lead to net savings of 600 billion Euros per year or 8% of the annual turnover of companies in the EU and at the same time reduce greenhouse gas emissions by 2–4%. The transition to a circular economy could bring benefits such as less pressure on the environment, increased security of supply of raw materials,

5 https://de.wikipedia.org/wiki/Refurbishing. 6 https://nachhaltigwirtschaften.at/de/sdz/projekte/urban-mining.php. 7 http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/573899/EPRS_BRI%282016%295

73899_EN.pdf. 8 http://www.europarl.europa.eu/news/de/headlines/economy/20151201STO05603/kreislaufwirtsc

haft-definition-und-vorteile. 9 Ebd.

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increased competitiveness, innovation, growth and employment. It is assumed that an additional 580,000 jobs will be created in the EU.10 The “Circular Economy” package approved by the European Commission in 2015 includes measures “designed to facilitate Europe’s transition to a circular economy, promote global competitiveness, promote sustainable economic growth and create new jobs”.11 The proposed measures would help to close the product life cycle by increasing recycling and reuse and would benefit both the environment and the economy. The revised legislative proposals on waste set clear targets for waste reduction: A common EU target for recycling 65% of municipal waste by 2030; a common EU target for recycling 75% of packaging waste by 2030; a binding target for landfilling to reduce landfilling to a maximum of 10% of municipal waste by 2030; a ban on landfilling separately collected waste; promotion of economic instruments to prevent landfilling; simplified and improved definitions and harmonised calculation methods for recycling rates across the EU.12 It proposes concrete measures to promote reuse and to stimulate industrial symbiosis—transforming the by-product of one industry into the raw material of another; economic incentives for manufacturers to market more environmentally friendly products and to support recovery and recycling schemes (e.g. for packaging, batteries, electrical and electronic equipment, vehicles). In addition, the amount of food waste is to be halved by 2030.13 The revised Waste Framework Directive can promote design measures that facilitate the reuse of products. In addition, Member States are required to take measures that “promote the use of resource-efficient, durable, repairable products. Particular attention should be paid to the recycling of products in which critical raw materials are used. Re-use is particularly called for in the areas of waste electrical and electronic equipment, textiles and furniture, and waste prevention in industry “taking into account the best available techniques”.14 A specific issue is the prevention of food waste. In the European Union, an average of 179 kg of food per person is thrown away every year. This amounts to a total of around 89 million tonnes of waste per year. According to a study financed by the EU entitled “Preparatory study on food waste across EU 27”15 42% of all food thrown away is caused by private households. 39% end up in the garbage bin of manufacturers, 14% in the gastronomy sector and 5% in the garbage pin of retailers.16

10 Ebd. 11 http://ec.europa.eu/environment/circular-economy/index_en.htm&prev=search. 12 Zit.

n. Umweltbundesamt (2017, 69). 69. 14 Ebd. 69. 15 http://ec.europa.eu/environment/archives/eussd/pdf/bio_foodwaste_report.pdf. 16 Zit. n. https://www.wien.gv.at/umweltschutz/abfall/lebensmittel/fakten.html. 13 Ebd.

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Reasons for the Transition to Circular Economies There are ecological, economic and cultural reasons for the transition to a circular economy and a culture of repair. The extraction of raw materials is accompanied by environmental destruction and emissions. Whether in opencast mining, in mines or during fracking—the ecological consequences are problematic. In the countries of the South, there are in addition poor working conditions and the “raw materials curse” of countries in which international corporations exploit raw materials cheaply in questionable contracts with national government elites.17 The consumption of raw materials rises with the growth of the global economy. So far, it has hardly been possible to decouple economic growth from resource consumption. This leads to a shortage of critical raw materials and supply risks. The rise in commodity prices is seen as an important market signal for scarcity trends. Moreover, commodity monopolies lead to dangerous dependencies. China is the main producer of 29 of the 67 most important minerals and metals used in industry.18 The “Fraunhofer-Institut für System- und Innovationsforschung” has identified metals necessary for the future development of the European economy for which there is an increased supply risk (=critical metals). These include rare earths, platinum, niobium, magnesium, antimony, gallium, indium, tungsten, beryllium, tantalum and cobalt. A study for Austria showed a similar situation. However, the economic importance of the metals niobium and cobalt for Austria is even greater than the EU average (Fig. 2).19 Three strategies are mentioned for waste prevention: Development of sustainable products/services, (1) that get by with a few critical metals, (2) that are durable and (3) that allow easy and efficient recycling of critical metals. “Urban mining” is thus becoming increasingly relevant. The fourth strategy—and this leads to the cultural dimension—is to overcome the throwaway economy and the transition to resource-saving lifestyles with more sufficiency. Consumption traps and rebound effects must be taken into account (see below). It will not be possible to reduce resource consumption drastically without a cultural turnaround or a “turnaround in prosperity and consumption”.20 A modular design of products, which enables better reparability and a higher recycling rate of resources, as well as a deliberate longer durability of products in the usage cycle can contribute to reducing the extraction of raw materials from nature. However, rebound effects and market incentives, which make it lucrative to offer devices with a not too long holding period, have generally nullified efficiency gains so far. It is about producing better, but also about producing less. This will only be possible if (1) we give a new direction to growth and shift consumption from material to 17 Ziegler

(2016), Holzinger (2018a). (2017, 69). 19 Ebd., 70. 20 Schneidewind (2018, 172ff). 18 Umweltbundesamt

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Fig. 2 Critical raw materials and their economic importance. Source Umweltbundesamt Österreich

non-material goods and (2) we make friends with post-growth strategies in highly productive economies.21

Rebound Effects and Obsolescence Rebound effects describe the phenomenon that increases in efficiency as well as resource-saving products and services are reabsorbed by increased consumption in other areas or additional services.22 A distinction is made between several forms of rebound effects: Direct rebound: A service that has become more efficient can thus be offered more cheaply. What becomes cheaper is in greater demand. Indirect rebound: Those who save costs by increasing efficiency consume more in other areas, which also consumes energy and resources. Resource effect: In the sense of efficiency, a finite resource is replaced by another finite resource. This does not solve the goal of a regenerative system. In addition, there is talk of a transformation effect: Technical efficiency improvements change consumer behaviour, which affects infrastructures and social norms. An example: The Internet makes online shopping possible and thus leads to more consumption. The mental rebound states that savings through more efficient technologies can lead to a moral self-legitimation of additional consumption. One 21 Holzinger 22 Santorius

(2016a). (2012), Lange and Santorius (2018).

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example is more economical, fuel-efficient vehicle engines, the savings of which are offset by more kilometres driven and complex new car accessories.23 The electric car, as a second or third car, could lead to a further increase in material consumption.24 The term “obsolescence” comes from Latin and can be translated as “wear and tear, growing old”. Planned obsolescence describes the phenomenon in which manufacturers deliberately design products for a limited service life in order to be able to sell new equipment more quickly. Examples include washing machines or cars with internal parts that are prone to failure, printers with limited printing capacity, or PCs where no new software can be installed. In Germany and Austria, relevant studies have been carried out.25 It is difficult to prove planned obsolescence. The companies speak of “optimum service life” and refer to the cost/price ratio of products to be taken into account. Cultural obsolescence is a special form of premature wear and tear. This is understood as the strategy of companies to quickly present products as outdated in order to bring the new models to the man/woman.

Outlooks and Future Strategies Materials of the Future New materials and material composites should make it possible to provide the desired products/services with low energy and material consumption. These innovative materials include carbon fibres, glass fibres, semiconductors, natural fibres in plastics and nanomaterials. Carbon fibre-reinforced plastic (Carbonfaserverstärkter Kunststoff (CFK)) is a lightweight construction material that enables drastic reductions in the weight of components and products and is used in increasing quantities when low weight and high strength are required. According to the Austrian Environment Agency, global demand is expected to quadruple between 2012 and 2020.26 Glass fibre-reinforced plastic (Glasfaserverstärkter Kunststoff (GFK)) is mainly used as cladding and in areas where good formability and great freedom of design are required. Both composites are increasingly used in vehicle and aircraft construction, for wind turbines, in the construction industry as well as in the manufacture of sports equipment and other applications. The Austrian Federal Environment Agency points out that the production of CFK and GFK materials currently produces too much offcuts, on average 30%. In addition to the advantages, there are also disadvantages. The thermal utilisation and processing 23 Handbuch

Nachhaltigkeit (o. J.). (2016). 25 Eisenriegler (2016), Kreiß (2014), Schridde (2014); www.murks-nein-danke.de/murksmelden. 26 http://www.umweltbundesamt.at/fileadmin/site/publikationen/REP0614.pdf, 71. 24 Knierim

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of CFRP for recycling are problematic, since the combustion of fibre-reinforced plastics can lead to clogging of the exhaust air purification filters. Moreover, it has not been clarified whether there is a risk of lung cancer at temperatures above 650 °C— similar to asbestos.27 Nanomaterials also have a high potential to reduce material consumption and contribute to extending service life. But even with nanomaterials it is not yet clear how they behave in terms of use and waste treatment.28 The use of renewable raw materials comes closest to a circular economy. This is the raw material wood in the construction industry and in the furniture sector. Wooden houses are enjoying increasing popularity because they can now be prefabricated in factory buildings. In addition, the raw material is available locally. A Vorarlberg company is now building multi-storey wooden houses. Wood is reproducing sustainably in Austria’s forests. Actually in just 60s, the wood for one storey of a multi-storey residential building is produced.29 Experiments are also being made with wood as a material for other products. Meanwhile there are bicycles with frames made of bamboo.30

Blue Economy and Cradle to Cradle “Blue Economy” was founded by the Club of Rome member and entrepreneur Gunter Pauli. The colour “blue” has a symbolic meaning and refers to the colour of the ocean, the sky and the earth when viewed from outer space. It seeks and presents solutions for products and services that are adapted to or inspired by nature. We are talking about “systemically cascading business models”, in other words usage chains. The conviction behind it: “Nature offers space for companies and people who produce more from less”.31 Such innovative solutions are collected and disseminated through the website. For example, the retrieval of metals from electronic devices using microbes or the installation of wind turbines on houses or power poles is suggested. A well-known example is the proposal not to throw away coffee grounds, but to use it as a nutrient for cultivation of mushroom cultures. Once the mushrooms have been harvested, the amino acid-rich residual product would serve as a feed source for chickens—a classic cascade use. In addition, physical processes copied from nature are to be used. For example, researchers have learned from zebras and from

27 Ebd.,

71. 71. 29 http://www.proholz.at/holzistgenial/. 30 http://www.starkbamboobike.com/. 31 Blue Economy Alliance: www.blueeconomy.de. 28 Ebd.,

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the construction of termite mounds how buildings can be naturally ventilated with the help of pressure and temperature differences, thereby reducing operating costs.32 The approach is exciting as systemic solutions are sought and inventors from all over the world are invited to communicate their “Blue Ideas”. The acid test, of course, will be the marketability of the ideas, because this is the only way for them to become established. “Cradle to cradle” was developed in 2002 by Michael Braungart, a German chemist, and William McDonough.33 In contrast to eco-balances, which cover products or services “from the cradle to the grave”, it means as much as “from the cradle to the cradle”. The model is the cycle in nature, in which no waste is produced. The Environmental Protection Encouragement Agency34 founded by Braungart certifies companies that produce products according to the C2C principle. It does not refer to recycling, but to “upcycling”. In Austria, for example, the media house Gugler and the company Erdal, which produces cleaning agents (“Green Frog”), are C2C-certified. Assessment: The idea is captivating, but unfortunately far from the current reality of production. In addition to the still too cheap raw materials, which make recycling appear to be profitable only to a limited extent, the problem lies above all in the enormous variety of mixed materials and compounds, which make it impossible to recycle again while maintaining the quality of the raw materials. The authors themselves demonstrate this using the example of a plastic handle on a piece of furniture that contains around 40 substances alone.

Digital Circular Economy In the context of saving resources, digitisation can be regarded as ambivalent. Even faster production, even more added value as well as the new possibilities of online marketing and online trade can lead to a further increase in resource consumption. In addition, there is the energy consumption of digital infrastructures.35 On the other hand, hopes are set for the improvement of material flow management by means of new data storage possibilities. Henning Wilts and Holger Berg from the Wuppertal Institute are referring to this as a “digital circular economy”.36 The two identify problems in the current recycling industry, which are to be solved by appropriate data information systems. The quality of recycled materials is unclear very often. There is a lack of information, e.g. on purity, type and quantity of admixtures, etc., which are decisive for reuse. The volume availability of recycled materials 32 Pauli

(2010), Pirgmeier (2013). and McDonough (2013). 34 EPEA (o. J.): Environmental Protection Encouragement Agency, http://epea-hamburg.org/de. 35 Lange and Santorius (2018). 36 Wilts and Berg (2017). 33 Braungart

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on the market is not transparent; economies of scale are therefore not achieved and recycled materials become unnecessarily expensive. In addition, unclear information about the quality of secondary material would increase the effort for users to find and use it, which would also make pricing more difficult and increase the effort for concluding contracts and guarantees. In addition, secondary material is generally perceived as being of lower value. There is a lack of knowledge about the general applicability of secondary material. Externalities (e.g. air and environmental pollution) in the primary markets would not be priced in due to a lack of information and would result in unjustified price advantages for primary material. Therefore, recyclability is not perceived as a competitive advantage.37 Experts propose the following strategies to address these shortcomings through digital technologies38 : Cyber physical systems will have the effect that products carry information through at least the entire production process. This information would have to cover the entire life cycle for the circular economy and also include environmentally relevant information such as material composition or “footprints”. This would meaningfully reduce information asymmetries. Sensoring allows Industry 4.0 data collection and generation in real time. The exact location of the waste, its exact material composition, etc. could be recorded precisely in time and place (“Fast Data”) and passed on to other companies, which then plan their production processes. Data analytics applications (“Big Data”) could then provide and project information on further uses, sensible logistics solutions, etc. The matching of supply and demand for waste and secondary raw materials can be revolutionised by Internet-based solutions, as they are already used today in the distribution of products. A future automated market and logistics platform (so to speak “Uber for waste”) could reduce search and transition costs; in addition, economies of scale could be achieved more easily as there is more clarity about material quantities. Wilts/Berg assume that products to be recycled could automatically generate their markets “themselves” in the future via the Internet of things by marketing themselves on such platforms on the basis of information on composition and possible uses. Some recyclates are already cheaper today than primary material, and this could be increased even further. Recyclability would then also become a technical competitive advantage. It also relies on block-chain applications, on which the virtual currency Bitcoin, for example, is already based on today. Information should be passed on anonymously and encrypted using block-chain technology, without the competitors being able to draw conclusions about its own production technologies. However, it should be kept in mind that block-chain technologies are extremely energy-intensive (Fig. 3).

37 Ebd., 38 Ebd.,

4. 5.

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Fig. 3 World Overshoot Day indicates from which point in the year a country has exhausted the natural consumption to which it is entitled within the sustainability limits. Source https://www.ove rshootday.org/

Measuring Environmental Consumption and the 8-Ton Society The ecological footprint, developed by William Rees and Mathis Wackernagel39 measures the consumption of renewable resources and compares it with biocapacity, i.e. what grows on earth in one year. The consumption of fertile areas for food, energy and raw material production, housing and infrastructure as well as the emission of greenhouse gases (“climate footprint”), which is represented as climate area, is recorded.40 The international global footprint network team41 annually calculates the ecological footprint of almost every country in the world and compares it with the global biocapacity available per country or continent. In addition, there are footprint calculators that make it possible to determine one’s personal consumption of nature.42 39 Rees

and Wackernagel (1996), aktuell, Wackernagel and Beyers (2010). wird jene Fläche, die man bräuchte, um die pro Jahr ausgestoßenen Treibhausgase wieder in der Natur zu binden. 41 https://www.footprintnetwork.org/our-work/ecological-footprint/. 42 Zum Beispiel: www.meinfussabdruck.at. 40 Eingerechnet

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If we were to live within the limits of what is annually renewable and if the global biocapacity were to be distributed equally among all the inhabitants of the earth, every human being would have about 2 ha of natural areas available to satisfy all his or her needs. Countries with a high level of consumption, high consumption of fossil energy and a meat-centred diet are considerably higher—Germany or Austria cover almost 10 ha, the USA almost 20 ha.43 The “Ecological Rucksack” developed by Friedrich Schmidt-Bleek44 provides information on the total consumption of resources for goods and services. The consumption of materials for production is recorded, as is the energy consumed in the manufacture and use of the goods. For example, an average-sized car weighing one tonne has an “eco-backpack” of around 20 tonnes. A mobile phone comes on a resource backpack of 75 kg.45 A resource calculator created by the Wuppertal Institute allows users—in analogy to the footprint calculator—to calculate in total the ecological rucksack in the areas of housing, consumption, nutrition, mobility, leisure and holidays.46 The survey will ask, for example, about the number and type of household appliances, the number and size of cars in the household, the average weekly distance travelled by car, the use of public transport and bicycles, etc. The resource calculator is linked to a research project in which personal and household characteristics are surveyed in addition to consumption patterns. To date, 50,000 anonymous profiles have been evaluated and divided into ten consumption groups. The results show large differences regarding raw material consumption. The 10% with the lowest consumption come to 14.4 tonnes per year, while the group with the highest consumption has 41.6 tonnes, which means three times as much. While the share for housing is largely constant at around 35% among all groups, the share for mobility among the high consumer groups is increasing overproportionally. It is also revealing that differences in resource consumption had no influence on the life satisfaction of the users.47 The authors of the Wuppertal Institute assume a sustainable resource rucksack of 17 tonnes per person by 2030 and eight tonnes per person per year in a long-term perspective. This means that the greatest savings potentials lie with those groups with medium and high resource consumption. It is particularly important that these groups change their habits, lifestyles and ways of use.

43 Living

Planet Report 2018, https://www.wwf.de/living-planet-report/. (2006). 45 http://informationszentrum-mobilfunk.de/umwelt/mobilfunkendgeraete. 46 www.ressourcen-rechner.de. 47 Schneidewind (2018, 162ff). 44 Schmid-Bleek

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Extended Prosperity Indicators The ecological footprint and the ecological rucksack, as well as calculations of the global CO2 budgets that may still be consumed, for example, to reach the 2-degree or 1.5-degree target, indicate the scale to which dematerialisation and decarbonisation of our economy and our consumption and lifestyle are necessary. But we also need new measured values to measure economic success, quality of life and prosperity. The gross domestic product certainly has strong points because it covers all monetary variables of an economy. It measures everything that is produced or consumed in an economy over a certain period of time and offset against money. But GDP has weaknesses: It says nothing about the distribution of the economic product and it does not include those services that are provided without money but are indispensable for the functioning of a society and an economy based on the division of labour, such as raising children or volunteering. Nor does GDP distinguish between expenditure that leads to a better quality of life and spendings that are necessary to repair damage caused by society. Any car accident, damages caused by climate change, costs caused by illness or crime increase GDP, but not quality of life. It would be better to keep such social and ecological defensive costs as low as possible from the outset.48 With extended prosperity indicators, attempts are made to compensate for the deficits in GDP. Examples are the OECD’s “Better Life Index”, the “Genuine Progress Indicator” and the “Happy Planet Index” of the New Economic Foundation or the “Wohlstandsquittet” of Denkwerk Zukunft.49 The European Commission encourages the Member States to implement extended indicator systems. These are used, for example, in monitoring the sustainable development goals, which themselves have a wide range of indicators.50 Statistics Austria collects ecological, social and extended economic indicators in Austria and compares them to GDP.51 Kate Raworth’s so-called doughnut economy represents an important contribution to an extended measurement of prosperity.52 The Stockholm Resilience Centre53 has defined nine ecological boundaries, so-called planetary boundaries, the exceeding of which leads to crises. Four of the areas—climate change, land usage, loss of biodiversity, nitrogen and phosphorus inputs to soils—have meanwhile crossed the critical threshold. Raworth links the planetary boundaries with parameters necessary 48 Holzinger

(2018b, 94ff).

49 www.oecdbetterlifeindex.org/de;

http://genuineprogress.net/genuine-progress-indicator/; http:// happyplanetindex.org/; www.wohlstandsquintett.de/. 50 Im September 2018 wurde der erste EU-Statusbericht „Sustainable Development in the Europe Union“ veröffentlicht. Dieser listet zu allen Zielen den jeweiligen Status der EU-28 in anschaulichen Grafiken auf. https://ec.europa.eu/eurostat/documents/3217494/9237449/KS-01-18656-EN-N.pdf/2b2a096b-3bd6-4939-8ef3-11cfc14b9329. 51 http://www.statistik.at/web_de/statistiken/wohlstand_und_fortschritt/wie_gehts_oesterreich/ index.html. 52 Raworth (2018); www.kateraworth.com. 53 www.stockholmresilience.org/research/planetary-boundaries/planetary-boundaries/about-theresearch/the-nine-planetary-boundaries.html.

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Fig. 4 Doughnut economy by Kate Raworth combines the ecological limits with the social needs for a good life. Source https://diefarbedesgeldes.de/die-donut-oekonomie-von-kate-raworth/

for a livelihood and a good life, such as sufficient food, access to clean water, education, income, etc., and presents both in her “doughnut economy” model. The outer circle shows the planetary boundaries, the inner circle shows the social basis, i.e. the economic and social foundations of life—hence the “doughnut” economy. This shows that in countries with high economic performance the planetary borders are crossed and countries with low economic management usually show deficits in the social sector.54 The goal of sustainable development must be to harmonise the two areas—ecology and social affairs. Extended wealth measurements do not per se lead to a change towards sustainability, but they do expand perception and make progress and regression measurable. We also need new narratives about a good life that are not based on renunciation, but on an increase in quality of life (Fig. 4).

54 Die

Länderwerte sind einer Datenbank der Universität Leeds zu entnehmen. https://goodlife. leeds.ac.uk/countries/.

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New Narratives About the Good Life A 100% circular economy is not possible in complex modern economies. Social metabolism means “colonisation of nature”, as Marina Fischer-Kowalski aptly puts it.55 Or to put it simply, “you can’t make an omelet without breaking eggs”. Only the early hunter-gatherer societies lived actually in the cycle with nature. As soon as humans began to extract non-renewable raw materials from the earth in order to produce tools, they also left behind waste, for example, in the form of metals that no longer function, but only rot slowly. In the context of sustainability, however, the extent of the “colonisation of nature” is decisive. The consumption of resources was low in the artisan-producing societies, but has experienced a quantum leap with the industrial mode of production. We can produce more and more goods in less and less time with less and less human labour. Ecological overstretching also existed in pre-industrial times. Collapses, however, were locally limited.56 Today, however, the global spread of industrial and consumer capitalism means that ecosystems are globally threatened, even if the vulnerabilities are distributed differently. Many authors now take the view that a sustainable development path will only be possible with post-growth strategies for the rich countries and new development models for the poorer countries. It is also necessary to turn away from the western consumption and life model, which is based on high meat consumption, car-fixed mobility and high goods throughput.57 Models of modern subsistence and sufficiency are proposed.58 Findings such as the “externalisation society”,59 the “imperial mode of living”60 and the “external supply syndrome”61 must be taken into account in the prosperity statistics, so the claim. The author pleads for an expanded understanding of prosperity in eight dimensions: Goods prosperity, food prosperity, activity prosperity, time prosperity, place prosperity, relationship prosperity, education prosperity and democracy prosperity (Fig. 5).62 But can people be encouraged to renounce? Sociologist Harald Welzer inverts the question by pointing out what we can renounce and what we can gain through a decelerated and dematerialised lifestyle.63 What is needed are images of a new prosperity and other narratives of a good life. The change towards resource-saving and decarbonised societies thus require a cultural change, initiated by pioneers, so-called change agents.64 55 Fischer-Kowalski

et al. (1997). (2005). 57 Jackson (2017), Ax and Hinterberger (2013), zusammenfassend: Holzinger (2016a). 58 Vgl. Paech (2012). 59 Lessenich (2016). 60 Brand and Wissen (2017). 61 Paech (2017). 62 Holzinger(2016a). 63 Welzer (2014), www.futurzwei.org. 64 Schneidewind (2018). 56 Diamond

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Fig. 5 Expanded understanding of prosperity in eight dimensions. Source Own illustration, Holzinger (2016b)

When dealing with goods, the so-called 6-R rules provide a useful compass. Six principles are proposed—in this order: “Rethink”: Do you really need that?; “Refuse”: Always refuse to buy everything immediately—you can also borrow something; “Reduce”: Buy products that require less resources and energy; “Reuse”: Use consumer goods for as long as possible and pass them on when you no longer need them; finally “Repair”: Repair things or have them repaired—and only last—“Recycle”: Enable recycling of things that can no longer be used (Fig. 6).65 Repair cafes and repair platforms,66 mainly organised on a voluntary basis, contribute to a new culture of maintenance and repair. “Upcycling”, i.e. the recycling of waste for new products, also plays an important role. However, it is the task of politicians to set the appropriate framework conditions.

6546

Holzinger (2016b, 88). www.repanet.at; Fixit: https://de.ifixit.com.

66 Repanet:

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Fig. 6 “6R” rules dealing with goods. Source Holzinger (2016b), own illustration

Circular Economy and Sufficiency Being shapes our consciousness essentially. People conditioned to competition and consumption may find it difficult to imagine alternative ideas of a good life. But new ways of thinking also transform realities. Ideas of an economy (again) embedded in nature and society could become important impulses for change.67 The question is what does “developed” mean: The glass towers of the London and Frankfurt banking districts or millions of small and medium-sized businesses that operate regionally oriented without outside capital and shareholders hungry for profits; the multi-storey highways of autofixed metropolises or the beginnings of “Green Cities” that return urban space to people; industrially processed, over-sugared and overly salted food from large corporations or fresh and unpackaged food from local farmers?68 It has not yet been determined whether the transition to sustainable societies will succeed. Various barriers are identified in transformation research:69 The “Gefangenendilemma” (prisoner’s dilemma) states that when it comes to protecting common property, it is not enough for individuals to change their behaviour, but that everyone must take part in protecting it, which requires binding collective rules. 67 Raworth

(2018), Jackson (2017). wie “Wall Street. Geld schläft nicht” (Oliver Stone), “The Green Lie” (Werner Boote, Kathrin Hartmann) oder “System Error” (Florian Opitz) zeigen die Sackgasse des finanzmarkt- und profitgetriebenen Kapitalismus auf, Dokumentationen wie “Tomorrow. Die Welt ist voller Lösungen” (Cyril Dion, Melanie Laurent), „Die Zukunft ist besser als ihr Ruf“ (Theresa Distelberger u.a.) oder “Zeit für Utopien” (Kurt Langbein machen deutlich, dass die Zeit für Alternativen gekommen ist und dass diese möglich sind. 69 Holzinger (2013). 68 Filme

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The “Verantwortungsdilemma” (dilemma of responsibility) expresses the fact that the consequences of environmentally damaging behaviour generally do not directly reach the polluters—actions and their consequences fall apart in time and space. Effects of climate change are only felt with a time lag and affect those who are already living in crisis zones most severely. The exhaust fumes and the noise of car traffic are felt most by pedestrians, cyclists and people living near roads. Consistently thought, car exhaust fumes would first have to be directed inside the car in order to comply with the polluter-pays principle, but this will never happen. The “Komplexitätsfalle” (complexity trap) states that the consequences and systemic effects as well as tilting effects of environmentally damaging behaviour are usually underestimated. It is only damage that makes us smarter, but then it can be too late The “Nahedilemma” (close to dilemma) refers to the fact that despite an insight into the need for change, one’s own immediate advantage usually wins. We know that flying is harmful to the climate, but when the holiday season is approaching and cheap offers are tempting, bookings are made. There is also supposed to be a psychological defence against catastrophe reports according to the motto: “If everything goes down the drain, then at least live well now”. The so-called Yolo principle: “You live once only”.70 Last but not least, the danger of overestimating political controllability is stressed. The question is whether interventions in the lifestyles and consumption patterns of people in democracies are at all capable of winning a majority.71 Conclusion: Problems cannot be solved by the means that cause them. The resource-intensive consumption and lifestyle with its high energy, material and mobility costs cannot be trimmed to “ecological”. Only lifestyles and ways of doing business that strive for regional value creation instead of globalised chains of goods and pantries, prefer human relationships to deceptive consumer promises and give “growth” a new meaning can offer future paths. People were not necessarily more environmentally conscious in the past. In pre-industrial civilisation, however, the limited technical possibilities marked the limits of natural exploitation. Craft production was per se sustainable. For about a hundred years, the industrial production method has enabled the mass output of goods, the fossil energy base the permanent expansion of the movement radii. 1.5 million new cars leave the assembly lines every week. Automobility is the big new business in the transition countries. The digital revolution not only enables the further automation of production—deserted factories are now the norm—but also leads to the exhaustion of the last consumer reservoirs in saturated markets through individualised advertising and aggressive online marketing.72 The transfer of the consumerist-mobilist economic model to the whole world leads to a further escalation of the orgies of destruction.

70 Mohrs

(2018). et al. (2018), www.wu.ac.at/fileadmin/wu/d/i/ign/IGN_Position_Paper_Jan_2018.pdf. 72 Staab (2016). 71 Blühdorn

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If everything is technically feasible, then we as societies must set ourselves those limits that put a stop to the further exploitation of nature and even make its regeneration possible. This is not an easy undertaking in comfort societies. But ecological limitation does not mean that we will live worse in future, but simply differently. And sufficiency does not mean renunciation and self-mortification, but getting by with what is sufficient. Here, philosophical traditions, such as the doctrine of the “right measure” in antiquity or Henry David Thoreaus’ approach of deliberately chosen simplicity73 can be used, as can the lines of thought of an expanded economic concept, such as feminist economics,74 social psychology and satisfaction research.75 Movements like “Voluntary Simplicity” (USA), “Downsizing” (GB), “Decroissance” (F), “Friluftsliv” (Norway), “Einfach gut leben” (BRD) or “SOL” (A) are evidence that sufficiency is currently regaining importance. It is not yet clear whether the ideas of sufficiency will gain ground and thus become relevant for another economy, but they are regarded as possible “islands of transition” in consciously shrinking economies. Support also comes from movements from the countries of the South, such as “Buen vivir”76 in Latin America, an approach that grants nature its own right, or the “post-development” movement,77 which is committed to an independent path for development.

References Acosta, A. (2015). Buen vivir. Vom Recht auf ein gutes Leben. München. Ax, C., & Hinterberger, F. (2013). Wahnsinn Wachstum. Was uns in die Krise führt - und wie wir wieder herauskommen. München. Bennholdt-Tomsen, V. (2010). Geld oder Leben. Was uns wirklich reich macht. München. Blühdorn, I., et al. (2018). Transformationsnarrativ und Verantwortlichkeit. Die gesellschaftstheoretische Lücke der Transformationsforschung. Wien. www.wu.ac.at/fileadmin/wu/d/i/ign/IGN_ Position_Paper_Jan_2018.pdf. Brand, U., & Wissen, M. (2017). Imperiale Lebensweise. Zur Ausbeutung von Mensch und Natur in Zeiten des globalen Kapitalismus. München. Braungart, M., & McDonough, W. (2013). Intelligente Verschwendung. The Upcycle. Auf dem Weg in eine neue Überflussgesellschaft. München. Diamond, J. (2005). Kollaps: Warum Gesellschaften überleben oder untergehen. Frankfurt. Eisenriegler, S. (2016). Konsumtrottel. Wie uns die Konzerne austricksen und wie wir uns wehren. Wien.

73 Henry David Thoreau meint etwa: „Der Mensch ist reich in Proportion zu den Dingen, die sein zu lassen er sich leisten kann.“ (Thoreau 2007), Peach (2012) formuliert ähnlich, wenn er meint: „Reich ist nicht, wer möglichst viel hat, sondern möglichst wenig braucht“. 74 Exemplarisch: Bennholdt-Tomsen (2010). 75 Bahnbrechend Fromm (1976). 76 Acosta (2015). 77 Escobar (2008), vgl. auch Funk, Sarah: Post-Development: Gegen die Verwestlichung der Welt. https://www.suedwind-magazin.at/gegen-die-verwestlichung-der-welt.

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Escobar, A. (2008). Die Hegemonie der Entwicklung. In K. Fischer et al. (Ed.), Klassiker der Entwicklungstheorie. Von Modernisierung bis Post-Development (pp. 264–277). Wien. Fromm, E. (1976). Haben oder Sein. Die seelischen Grundlagen einer neuen Gesellschaft. Stuttgart. Handbuch Nachhaltigkeit. (o. J.). Suffizienz, Effizienz und Rebound-Effekt. http://nachhaltig-sein. info/unternehmen-csr-nachhaltigkeit/handbuch-nachhaltigkeit-folge-3-suffizienz-effizienz-undder-rebound-effekt. Holzinger, H. (2013). Wie kommt es zum Wandel? Transformationsforschung im Kontext von Bildung für nachhaltige Entwicklung. In Jahrbuch Bildung für Nachhaltige Entwicklung 2013 (pp. 43–52), Wien. Holzinger, H. (2016a). Von nichts zu viel. Für alle genug. Perspektiven eines neuen Wohlstands. München. Holzinger, H. (2016b). Diskurse über (Post-)Wachstum in der aktuellen Fachliteratur. Wien/Salzburg. Download: www.wachstumimwandel.at. Holzinger, H. (2018a). Hilfe durch faire Strukturen. In Wiener Zeitung 20.9.2018. Holzinger, H. (2018b). Wie wirtschaften? Ein kritisches Glossar. Salzburg Lange, S., & Santorius, T. (2018). Smarte grüne Welt? Digitalisierung zwischen Überwachung, Konsum und Nachhaltigkeit. München. Jackson, T. (2017). Wohlstand ohne Wachstum. Leben und Wirtschaften in einer endlichen Welt. Kreiß, C. (2014). Geplanter Verschleiß. Wie die Industrie uns zu immer mehr und immer schnellerem Konsum antreibt - und wie wir uns dagegen wehren können. Wien. Knierim, B. (2016). Ohne Auto leben. Handbuch für eine andere Mobilität. Wien. Lessenich, S. (2016). Neben uns die Sintflut. Die Externalisierungsgesellschaft und ihr Preis. München. Mohrs, T. (2018). Zwischen dem Reden und dem Tun. In Jahrbuch Bildung für Nachhaltige Entwicklung 2018 (pp. 108–117). Paech, N. (2012). Befreiung vom Überfluss. Eine Streitschrift. München. Paech, N. (2017). Von organisierter Unverantwortlichkeit zur Postwachstumsökonomie. In Anders wachsen. Hrsg. Von Maximilian Becker u.a. München (pp. 201–222). Pauli, G. (2010). The blue economy. Summary for UNEP. www.unep.org/pdf/OP_Feb/EN/OP-201002-EN-ARTICLE7.pdf. Pirgmeier, E. (2013). Alternative Wirtschafts- und Gesellschaftskonzepte. Wien. Download: www. wachstumimwandel.at. Raworth, K. (2018). Die Donut-Ökonomie: Endlich ein Wirtschaftsmodell, das den Planeten nicht zerstört. München. Rees, W., & Wackernagel, M. (1996). The ecological footprint. Santorius, T. (2012). Der Rebound-Effekt. Über die unerwünschten Folgen der erwünschten Energieeffizienz. http://www.santarius.de/wp-content/uploads/2012/03/Der-Rebound-Eff ekt-2012.pdf. Schneidewind, U. (2018). Die große Transformation. Eine Einführung in die Kunst gesellschaftlichen Wandels. Frankfurt. Schmidt-Bleek, F. (2006). Nutzen wir die Erde richtig? Die Leistungen der Natur und die Arbeit des Menschen. Frankfurt. Schridde, S. (2014). Murks. Nein danke. Was wir tun können, damit die Dinge besser werden. München. Staab, P. (2016). Falsche Versprechen: Wachstum im digitalen Kapitalismus. Hamburg. Thoreau, H.D. (2007). Walden. Oder: Leben in Wäldern. München (Neuausgabe). Umweltbundesamt. (2017). Entwicklung des Abfallvermeidungsprogramms. Wien. http://www. umweltbundesamt.at/fileadmin/site/publikationen/REP0614.pdf. Wackernagel, M., & Beyers, B. (2010). Der Ecological Footprint. Die Welt neu vermessen. Hamburg. Welzer, H. (2014). Selbst denken. Eine Anleitung zum Widerstand. Frankfurt. Wilts, H., & Berg, H. (2017). Digitale Kreislaufwirtschaft. Die Digitale Transformation als Wegbereiter ressourcenschonender Stoffkreisläufe. Wuppertal. Ziegler, J. (2016). Verändere die Welt. München.

Principles of Tech-Ökonomie: Future of Economics for 2050 Ashutosh Bhardwaj

Introduction It is been our endeavour to locate a planet like Earth in the “Milky Way Galaxy” but to no avail. So far, humans are the most intelligent of creatures known to “Homo Sapiens”. Domination of our uniquely placed planet by the human race has been taught as “History of our Civilisation”. Humans have shaped the glorious past of this planet in such a way that most of the species would not even survive without a humane treatment from us. Our advanced civilisation has taken us too far from the other such silently suffering species upon whom our race has wreaked destructive havoc. Natural calamities, clogging air, choking cities, receding forest cover, threats of global warming, ozone layer depletion and many other factors have led to the realisation of the looming dangers on our civilised society. Conscious minds are now talking about the sustainability, circular economy, eco-friendly technologies and green financing without much impact so far. Time has come to introspect and shift towards inclusive “planet-centric economic growth model” from the earlier exclusive “human-centric development models”. Governance should change focus from the “production of wealth” to the “survival of planet”. This paper aims to illustrate how the analysis of the wealth of data on production, distribution and consumption of goods and services can permeate into economic policy changes.

A. Bhardwaj (B) Geological Society of London, London, UK e-mail: [email protected] New York Academy of Sciences, New York, USA Geological Society of America, Boulder, USA European Geoscience Union Res., Munich, Germany © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_15

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Definition of “Tech-Ökonomie” The term Economics can be traced back to the ancient times when Greeks used to restrict it for the household frugality. Centuries later, we are living in a world where again technological advancements have brought in focus the “Oikos” or house. Hence, in this paper, a new term—“Tech-Ökonomie” has been coined to study, monitor and analyse the tenets of economics by incorporating the latest technological tools based on the pulse of the “eco-unit” and “household”. Principles of “Tech-Ökonomie” emphasises upon a strategy for transformation of economies into such circular economies where human subsystems merge into a global ecosystem sustainably (Fig. 1).

2.0 Why “Tech-Ökonomie”? Scottish philosopher Adam Smith (https://en.wikipedia.org/wiki/Economics) (1776) defined what was then called political economy as “an inquiry into the nature and causes of the wealth of nations”. Robbins (https://en.wikipedia.org/wiki/Economics) affirmed that previous economists have usually centred their studies on the analysis of wealth: how wealth is created (production), distributed and consumed; and how wealth can grow. Even centuries later economic realities of the world are still clearly reflected by studying the distribution of wealth. Pressure groups around the world have succeeded in garnering about $140tn (£106tn) which is 50% of the total global wealth confined to 1% people. According to the Credit Suisse’s global wealth report’2017 (https://www.theguardian.com/inequality/2017/nov/14/worldsrichest-wealth-credit-suisse.Tue), the world’s 3.5 billion most impoverished adults who constitute 70% of the working-age population of the world account for just a 2.7% of global wealth. This is a starkly skewed result of our economic policies adopted so far.

HUMAN CENTRIC DEVELOPMENT MODELS

PLANET CENTRIC GROWTH MODELS

PRESENT

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Fig. 1 Transformation to inclusive “planet-centric economic growth models” from the earlier exclusive “human-centric development models”

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209 •PREDICTIVE MODELLING

BIG DATA

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Fig. 2 Impact of digitalisation, technology and innovations

These economic inequalities of wealth or income among nations of different geographies having different demographic and socio-economic background cannot be studied with perfection due to lack of data. As OECD (http://www.oecd.org/ sti/ieconomy/data-driven-innovation.htm) has underlined “… data-driven innovation (DDI) has become a key pillar of twenty-first-century growth, with the potential to significantly enhance productivity, resource efficiency, economic competitiveness, and social well-being”. Technological innovations will facilitate the more comfortable collection, transmission, storage and analysis of data in future. Scientific advancements, especially in clinical and medical, biotechnological, information technology and nanotechnology fields, will transform the manufacturing, production and services sectors. Digitalisation, technology and innovations have led us to enter into the next phase of revolution where Big Data, Internet of things (IoT), machine learning and artificial intelligence (AI) will prevail (Fig. 2). Future of Economics shall not be held hostage to the old schools of Economics, rather we should let our future generations bloom into an intertwined world. It is postulated that the tide of data usages shall be harnessed to energise the growth engine of a global economy with each “household” and “eco-unit” as a central theme. By the year 2025, we will witness the transformation of the worldwide system of governance into a plethora of technology-driven systems. Hopefully, the second half of the twenty-first century is poised to see our planet growing symbiotically where humans will still dominate but will not decimate other species.

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Principles of “Tech-Ökonomie” Transformation to “Tech-Ökonomie” We need to radically transform and restructure our economic systems to harness the fullest potential of scientific advancements and rapidly evolving technologies. A close web has to be evolved by using open data from multiple sources with a collaborative effort. A legal and regulatory framework is essentiality to make such kind of system to operate in an unhindered manner. Digital data alone is not a recipe for the success of developmental interventions. There are elaborate sets of data fragmented in different formats created in compliance of inconsistent systems. Standard sets of quantitative and qualitative techniques to incorporate contextual information for data interpretation will have to be evolved to gain actionable insights for decision makers. The monitoring and evaluation tools that we deploy needs to be interconnected and responsive in real time. Every day new data analysis techniques will emerge, and our systems shall be adaptive enough to react to this rate of change. A prerequisite to the transformation of economic systems will be to formulate an ideal National Accounting System incorporating all the essential elements of the economic cycle. An interdisciplinary field including artificial intelligence, machine learning, statistics and database systems enable us to discover patterns and develop algorithms that can learn from experience and focus on sense-making for actionable information.

Human Subsystems The fag end of the economic cycle is generally a household, and presently no attention is paid to evaluate the impact of any policy initiative on it. Algorithms based on household data can be used to develop “human subsystems” in each economy whether developed, developing or underdeveloped as we classify them today. Primarily, we should know the current status of availability of food, water, energy, housing, health, education and employment in these “human subsystems”. Next, it would be pertinent to decipher information relating to production, consumption, the accumulation and ownership of assets, and the influence of prices (Fig. 3). These “human subsystems” will be alive to social mobility like ties between family, friends and neighbours, whereas at the same time serving as a pulsating source to decipher shocks to their health, learning, skills, disability, income and living arrangements. We will be able to analyse positive and negative influences on the fulfilment of our children’s mental, educational, social and physical requirements. Artificial intelligence can help us in studying the patterns of relative roles of values, expectations and preferences versus social structure to determine individual, ethnic and societal behaviour and decipher potential of developing the individual capabilities.

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FOOD

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Fig. 3 Algorithms based on household and other relevant data can be used to develop “human subsystems” in each level of economy

Eco-units Once the “human subsystems” have been identified, we can incorporate the impact of human activity on ecosystem assets as assessed by the pre-determined parameters corresponding to correlated “eco-units”. A basic unit comprising of ecosystem assets through which every aspect of our environment including biodiversity is accounted for with some assigned incipient values may be called an “eco-unit” (Fig. 4). The convention on biological diversity defines an ecosystem as “a dynamic complex of plant, animal and micro-organism communities and their non-living environment interacting as a functional unit” (https://www.cbd.int/convention/articles/ default.shtml?a=cbd-02). Biodiversity is defined as “the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part: this includes diversity within species, between species and of ecosystems” (https://www.cbd.int/con vention/articles/default.shtml?a=cbd-02). The scientific community has conceptualised biodiversity as a hierarchy of genes, species and ecosystems. The assessment of ecosystem assets may be carried out with the help of an ever-evolving accounting structure like The System of Environmental-Economic Accounts (SEEA). Statistical Commission of the United Nations at its 43rd session in 2012 adopted SEEA as an international statistical standard for official statistics (https://unstats.un.org/unsd/statcom/43rd-session/…/

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PLANT

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Fig. 4 Algorithms based on ecological systems can be used to develop “eco-units” in each level of economy

statcom-2012-43rd-report-E.pdf). Thus, a holistic and simultaneous analysis of the financial and non-financial accounts shall be done with the dual objectives (i) to monitor the interlinkages between them and (ii) to assess the complementary data on environmental and socio-economic developments.

Planet-Centric Economic Growth Model-“Tech-Ökonomie” Adoption of the “Tech-Ökonomie” will ensure policy decisions based on the concepts of resilience, thresholds and irreversibility while assessing the intra and intergenerational equity, patterns of income distributions, potentially irreversible environmental changes, and thereby eliminating the uncertainty of long-term outcomes. The “TechÖkonomie” considers the interdependence and co-evolution of the human subsystems and natural ecosystems over time and space with an objective to restructure hitherto “human-centric development models” to the futuristic “planet-centric economic growth models” (Fig. 5). A knowledge-based approach using reliable datasets will revolutionise the economic activity, living standards of people and biodiversity of the planet at large. “Tech-Ökonomie” proposes a new form of circular economy where human subsystems symbiotically merge into a local ecosystem and ensure circular interplay of economic activities in a globally sustainable manner.

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HUMAN SUB SYSTEMS

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INTERNET OF THINGS

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Fig. 5 “Tech-Ökonomie” considers the interdependence and co-evolution of the human subsystems and natural ecosystems using AI, machine learning, IoT and Big Data

Circular Economy Status in EU Current Status of CE In the circular economy action plan three issued for EU countries, a circular economy is explained as an economy “where the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimised” (https://ec.europa.eu/environment/circular-economy/index_en. htm). Council of the EU, in its conclusions on the circular economy action plan four, stressed “the need for a monitoring framework to strengthen and assess the progress towards a circular economy, while minimising the administrative burden”. Also, the European Parliament has called upon the commission to develop indicators of resource efficiency to track progress towards the circular economy (https://ec.eur opa.eu/environment/circular-economy/pdf/monitoring-framework.pdf). The circular economy monitoring framework draws upon and complements the existing Resource Efficiency Scoreboard 6 and Raw Materials Scoreboard 7, which were developed in recent years by the Commission. The framework is presented on a website (http://ec.europa.eu/eurostat/web/circular-economy) where all the indicators are available and will be kept up to date. One way of looking at the circular economy is to see how materials enter, flow within and (eventually) leave the economy. A

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Fig. 6 Overview of material flows in the EU in 2014. Source EU-28, 2014

material flows diagram can provide a visual overview, which shows all raw materials—aggregated as well as grouped by categories of materials—throughout the economy, from their extraction until they become waste (Mayer et al. 2018) (Fig. 6).

Transformation of EU Economies into the “Tech-Ökonomie” Several EU funding programmes are available to support the transition to a circular economy, such as the European Fund for Strategic Investments, the European Structural and Investment Funds, Horizon 2020 and the LIFE programme. Also, in January 2017, a Circular Economy Finance Support Platform was launched (Mayer et al. 2018). Existing EU funding and monitoring platform for Circular economy can be utilised to transform EU economies into the “Tech-Ökonomie” while incorporating the parameters essential for a futuristic “planet-centric economic growth model”.

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Signatures of “Tech-Ökonomie” in EU Following illustrations explain how the analysis of production, distribution and consumption of goods and services can permeate into economic policy changes which are based on the pulse of the “eco-unit” and “household”.

Household and Consumption Data Eurostat already has a dataset protocol for collection of household level data. Hence, it is comfortably placed to extend the domain of data collection unto household level and can undertake the task of embarking upon the identification of basic units of “human subsystem”. For exemplification results of household expenditure by consumption pattern is reproduced in Fig. 7 (http://ec.europa.eu/eurostat/statisticsexplained/index…/Household_consumption_by_purpos). Eurostat collects data on household final consumption expenditure according to the international classification of individual consumption by purpose (COICOP) in the framework of ESA2010. The transmission requirements for each dataset are defined in ESA 2010 transmission programme (http://ec.europa.eu/eurostat/statis tics-explained/index…/Household_consumption_by_purpos).

Fig. 7 Household expenditure by consumption purpose. Source COICOP, EU-28, 2016

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Fig. 8 Sectoral structure of output for the year 2015 in the EU and the uro area (in % of output). Source Eurostat (naio_10_cp)

Eurostat Capabilities Eurostat input-output tables are mainly used as a well-established tool for analytical purposes (economic analysis, social accounting matrices and environmental accounts) (www.ec.europa.eu/eurostat/statistics-explained/index.php?tit le…use…input-output_tables). Eurostat is capable of providing a well-established statistical organisational support system with enhancement of capability to analyse datasets using AI, machine learning and spatial sensing. The sectoral structure of output for the year 2015 in the EU and EA countries illustrates this capability of Eurostat as given in Fig. 8 reproduced below.

Data Availability for Delineation of Eco-units EU has a system of identification of relevant data for delineation of “eco-units” across the European countries in the form of The Biodiversity Information System for Europe (BISE) which is a single entry point for data and information on biodiversity supporting the implementation of the EU strategy and the Aichi targets in Europe (https://biodiversity.europa.eu). BISE brings together facts and figures on biodiversity and ecosystem services; it links to related policies, environmental data centres, assessments and research

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findings from various sources. BISE is a collaborative IT tool, building on operating systems at European level. BISE provides information at the European level in relation to the EU 2020 biodiversity targets as well as under five entry points (https://biodiversity.europa.eu): • Policy: policy, legislation and supporting activities related to the common implementation framework of the EU strategy, pan-European and global policies • Topics: state of species, habitats, ecosystems, genetic diversity, threats to biodiversity, impacts of biodiversity loss and evaluation of policy responses • Data: data sources, statistics and maps related to land, water, soil, air, marine, agriculture, forestry, fisheries, tourism, energy, land use and transport • Research: important EU-wide research projects related to biodiversity and ecosystem services, improving the science-policy interface • Countries: links to information available from European countries and to the biodiversity fact sheets for EU Member States networks supporting information sharing across national borders. Many other relevant EU legislation includes the Water Framework Directive, the Marine Strategy Framework Directive, the Common Agricultural Policy and the Common Fisheries Policy. Since 2013 the European Commission adopted the Green Infrastructure Strategy (https://www.biodiversa.org/). BiodivERsA (https://www.bio diversa.org/) is a network of national and regional funding organisations promoting pan-European research on biodiversity and ecosystem services, and offering innovative opportunities for the conservation and sustainable management of biodiversity. BiodivERsA is funded under the Horizon 2020 ERA-NET COFUND scheme. Similarly European Environment Agency (EEA) is also actively collecting and collating data as illustrated, for example, purpose in Table 1 (https://www.eea.europa. eu/themes/air/…emission-ceilings/nec-directive-reporting-status). “Black check mark” indicates that the emission ceiling or reduction commitment has been, or is anticipated to be, attained. The NEC directive does not include a 2010 ceiling for PM2.5. “Red cross” indicates that the ceiling or reduction commitment has not been, or is not anticipated to be, attained.

Need for Adoption of “Tech-Ökonomie” in EU EU has taken several initiatives to incorporate latest technological innovations and scientific advancements into the determination of economic policies. But, as can be discerned from the above detailing of the circular economy the EU framework is still thoroughly engrossed within the domains of human activities. We know the commitments of EU in terms of Sustainable Development Goals’ 2030 and their interplay with the environmental and other related policies of EU. EUROSTAT has made a fantastic effort in developing SEEA which provides an excellent platform to embark upon the tenets of hereinabove postulated “Tech-Ökonomie” transformation of European economies.

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Table 1 EU Member State progress in meeting 2010 NEC directive emission ceilings and 2020/2030 reduction commitments

Source EEA

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• Eco-Unit • Human subsystem

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• Eco-Unit • Human subsystem

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• Eco-Unit • Human subsystem

Fig. 9 Flow process of integration of “eco-units” and “human subsystems”-based “TechÖkonomie” to evolve responsive policies with far greater worldwide impacts

It would be of greater utility if indicators of “impacts on eco-units” are also included in the circular economy indicators list corresponding to their respective “human subsystems”. Such datasets can be utilised to create an international, national, regional and local resource for research, planning, policy development and performance improvement. Existing macro and microeconomic parameters can be adjusted in this way to adopt the “Tech-Ökonomie”. A countrywide, region-wide and locally alive system of monitoring the overall impact on the biosphere of our economic and other activities will lead to evolving responsive policies with far greater impacts (Fig. 9). Responsible investment strategies can be formulated to prioritise the fragile units and mitigate their plight to minimise the further deteriorations to our planetary wealth. For instance, we can identify wetlands where ecological loss is severe and an immediate remediation would be essential to stop further loss of endangered species of flora, fauna both at micro- and macro-level. In such an eventuality focus of investment shall be to provide necessary funding to that region irrespective of other undermining factors like gains on investment. On the other hand, when we have to deal with any crisis like migrations into certain parts of EU, then resources of that particular Member State may not be sufficient enough to service the needs of crisis-affected migrants properly. A whole cycle of devastation to the local ecosystem and human subsystems will then undo whatever good will have been done till then. So, we need to be conscious of demands arising out of exigencies or otherwise from both “eco-units” and “human subsystems”. Technologies like artificial intelligence, machine learning and spatial sensing can be a great tool in developing a warning system to likely threats as deciphered from the analysis of monitoring of indicators of “eco-units” and “human subsystems”. We would be monitoring even the micro-level changes in real time so it will become easier to plan in advance the budgeting requirements and funding priorities of our planetary needs. It will also help us in the identification of units and subunits even up to the household level where the incidence of crime, corruption, erosion of value system and loss to the ecosystem is at a high level. Any crime adversely affecting our planetary system should not be termed as an erosion of privacy or interference in affairs of the communities since everyone shall be governed by the common will of the people on Earth.EU has already set the momentum, therefore, probably is better placed to make and adopt “eco-units” and “human subsystems”-based “TechÖkonomie” transformation and is poised to set an example for the entire world to follow.

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Conclusion Advancements and innovations in the fields of science and technology have always thrust the human civilisation forward regarding material benefits. Our children should not live in a world which ignores and decimates the co-existing planetary lives and non-living things. We need to integrate the fields of science, technology, economics, social sciences, commerce, business and public administration with a singular objective of ensuring symbiotic planetary welfare. Transition to an inclusive “planetcentric economic growth model” from the exclusive “human-centric development models” is an immediate concern which has to be addressed by integrating hugely available datasets held by various agencies. After that, the “eco-units” and “human subsystems”-based “Tech-Ökonomie” transformation can revolutionise the way our policy decisions are made. Governance will become more practical and responsive to the needs of the people. It is a new circular economy concept, wherein resilient eco-systems will become alive to a planet-based approach where everything matters for everyone and inanimate things will also find a place in decision making. “TechÖkonomie” is a fabric which binds all living and non-living things of our planet to ensure a brighter and better future for all the generations to come.

References BiodivERsA: home, https://www.biodiversa.org/. BISE-Biodiversity Information System for Europe—Biodiversity, https://biodiversity.europa.eu. Circular Economy Strategy-Environment-European Commission https://ec.europa.eu/environment/ circular-economy/index_en.htm, March 7, 2018. Consolidated supply, use and input-output tables—Statistics Explained, www.ec.europa.eu/eur ostat/statistics-explained/index.php?title…use…input-output_tables, April 6, 2018. Convention on Biological Diversity Article 2. Use of Terms: https://www.cbd.int/convention/art icles/default.shtml?a=cbd-02. Data-driven innovation for growth and well-being: http://www.oecd.org/sti/ieconomy/data-driveninnovation.htm. Household consumption by purpose—Statistics Explained http://ec.europa.eu/eurostat/statisticsexplained/index…/Household_consumption_by_purpos, January 22, 2018. Mayer, A., Haas, W., Wiedenhofer, D., Krausmann, F., Nuss, P., & Blengini, G. A. (2018). Monitoring the circular economy in the EU28 Strasbourg, 16.1.2018, COM (2018) 29 final, pp 2—A mass-balanced assessment of economy wide material flows, waste and emissions from official statistics. Journal of Industrial Ecology. Monitoring framework-European Commission-Europa EU: https://ec.europa.eu/environment/cir cular-economy/pdf/monitoring-framework.pdf, January 16, 2018. NEC Directive reporting status 2017—The need to reduce air pollution, https://www.eea.europa. eu/themes/air/…emission-ceilings/nec-directive-reporting-status, July 3, 2017. Rupert Neate, Wealth correspondent, The Guardian-International edition: Richest 1% own half the world’s wealth, study finds: https://www.theguardian.com/inequality/2017/nov/14/worldsrichest-wealth-credit-suisse.Tue, November 14, 2017.

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Statistical Commission—UNSD: https://unstats.un.org/unsd/statcom/43rd-session/…/statcom2012-43rd-report-E.pdf. Website: http://ec.europa.eu/eurostat/web/circular-economy. Wikipedia: https://en.wikipedia.org/wiki/Economics.

Repair as Top Priority Within the Circular Economy

20 Years of Applied Circular Economy: Repair and Service Centre R.U.S.Z - A Practitioner’s View Sepp Eisenriegler

The “Planned” Obsolescence of Capitalism Life-cycle analyses of electrical and electronic equipment show that more than half of the total environmental impact is caused by their production. In its washing machine and vacuum cleaner tests 2015–2016 and in its daily repair practice over the last 20 years, Repair and Service Centre R.U.S.Z has been able to demonstrate that the trend towards throw-away products, designed to fail after a few years and designed to hamper repair at economically feasible prizes, continues unabated. An example: to get clean laundry for 20 years, you can buy a high-end washing machine for around e1.000 or seven throw-away washing machines for e300 each. The supposedly cheap washing machines are thus not only twice as expensive as the durable one, but, even more important, produce 4 times the ecological footprint. 52.7% of the environmental impact in the life of a washing machine is caused by its production and distribution (Steiner et al. 2005). The number of large household appliances that had to be replaced in the first five years due to a defect has tripled in the last ten years (UBA Deutschland 2016). Our growth-driven economy in saturated markets is in its final stages. The EU Commission has long since imposed a systemic change from a resource-intensive, linear system to a low-waste, circular economic system. Not even the lobbyists from the manufacturing industry demonstrate serious resistance. Of course the old system will be pursued further as long as it works and still produces strange blossoms of growth by means of ever new scrapping premiums. Currently, those digital immigrants who buy a wireless LAN-washing machine receive a “Prepared for the FutureBonus”. As soon as millions of washing machines in the EU have been exchanged for reportedly more energy-efficient ones without need, they are again being put into shredders. When switching to A+++ a household could save at least up to e1.80 S. Eisenriegler (B) Reparatur- und Service Zentrum R.U.S.Z, Lützowgasse 12-14, 1140 Vienna, Austria e-mail: [email protected] © Springer Nature Switzerland AG 2020 S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-3-030-50239-3_16

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per year (Smith et al. 2016). But what is the point of a WLAN-capable washing machine? A remote control! Purchasing a “Smart Home” washing machine means downloading an app to your smartphone. The smart consumer can then select the programme and switch on the washing machine from the office or holiday resort. If he/she did not put dirty laundry in before, it is his/her own fault. Also the removal of the washed laundry has to be done manually, no app helps. Especially smart is the direct access by the manufacturer. With the tempting offer of remote maintenance, the power of decision regarding the service life is in the hands of the manufacturer. One goal could be to eliminate competition from independent repair shops. But that would be foolish: reputable repairers and their know-how will be needed by 2025 at the latest—after the entry into force of the amended Ecodesign Directive, which is based on new material-efficient EU standards and independent testing methods for detecting premature obsolescence in new equipment before it is approved.

The Term Obsolescence In addition to well-known forms of obsolescence, two new ones have emerged in recent months: Design-related obsolescence (Langbein & Partner 2017) and systemic obsolescence (SUSTAINUM-Institut für zukunftsfähiges Wirtschaften 2018). All in all, the term obsolescence is being filled with more and more content. There is still no judicial proof for the premeditation of “planned obsolescence”. Therefore, diplomatic experts and biased industry representatives have successfully proposed the term “premature obsolescence”, meaning too early wear out of products. If one does not want to arrest anyone for planned obsolescence or impose high fines on them, as provided for by French law and discuss product wear and tear with various EU interest groups, it has proved expedient to accept this form of minimisation. Nevertheless, I attach great importance to the fact that in the everyday repair routine of R.U.S.Z there are always clear indications of planned obsolescence, for example, an accumulation of identical errors in consumer electronics, household appliances and IT. This often has to do with too low dimensioned electrolytic capacitors, sometimes with door handles (weak points in certain washing machine brands that are not improved over generations of devices) and over and over again with counters that, for example, in printers ensure that half-full toner cartridges or ink cartridges are (have to be) replaced. But as consumers, we also have to look at ourselves. Especially when it comes to so-called status symbols: “We buy products we don’t need with money we don’t have to impress people we don’t like”. A US comedian said in the 1930s already. I say: Whoever dreams of an SUV or another status symbol should better consult a good psychoanalyst and work on his underdeveloped self-confidence. It’s cheaper, doesn’t destroy raw materials and doesn’t generate waste!

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7 Theses Such an Economy Kills The passages in Pope Francis’ letter “Evangelii Gaudium” (Pope Francis 2013) commenting on the reality of the capitalist economic system (especially no. 53–60 and no. 185–220), have long been criticised by the mainstream media. He has been accused of presenting at best a one sided, and at worse an entirely inaccurate image of the neoliberal market economy, whereby he disregards the successes, despises the rich and dreams of fairer alternative models. What Pope Francis is criticising, is the exclusion from participation in the economy and lack of redistributive financial justice. Added to this, is his critic of the imperial way of life in the Global North—the profit-oriented, international consortia model that repeatedly exploit the non-regenerative raw materials of the countries in the Global South. These are processed by emerging markets into products bought cheaply and quickly discarded by the North. The massacre of platinum miners in the Marikana (South Africa) and the death of 1000 seamstresses in the collapsed Rana Plaza textile factory (Bangladesh) are two well-known examples, among countless others, that would support Pope Francis’ declaration.

This Economy Is Addictive The Austrian Chamber of Labour-study into Consumer trends in Austria (Tröger 2017) shows that every fourth Austrian is addicted towards consumerism! 14% buy to compensate for something else: “Buying is a substitute, for example, to compensate for loneliness or insecurity. They look for a kick, but the satisfaction is only short and is quickly followed by an emotional crash” says Nina Tröger. 11% are pathologically addicted: “Shopping addiction is taboo because it is experienced as particularly shameful. Shopping is considered banal and controllable, so those affected are seen as weak and out of control. In addition, there is the negative connotation of financial loss, in the same way as with gambling” said Michael Musalek, Medical Director of the Anton Proksch Institute in Vienna at the press conference presenting the study in 2017.

This Economy Is Unfair The unjust global distribution of wealth and its trajectory towards increasing it further, can be assumed to be commonly known. It is widely acknowledged that the division of labour in our globalised world has become grotesque: raw materials are exploited

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and increasingly processed in the Global South, where also huge quantities of illegally exported waste from the Global North are dumped. The work benches of industry must live with increasing emissions caused by the over-consumption of increasingly short-lived products. This finding coincides with the development of the global environmental impact of Swiss consumption (Frischknecht et.al. 2014). This groundbreaking study delivers proof for the environmental impact of consumption in Switzerland remaining largely stable between 1996 and 2011. The environmental impact in Switzerland fell significantly. However, the environmental impact abroad increased dramatically from 56% in 1996 to 73% in 2011. Our imperial way of life is based on neoliberal economic colonialism.

This Economy Destroys Livelihoods Conserving resources is the pinnacle of environmental protection. Every extracted, non-regenerative raw material contributes to greenhouse gases at every point along the production and transportation line. The importance of purchasing decisions for our environment is not yet in the consciousness of consumers, e.g. it is not explained in the textile sector why monthly or “fast” fashion is normalised, or why in the electrical sector products previously bought for decades are today exchanged every few years. We are living now off the back of future generations, and along the way destroying the ecosystems and biodiversity on which the whole of humanity depends. After all, it is about the livelihood and survival of mankind. There is only one consolation, we have not yet reached the capability to entirely destroy the planet as such.

This Economy Needs Systemic Change—Example: Electrical Appliances The EU-wide public relations campaign “If we want to save the planet and our money, we’ll have to replace all household appliances for those with the highest energy efficiency rating!” was the most successful ever. The environmental impacts of production can only be reduced by using electrical devices for as long as possible. Energy savings for the allegedly most energyefficient washing machines are under e1.80 per year according to the largest EU consumer organisation BEUC (https://www.beuc.eu/publications/beuc-x-2016-062_ how_much_can_consumers_save_thanks_to_ecodesign.pdf). Eight years after the most successful public relations campaign by manufacturers and the electronics trade, the two flywheels of our growth-driven economic system are once again

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driving willing private households to equip themselves with new household appliances in long practised, profitable solidarity. The scrapping premium for energyefficient appliances is followed by the “Prepared for the Future-Bonus”: WLANcapable washing machines, smart home solutions and the Internet of Things are the new magic words. However, there is no benefit in denouncing individual actors in the globalised, capitalist market economy. Not even the manufacturers of electrical appliances can really be blamed for behaving in accordance with the system, when it is the growth-driven system itself that is the real bogeyman.

Long Live the Homo Economicus To pursue egocentric goals exclusively is not desirable. Yet, consumers in the “developed” world in the Global North behave so totally irrational that their consumerism has much bigger global environmental impact, as if they would strictly follow rational decisions. These, from the advertising industry “emotionally uploaded consumers” do not even recognise how they are being ripped off. In fact, they regard the price of a washing machine of e300 as cheap, without referencing the investment costs to its economic lifetime. Talking about consumption without addressing the disastrous effects of the advertising industry is a lost cause. Edward Bernays, the father of PR and nephew of Sigmund Freud, showed in the 1920s what advertising is capable of. Citing works of Freud, he describes the masses (the mob) as irrational and affected by herd instinct. He outlined how skilled practitioners could use crowd psychology and psychoanalysis to control them in desired ways. Bernays’s strategy was aimed at changing the mentality of potential buyers, who should buy the goods for their symbolic character; Bernays’ consumers buy things for self-representation and self-promotion: “Express yourself” should become the decisive maxim of the purchase decision, advertising should appeal to the irrational desires of the customers. Building on this, he promoted Lucky Strike cigarettes as “torches of freedom” to present women’s cigarette consumption to the public as a measure of equality and to create social acceptance for it with the help of the big newspapers. To the delight of the client American Tobacco: During an Easter Parade in New York—in the shadow of the Statue of Liberty—he organised his wife’s suffragette circle to light cigarettes at his command which became famous as the “torches of freedom”. Pictures of smoking women in the public, a no-go at those days, went around the world. Primarily, he doubled the sales of American Tobacco’s brand Lucky Strike. Bernays: “Man is an irrational being motivated by unconscious impulses and necessarily in need of cultural restraint and control”. And: “Whoever manipulates the unseen mechanisms of society forms an invisible government, which is the true ruler of our country. We are governed, our minds shaped, our tastes formed, our ideas largely suggested by men we have never heard of”. These quotations from Edward Bernays are almost 100 years old, but still made use of today.

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Being asked by journalists from the Austrian quality newspaper DER STANDARD “But isn’t it rather the case that many consumers are tired of advertising and marketing, that they don’t even notice it anymore?” the neuroeconomist, market and consumer researcher Peter Kenning answered: “If advertising did not work in principle, companies would not spend around 500 billion US dollars a year on it. For example, if I show you an advertisement with George Clooney drinking a particular coffee, you might say that you don’t like advertising as a whole. But the next time you’re standing by the shelf, your brain will remember the ad and you’ll take the advertised coffee because it felt so good when you saw the brand advertising. When they ask you afterwards why you bought this coffee, you say because it tastes good. Of course, advertising works. Permanently!”

The Circular Economy as an Intermediate Step In 2015, the EU Commission published the circular economy package to boost competitiveness, create jobs and achieve sustainable growth. Linked to its commitment to the United Nations Sustainable Development Goals (SDGs), EU regulatory and legislative frameworks are thus an important step in the right direction. The increased supply-security of raw materials to the EU industry has been a key driver for the publication of the circular economy package. The Commissions’ demands for longevity of products, repair-friendly design and preparing for re-use measures go clearly in the right direction of resource efficiency. However, it is very obvious that the shift from a linear to a circular economy will not prevent further growth. Although the circular economy will decouple our imperial way of life from the consumption of resources and thus reduce the imperial element. Whether this will be enough to secure our livelihood on this planet is not certain, but the post-growth economy is not yet politically adaptable.

… What Is to Be Done? EU regulatory policy has had some impact. Some manufacturers are pleased to recognise the need to change their linear business models. Pleased, because many leading industry representatives can no longer bear this schizophrenic dichotomy between keeping the immediate environment clean but destroying resources further afield globally. Bosch-Siemens is already carrying out a large-scale washing machine rental model in the Netherlands. So now it’s up to us! We are all consumers. Some of us are buying addicts and others, simply consumer illiterates. But there is also a growing purchasing population who are politically active. They understand that “consumer is king” is not an empty

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slogan, and they use local initiatives which helped to invent the circular economy long before the European Commission got involved. One of these initiatives is Repair and Service Centre R.U.S.Z. R.U.S.Z and its customers take political responsibility. The slogan “A social enterprise initiating a change in EU policy” is not exaggerated. For 20 years, we have been selflessly fighting for resource efficiency. Our customers help us with their consumer purchasing decisions: be it a repair job, a refurbished model or a rented device (product service system), these are the status symbols of a growing minority!

R.U.S.Z Is Different Repair and Service Centre R.U.S.Z is a social business and a centre for consumer protection and sustainability in addition to its day-to-day business as a provider of reputable repair services. We have reinvented the serious repair service and are now the most prominent, independent repair company in the EU. In addition, we operate Austria’s largest re-use centre for large household appliances and offer a weekly repair café. Already in its first ten years as a Work Integration Social Enterprise, the mission of Repair and Service Centre R.U.S.Z was to combine social needs with environmental necessities. Since its privatisation at the beginning of 2008, which was not entirely voluntary, R.U.S.Z has been an independent certified mechatronics company that carries out around 9000 repairs to electrical and electronic equipment each year, thus reducing the ecological footprint that is mainly generated during the production of new equipment. In addition, suitable old electrical appliances donated by private households in the greater Vienna area are tested for a further life cycle, repaired if necessary (preparation for re-use) and offered for sale. For more than two years, we have been offering the product service system “Clean Laundry” based on the sharing economy principle. Since one year, we have also been offering new equipment that meets our criteria of longevity and ease of repair. R.U.S.Z. has founded the ReparaturNetzWerk Wien, an umbrella for all reputable repair shops in the greater Vienna area and the spin-off Dismantling and Recycling Centre D.R.Z, which manually dismantles a large part of Vienna’s old electrical equipment in a recyclable manner. In addition, R.U.S.Z was co-founder of the European umbrella organisation for social economy enterprises RREUSE, a lobbying network at EU level and of the federal umbrella organisation RepaNet Austria, an association of work integration social re-use enterprises. Since the formation of the former right-wing Austrian government in 2017, R.U.S.Z has pursued a personnel policy focus on the integration of refugees. In the meantime, we have employed three refugees from Sudan, Syria and Afghanistan. One of them has not yet received a positive asylum notification. That’s why he is doing an apprenticeship as an electronics technician at R.U.S.Z, which gives him the security to stay in Austria until the end of his apprenticeship in any case.

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Services for Consumers and the Environment R.U.S.Z and its customers take their political responsibility seriously. “A social enterprise initiates a change in EU policy” is not an exaggeration. For more than 20 years, we have been fighting for resource efficiency unselfishly. Our customers support us with their consumer decisions: It may also be a repair, a refurbished device or a product service without the change of ownership. “Status symbols” of a growing minority! The contribution to increasing the energy efficiency of electrical appliances is overestimated: the exchange of old washing machines for an A+++ appliance brings a maximum of 1.80 euros per year (Smith et al. 2016). The R.U.S.Z rental offer without transfer of ownership offers further potential for optimisation: For two years, we have been offering the product service system “Clean Laundry” for an unlimited period, with annual service, any repairs, or equipment replacement and adjustment of the rental price on the basis of the actual washing cycles carried out.

Innovations in the Fields of Waste Prevention and Resource Conservation Waste prevention, which is at the top of the waste hierarchy, is not yet sufficiently important in this respect, as it is a task for society as a whole, which, according to the Waste Avoidance Programme 2017, can only be managed to a limited extent by the players in waste management (Bundesministerium für Nachhaltigkeit und Tourismus Wien 2017). R.U.S.Z is one of those actors that focus on this task for society as a whole. Just as it makes a significant contribution to supporting measures to increase resource efficiency and improve the recycling economy in Austria (Bundesministerium für Nachhaltigkeit und Tourismus Wien. (o. J.) RESET2020). The Austrian Resource Efficiency Action Plan (REAP) (Bundesministerium für Nachhaltigkeit und Tourismus Wien. (o. J.). Ressourceneffizienz Aktionsplan (REAP)) addresses the transition from selling products to offering sustainable product service systems as an innovative example on the way to sustainable development. R.U.S.Z’s product service Clean Laundry meets the above requirements and differs greatly from conventional leasing models including the transfer of ownership after, e.g. 5 years. R.U.S.Z has contributed significantly to Austria being rated as a “front-runner” for re-use by the European Environment Agency through the initiation of the re-use and repair network RepaNet, the re-use platform in the Ministry of Agriculture, Forestry, Environment and Water Management (BMLFUW), the guideline for the re-use of old electrical equipment in Austria and the creation of ONR 192102:2014 (European Environment Agency EEA 2018). The development of this, still globally unique, Austrian standard was carried out jointly by the Federal Ministry in charge, the Austrian Standards Institute and

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other partners and, predominantly, by R.U.S.Z technicians. Since the 2014 update by R.U.S.Z, it has been called ONR 192102:2014 “Label of excellence for durable, repair-friendly designed electrical and electronic appliances”. This standard was made available and lobbyied for by R.U.S.Z to the standardisation process M/543 “Energy related products—Material efficiency aspects for Ecodesign” commissioned by the EU Commission and also serves as one of several bases in the H 2020 project CE-SC5-02-2018 “Independent testing programme on premature obsolescence” (PROMPT1 ). In 2015, 24 new washing machines were tested in 2016, 40 vacuum cleaners were tested according to this standard on behalf of Test Achats (https://www.test-aankoo p.be). The results were sobering: each new washing machine was worse than its own predecessor, for all vacuum cleaners under 80 Euro there are no spare parts. The proportion of throw-away products in both appliance groups has tripled in the last ten years. The tests were carried out against the ONR 192102:2014 standard. All products failed, not only one got the “Label of excellence for durable, repair-friendly designed electrical and electronic appliances”. In order to counteract the biggest PR campaign by manufacturers and electrical retailers, the replacement of good-quality washing machines with “energy-efficient” A+++ appliances, which was partly supported by scrapping premiums, R.U.S.Z already developed the so-called Tuning of Washing Machines for washing machines in use in its R&D department in 2010/2011: This technical in-house development, supported by the Austrian Climate and Energy Fund, resulted in a 30% reduction in water consumption and, consequently, a 20% reduction in energy consumption. Even then, it was proven that washing machines of the highest energy efficiency class only consume less electricity in a single programme (60° Eco). This is only possible because in this programme the appliances heat up to 30 instead of 60 °C. This so-called Ecolabel programme needs additional 1.5 hours for the washing cycle!

1 The

main objective of PROMPT is to develop an independent testing programme to support the assessment of the longevity of consumer products when they are put on the market. The testing programme will cover major aspects related to longevity. It has the goal to enable testing bodies, consumer organisations, market surveillance authorities and other interested stakeholders to rely on tangible definitions and to methodically assess premature obsolescence. It will contribute to ongoing and future standardisation efforts and provide designers and policymakers with recommendations on improving durability and reparability of products, empower consumers to make informed choices, and create awareness on market conditions. https://prompt-project.eu/.

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12.000 repair data of the R.U.S.Z were part of the basis for relevant scientific work of the JRC (Tecchio et al. 2016; Tecchio et al. 2019) and of KU Leuven (Bracquené et al. 2018). Repair data from the R.U.S.Z repair database will also be incorporated into the recently launched H 2020 project “Independent testing programme on premature obsolescence” (PROMPT). Since its foundation in 1998, the business model of Repair and Service Centre R.U.S.Z has been fully in line with the Circular Economy package published by the EU Commission in late 2015. It provides added value for the community at both the social and environmental levels. This also supports the UN goals for sustainable development (in particular SDGs 8, 12 and 13).

Sustainability Impact The extension of the operating lives of electrical and electronic devices through repair, preparation for re-use and the offer of our product service system “Clean Laundry” contribute directly to the conservation of non-regenerative raw materials and to climate protection (The International Resource Panel 2019).

SDG8 (Decent Work for All and Sustainable Economic Growth) R.U.S.Z is perceived as a social innovation. Various aspects of our business model have led the Center for Social Innovation, ZSI (CASI 2016) and the Austrian Institute of Technology, AIT (Brunauer & Schartinger 2016) to this scientific conclusion: “R.U.S.Z aims to connect social and ecological requirements by bringing back to life technical goods and re-integrating people at risk into the labour market. It creates jobs for unemployed people and qualifies them as professional technicians. Moreover, R.U.S.Z contributes to resource conservation and prevention of (hazardous) waste”. R.U.S.Z creates added value nationally and also jobs for formerly long-term unemployed from the very beginning. In the first ten years of its existence, R.U.S.Z has improved the psycho-hygienic situation of over 400 long-term unemployed and placed 300 in permanent employment. Since 2008, R.U.S.Z has regularly offered work training courses for long-term unemployed mechatronics technicians and mechatronics apprentices free of charge. These results can be multiplied by the application of the business concept by franchise partners in Austria and abroad. For Repair and Service Centre R.U.S.Z, the use of its brand and the know-how in a sustainable business relationship results in additional revenues by fair payment of third parties. The first (own) branch in Graz serves as a reflection area for the application of our social franchising manual and the optimisation of our social franchising concept.

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SDG 12 (Ensuring Sustainable Consumption and Production Patterns) R.U.S.Z has reinvented serious repair services in Vienna and is today a well-known independent repair service provider in the EU. In addition, R.U.S.Z operates a large re-use centre for large household appliances in Austria (products from waste), organises a weekly repair café and offers customers in the greater Vienna area the opportunity to rent washing machines and tumble dryers on a long-term basis as part of the “Clean Laundry” product service system instead of buying increasingly more often. In addition to its day-to-day business, R.U.S.Z and its networks have helped to initiate a change in EU economic policy: the Waste Electrical and Electronic Equipment Directive and the Waste Framework Directive have been decisively influenced against the interests of industry for sustainable production and, together with EU parliamentarians, Commission officials and important NGO lobby groups, the systemic change from the current linear to a circular economic system has been secured. The current EU standardisation work on behalf of the Commission (M/543) “Energy related products – Material efficiency aspects for Ecodesign” creates the basic prerequisites for an amendment of the Ecodesign Directive in the direction of increasing the material efficiency of (initially energy-related) products. Based on the Austrian standard ONR 192102:2014, I held a leading position in this “Joint Technical Committee 10” (CEN-CLC/JTC 10) consisting of around 200 experts for one and a half years as leader of the Austrian delegation, CEO of R.U.S.Z, Chairman of RepaNet and former President of RREUSE. With the development of EU standards, in particular on durability, repair, re-use and upgrade, the Ecodesign Directive lives up to its name and ensures that only resource-efficient electrical appliances will be approved for sale in the EU economic area from 2025 onwards. It can therefore be assumed that the EU’s regulatory policy has done, and hopefully is doing its “homework”. Now the focus must be on sustainable consumption: Therefore, a further focus of the strategic work of R.U.S.Z is awareness raising of consumers through media work. R.U.S.Z has gained the thematic leadership on “Planned/Early/Premature Obsolescence”. In recent years, 500 editorial contributions on the topic have been launched in high-circulation print media (Die Zeit, Profil, Trend, Der Spiegel, all major Austrian daily newspapers) and wide-ranging electronic media (ORF, ARD, WDR, SWR, BR).

SDG 13 (Urgent Action to Tackle Climate Change and Its Impacts) In the years to come, R.U.S.Z will continue to proactively participate in the systemic transformation from a linear “take-make-dispose-economy” to a circular economy

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(see above). The Ecodesign Directive will thus live up to its name and ensure in its implementation that only resource-efficient (durable, repair-friendly, re-useable) electrical appliances will be permitted for sale in the EU economic area from around 2025. The conservation of non-regenerative raw materials has a direct effect on climate protection: If fewer metals and minerals are extracted from our all too thin, solid earth crust and processed into products, fewer climate-damaging emissions will “heat up” the greenhouse effect. Comprehensive life-cycle analyses show that more than 50% of the total environmental impact in the life of electrical and electronic equipment is caused by production and distribution. The Global Resources Outlook from UNEnvironment (The International Resource Panel 2019) (https://www.resourcepanel. org/reports/global-resources-outlook) provides us with striking news: Some 50% of the global carbon emissions (and 90% of biodiversity loss) result from extraction and processing of our natural resources! The Clean Laundry product service, which has been offered by R.U.S.Z for more than two years in the form of rental washing machines without transfer of ownership, serves, among other things, as proof that it can also be offered on an industrial scale. If large international manufacturers follow this model and make their profits from rental income instead of selling ever more short-lived appliances, they have an intrinsic interest in producing durable, easily repairable washing machines (and other energyrelated products). Bosch-Siemens-Hausgeräte, BSH has already expressed interest. The cooperation between BSH and R.U.S.Z is still informal, but the statement of an important BSH representative “If we are to use better materials in the Circular Economy, we want them back” is optimistic. It can also be stated that the industry representatives in CEN-CLC/JTC 10 have recognised that the way into the circular economic system is irreversible: The BSH representative: “We are pleased with these regulatory guidelines because we have long since recognized that the trend towards premature obsolescence is the wrong way. – But alone we would never have started to focus on longevity and repair-friendly design”. We assume that, in cooperation with the EU institutions, we will continue to make a significant contribution to ensuring that, from around 2025, only durable, repair-friendly, re-useable new products can be sold in the EU. This will reverse the current trend towards throw-away products, preserve non-renewable resources and also significantly reduce climate-damaging emissions due to production.

Fazit However, repair service providers are still doubly disadvantaged. As with other service providers, employer tax and social insurance contributions are the same as net wages. In addition, suppliers of repair services for electrical appliances are in direct competition with the prices for new appliances, which speak neither the social nor the ecological truth (market failure due to negative external effects). A parliamentary petition to rescue the repair industry was therefore launched in June 2018.

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In contrast to new purchases in large electrical goods stores, reputable repair service providers create regional added value through regionally anchored jobs. Our social franchising model, which is currently being implemented, corresponds to this fact.

References Bracquené, E., et al. (2018). Repairability criteria for energy related products. Study in the BeNeLux context to evaluate the options to extend the product life time. http://www.benelux.int/files/7915/ 2896/0920/FINAL_Report_Benelux.pdf. Brunauer, A., & Schartinger, D. (2016). Report: SI drive—WP environment and climate change. R.U.S.Z Repair and service center. A case study of a social innovation. Vienna: Austrian Institute of Technology. Bundesministerium für Nachhaltigkeit und Tourismus, Wien. (2017). Abfallvermeidungsprogramm 2017. https://www.bmnt.gv.at/umwelt/abfall-ressourcen/abfallvermeidung/Abfallvermeidungsp rogramm-2017.html. Bundesministerium für Nachhaltigkeit und Tourismus, Wien. (o. J.). https://www.bmnt.gv.at/umw elt/nachhaltigkeit/ressourceneffizienz/aktionsplan_ressourceneffizienz_reset/reset2020_initia tive.html. Bundesministerium für Nachhaltigkeit und Tourismus, Wien. (o. J.). Ressourceneffizienz Aktionsplan (REAP). https://www.bmnt.gv.at/umwelt/nachhaltigkeit/ressourceneffizienz/ressourcennu tzung_daten_trends/aktionsplan.html. CASI. (2016). https://www.zsi.at/en/object/project/2763PROGRAM:FP7-SiS-2013-1.2.-1. European Environment Agency EEA. (2018). Waste prevention in Europe—policies, status and trends in reuse in 2017. EEA Report No 4/2018, pp. 24, 31–32. Frischknecht, R., Nathani, C., Büsser Knöpfel, S., Itten, R., Wyss, F., & Hellmüller, P. (2014). Entwicklung der weltweiten Umweltauswirkungen der Schweiz. Umweltbelastung von Konsum und Produktion von 1996 bis 2011. Bundesamt für Umwelt, Bern. Umwelt-Wissen Nr. 1413. Pope Francis. (2013). Apostolic Exhortation Evangelii Gaudium. See drop-tests of smartphones in Langbein und Partner: Geplanter Murks, 2017: https://www.you tube.com/watch?v=UfUehiIlrHI. Smith, M. et al. (2016). Benefits of Ecodesign for EU households, Ecofys 2016 by order of: ANEC/BEUC, Project number: UENNL16398. Steiner, R., et al. (2005). Timely replacement of white goods. CH-Uster: ESU-Services. SUSTAINUM-Institut für zukunftsfähiges Wirtschaften. (2018). Langlebigkeit & Obsoleszenz in der Produktentstehung (LOiPE). https://runder-tisch-reparatur.de/wp-content/uploads/2018/07/ 20180619_Langlebigkeit-und-Obsoleszenz-Pressemitteilung.pdf. Tecchio, P. et al. (2016). Analysis of durability, reusability and reparability—Application to washing machines and dishwashers. EUR 28042 EN. https://doi.org/10.2788/630157. Tecchio, P. et al. (2019). Understanding lifetimes and failure modes of defective washing machines and dishwashers. Journal of Cleaner Production, 215. Test-Aankoop. (o. J.). https://www.test-aankoop.be. Zugegriffen: 15. Dezember 2018. The International Resource Panel. (2019). http://www.resourcepanel.org/reports/global-resourcesoutlook. Tröger, N. (2017). Kaufsucht in Österreich. Materialien zur Konsumforschung No 4, 2017.

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UBA Deutschland. (2016). Einfluss der Nutzungsdauer von Produkten auf ihre Umweltwirkung. Deutschland 2016 und R.U.S.Z-Reparaturdatenbank. UBA Germany. (2016). Einfluss der Nutzungsdauer von Produkten auf ihre Umweltwirkung, Deutschland 2016 und R.U.S.Z-Reparaturdatenbank.

Latest Documentary on Premature Obsolescence Langbein & Partner. (2017). Geplanter Murks: https://www.youtube.com/watch?v=UfUehiIlrHI. Zugegriffen: 15. Dezember 2018.