The value of a circular economy to Australia could be $26 billion a year by 2025, according to an action agenda released at the World Resources Forum Asia Pacific being held this week in Sydney.
The agenda, released by the Institute for Sustainable Futures at the University of Technology Sydney, has been designed to bring focus to the significance of resource productivity and innovation for Australia’s future.
“At the core of this alternative economic model is re-thinking design to maintain the value (economic and functional) of resources (energy, water, materials, knowledge) in the economy. This is achieved by re-energising and re-imagining traditional practices of reuse, repair, remanufacture and recycling,” the authors state.
Rather than simply focusing on cycling materials, the paper refers to a circular economy as “a broad suite of strategies that includes technology innovation as well as business model innovation, new design thinking and novel modes of consumption”.
“Our ambition with this call to action is to seed new conversations and collaborations – between business, academia, government and the community – needed to drive a new wave of responsible prosperity for Australia in the Asian Century,” the action agenda states.
“By bringing together business, research, technology and policy, we can deliver the skills, products and services to sustain prosperity at home and in our region.”
Four “opportunities for Australia’s future” were presented:
Replenish stocks and rethink value
Australia needs to build a productive economy that preserves and replenishes stocks of natural capital rather than degrading them, and should establish a national system of environmental and waste accounts, recognising both are valuable resources. By adopting the “take-make-recreate” approach of the circular economy Australia can go from being a global leader in primary resource production to being a leader in generating value through resource productivity.
Design for renewable energy and resource cycles
Australia has an opportunity to couple renewable energy to value-add in other sectors, including advanced manufacturing, mining and minerals processing and future transport – boosting resource productivity.
Harness disruptive innovation for production and consumption 2.0
New materials and digital technologies, advanced and additive manufacturing, and open innovation are transforming conventional business practices. Australian firms can influence the design of products for easy remanufacturing and recycling, whether made locally and overseas.
Leverage know-how into new networks and markets
Australia starts from a vast base of knowledge, skills, and technological and technical know-how, that can be aligned to provide a competitive advantage for capturing new markets and growing strategic networks. Australia is a leading provider of advanced services to mining, with more than half of the software used globally for operating mines developed in Australia. This know-how can be applied to access new markets in waste and unconventional resources.
Recommendations for federal, state and local government include:
- Embed resource productivity in a coordinated policy agenda – targeted, coordinated and consistent policies across federal, state and local governments on resources and energy productivity integrated with national waste management policy is needed, including levies on resource extraction and waste disposal, appropriate targets for recycling and resource productivity, and ambitious targets for renewable energy
- Promote a market for secondary resources and products – public procurement policies such as the NSW Government Resource Efficiency Policy have significant potential to promote the purchase of goods made with secondary inputs and to de-risk investment in new resource management infrastructure. Expanding the significant steps towards supporting the return phase of products at end-of-life should be a priority, such as via product stewardship regulations and container deposit legislation.
- Create an enabling environment for technology and business – governments can play an important role in creating the optimal conditions for innovation in technology and business by de-risking investment in R&D and new infrastructure. Key to this is encouraging industry-university collaboration for innovation through tax incentives that foster private investment in R&D. In addition to support for R&D, governments can enable deployment towards commercialisation, such as demonstrated by international policy measures such as UK’s Catapult Initiative.
Opportunities for business include:
- Design-led system innovation – significant opportunities for energy and resource efficiency are being seized through design-led innovation from IT- enabled demand management systems to “virtualisation”.
- New business models – New business models for the circular world allow businesses to diversify their revenue streams, engage with new markets, and de-risk in light of resource constraints. New value is being created through five archetypal new business models:
- Substitute with renewable inputs:
- Maximise material and energy efficiency
- Create wealth from wastes
- Adopt a stewardship model
- Promote access over ownership
- Encourage sufficiency and new modes of consumption – incentivising responsible use of products and services, designing for long-life, providing warranties for secondary products and offering virtual over physical upgrades
- Collaboration for commercialisation – new strategic sector-wide partnerships can promote circular outcomes, as can industry-university partnerships