Interview: ‘The Secret Weapon of Climate Action’
March 24, 2023
How can circular economy help create a sustainable future? In what fields and areas should the European legislation accelerate, and what economic incentives should be put in place to promote a circular economy? The circular economy is being touted as the “secret weapon” in the fight against climate change and biodiversity protection. The European Union, with its ambitious plans to transition to a circular economy, can lead the way in this direction.
To learn more about how best to develop a circular economy, Renewable Matters, an Italian magazine with English and Italian editions, interviewed Freek van Eijk, CEO of Holland Circular Hotspot & Co-Chair of ECESP Coordination Group in the context of the ECESP annual conference.
The interview was initially published at Renewable Matters on March 1, 2023.
Find a summary of the key points below!
"The challenge is not limited to one specific sector but rather encompasses everything we do"Freek van Eijk, Director of Holland Circular Hotspot
Freek explained that a circular economy is a system change which requires a shift in focus from the end of the value chain to the entire system. “Today, there is too much emphasis on the end of the value chain; we need to use fewer resources, use them longer, use them again and make them clean”. It also involves swapping fossil fuels for renewable energy and toxic materials for non-toxic ones.
“The challenge is not limited to one specific sector but rather encompasses everything we do. It’s not just about products but also about transversal aspects and making the circular economy work for people, regions, and cities”. This challenge also involves establishing connections between the circular economy and climate change, as well as ensuring that economic incentives are properly aligned to support its implementation.
To achieve this, European legislation needs to accelerate and promote the circular economy. This involves choosing regenerative materials like bio-based materials from organic residues and implementing business models like products-as-a-service, where a product is not sold but delivered as a service. This creates an incentive to redesign the product to make it durable, easy to repair, reusable, or allow remanufacturing and thus enable product value retention.
The ECESP’s Leadership Group on Consumers, led by the Collaborating Centre on Sustainable Consumption and Production, is exploring how consumers can be engaged in circularity through digital tools and the right infrastructure and how a business model needs to be built so that consumer demand for circular products and services will increase.
Source: Renewable Matter magazine
But how can the circular economy be incentivized?
According to Freek, “by changing economic incentives, it is possible to promote things that we want to happen and disincentivize things that we don’t want to happen. For a clear example of a negative incentive, I would refer to the International Monetary Fund data from 2020 showing that fossil fuel subsidies correspond to 6.8 per cent of global GDP. This number is astonishing.”
Likewise, The Ex’Tax Project started in the Netherlands shows that high taxes on labour encourage businesses to minimize the number of employees. On the other hand, resources tend to be untaxed, and their use is unrestrained, causing unemployment, overconsumption, and pollution. Shifting the tax burden from labour to pollution could create incentives to save resources and the natural world while enabling job creation.
“The proposal we would like to work on further in the EU involves shifting the tax burden from labour to pollution. You can put higher taxes on natural resources and pollution and use the revenue to lower the tax burden on labour and increase social spending. This would create incentives to save resources and the natural world while enabling job creation,” Freek added.
Opportunities linked to the upcoming EU Food System Legislation
Freek also highlighted the importance of biodiversity policies in promoting a sustainable food system. Through the Farm to Fork strategy, Europe aims to shift to a sustainable food system that has a neutral, positive environmental impact and helps to mitigate climate change and adapt to its impacts. “We have to ensure a healthy nature and climate, while guaranteeing food security, nutrition and public health, making sure that everyone has access to sufficient, safe, nutritious and sustainable food.”
Specific actions such as sustainable food production, sustainable processing and distribution, sustainable food consumption and the fight against food loss and waste prevention. Food banks and special “rescued food” restaurants should be promoted, and once the expiry date has passed, food should be processed so as to be conserved longer.
“We have to work on future proteins, such as plant-based ones. The agriculture of tomorrow will create local cycles, unlike today, where we import soy from Brazil, feed it to animals in Europe, and then export the meat to Asia.” For example, oils and natural fibres from citrus peel can be used to make food, cosmetics and cleaning products like PeelPioneers is doing.
Circular economy as a secret weapon
ECESP recently started a Biodiversity & Climate Leadership Group. The current climate, biodiversity and pollution crises result from economic activities that maximised profits and produced negative environmental externalities, but what potential positive impacts can circular economy approaches have on climate and biodiversity?
“I think that the circular economy is our secret weapon for reaching the climate and biodiversity goals. Studies show that 45 per cent of carbon emissions are not related to energy but rather to products. By going circular, we can almost halve those emissions, not at a cost but as a business model!” Freek mentioned.
The importance of considering biodiversity in the implementation of circular economy practices. While circular economy is often focused on keeping materials in use, it should also consider renewable energy, restoration of biodiversity, and social equity. The IUCN stresses the need to implement circular economy practices with nature in mind to avoid potential risks to biodiversity or the climate.
As the EU looks to lead the way in the circular economy, it is clear that the challenge is significant, but so are the opportunities. By implementing best practices, legislation, and economic incentives, the circular economy can help create a sustainable future for all.