Businesses who embed circularity as a core principle are able to reap the benefits — but one expert says the circular economy must be better regulated.
The circular economy is a milestone opportunity in the quest for net zero but needs regulation, according to two top experts.
At Engineers Australia’s Climate Smart Engineering (CSE23), CEO of Circular Australia Lisa McLean, who recently spoke to create about how to build a well-rounded circular economy, reminded delegates of the virtue of pursuing circular economy principles.
“We’re not going to get to net zero unless we embrace the circular economy,” she said, adding that doing so means more than focusing on economic benefit.
“We need an economic model that can [also] tackle biodiversity loss, the climate [crisis] and depletion of natural resources — and this is a major issue.”
Material consumption in Australia has more than doubled in the past 40 years.
“If everyone consumed like Australians, we’d need four and a half planets to live on,” McLean stated.
But if the circular economy is so necessary to achieve net zero and presents a $1.9 trillion economic opportunity to industry, the question was asked: Why is Australia “so bad” at embracing the circular economy?
“We haven’t owned the supply chain,” McLean said. And without the opportunity to “control” aspects of it, many of the benefits are also lost overseas.
The nation’s geography has also taken a large toll.
“[Australia is] a big country that’s spread out like Vegemite … So we’ve had to put a lot of resources into transport.”
Regulation needed
The discussion then turned to the lack of regulation in the circular economy, which was established in a recent Engineers Australia survey to be a major concern for engineers.
Professor John Thwaites AM, Chair of the Monash Sustainable Development Institute, posed a series of recommendations made by the Circular Economy Advisory Committee, of which he is Chair.
These recommendations — aimed at introducing regulation across systems — are to:
- Have a legislative or governance framework by which standards are set
- Improve the design and construction of buildings to take account of embodied carbon emissions
- Use disclosure regulation to bring the circular economy framework to a board and management level
Regulation is one of four aspects that, in Thwaites’ eyes, will enable a circular economy: economics and investment; strategy, leadership and consultation; research, data and communication; and regulation.
According to Thwaites, the role of the Circular Economy Advisory Committee is to “identify barriers and emerging trends, recommend Commonwealth interventions and to ensure that we engage widely”.
“While the states and territories have a lot of responsibility to [service] regulation, the Commonwealth does have a critical role.”
He said that Australia has “a lot of laggards” in industry who are slow to act, and incentives are necessary to get innovation going.
Behind the eight ball
International regulations are going further and Australia’s laws aren’t ready, according to Thwaites.
“Italy has mandated 100 per cent green public procurement,” he said. “China is a real leader in this area as well and has a circular economy [in motion] which is driving a lot of activity.”
And France has introduced a mandatory repairability index to encourage clarity around the repair, rather than the disposal, of electronic devices. Thwaites said this demonstrates that the world is shifting and Australia has to shift also.
“The Netherlands [is] making the circular economy very much part of their economic story … [The] focus that Europe has had on changing the mindset from … take-make-waste to a truly circular approach where we are much more resource-efficient is probably the biggest thing we can [learn].”
Regulation in the financial space is also important.
“Boards and management don’t have the disclosure requirements in [the] circular economy that they would in other areas,” Thwaites said.
They should “adopt mandatory disclosure of sustainability-related risks and opportunities aligned with international sustainability standards”.
Engineers Australia acknowledges the support of the Victorian State Government and Melbourne Convention Bureau in helping make this event happen.
Day 2 tickets for Climate Smart Engineering (CSE23) are still available.