Circular Economy: What is it? (Ft. Jorge Ueyonahara)

Background

Jorge Ueyonahara: Professional on Social Responsibility focused on improving productivity through efficient management of resources and processes that generate sustainable value for the organization and society. Current professor of the Universidad del Pacifico (Lima, Peru).

Interview

Rony: I’ve read a bit about circular economy, but how would you define it in your own words?

Jorge: Well, it’s not easy to describe. I’ll try to make a definition. We are taking resources and transforming it, since we have finite resources to extract. There are many places to dispose of useless material. From the beginning, we were trying to reduce our ways, and use all the materials we have, but you realize that it can be used to make these resources again. It starts from many years ago, but now, as the environmental crisis grows, we are trying to make this into an economical approach. From my point of view, because I studied business of administration, I can give you an overview of this. Most will say that circular economy is about recycling, and recycling is a part of it, but it is not the only strategy that counts. In fact, I know there are some authors that say there are many R’s, more than just Reuse, Reduce, and Recycle. Additional to this, there are several business models that currently use the strategies to be more useful and engaged with all the state-holders. So, circular economy for me is a business model on how we can use the resources optimally in order to provide peak satisfaction for others state-holders.

Rony: You mentioned something about the environmental crisis. So, how do you think that global warming and circular economy relate? Positive? Negative?

Jorge: Our environmental crisis comes from our behavior as humanity. We extract a lot of resources and transform them, and doing these transformations, we release carbon emissions. We are emitting more carbon than before, at a faster pace than the planet can support. So, our planet is becoming warmer, and some will feel the effects, while others won’t. How can we deal with this climate change? I believe circular economy is one way to fight against climate change. Why is this? When we are trying to reduce our consumption of resources by optimizing, instead of transforming more resources, we can reduce our carbon emission because we are not extracting resources anymore. We are using the same resources again and again. One easy example is Uber, if we own a car, most of the time, the car will sit on the parking lot for multiple hours. Instead, people who use uber, can transport people from Point A to Point B, and the car will be constantly running for transporting humans. I don’t think Uber realizes they are helping through circular economy. The resources are being used in an optimal way, and if we are a private owner of a car, it will be used 2-5% of the whole life of the car, but instead the people or the company is trying to optimize the car to get people to different places.

Rony: I’ve watched a video called “Closing the Loop”, in which there is a company that makes carpet and either washes the carpet and resell as used, takes apart the carpet to make it anew using the same resources, or uses the carpet as energy. Do you believe that companies, such as this, have potential?

Jorge: Yes, I believe so. Some companies have realized that they have a huge impact on the environment, doing the transformation of resources, and then disposing of said resources. So, the companies try to optimize the resources that they already have, in order to transform it in different ways of making the same resources useful. There aren’t many examples, since most are trying to figure out how to incorporate circular economy into their business, in order to make more economical and financial decisions. It not only appeals to the customer, it needs to be good for the company, because if it isn’t good, then the company cannot survive. So first, we have to make sure that the company can transform their current or old business model to a new one. One of the problems of this could be the people itself, to accept that we can use recyclable goods, because most of the time we want to have new products, so we have to make sure that, and the companies too, have to figure out how they will fulfill our needs. We also need to change and accept that we are using the goods, the machines, in order to get some resources from the machines, like phones, printers, etc. instead of honoring this process.

Rony: So, optimizing the process?

Jorge: Optimizing is one thing. For example, most of the time we understand optimizing as reducing the number of materials, water, etc. needed to transform the good. It is part of circular economy, but is not the only way to go into circular economy. For example, if you want to make a book, we want to reduce the ink, paper, etc. But if after I read the book, I decide to throw away, it doesn’t matter if I optimized the resources. So, according to that, we have libraries for these occasions, to rent a book for a few days, a week, or use a different way to read the material, like cellphones. Besides, the way we make materials will change. It will take time, for sure, but I believe that we have to do some sacrifices in order to be more sustainable. Also, I believe that we can avoid the climate crisis. It is very difficult to change people’s habit. For example, many people eat meat, and they most likely don’t want to change the diet, in order to wait for the climate to change for 10, 20, or even 50 years. They will not wait because they will not live here for that long. Somebody has to take responsibility for it, but not me. Everybody has to change.

Rony: For my 4^th question, people such as Greta Thunberg have campaigned for the end of global warming, to take action. Do you think the same could be done for circular economy, as in rallying support for the change?

Jorge: Yes, I believe so, there aren’t many people in circular economy, and one person I can say is Ellen McArthur, she’s British, but her focus is mostly for organizations. Companies and civil organizations that work or follow-on bigger companies. I believe she doesn’t speak for the public in general, but I could not find anyone who is campaigning for circular economy at this time. Greta is doing a fantastic job, trying to aware people, especially the younger generation, in order to raise awareness or convince families to understand the scope of the environment. Circular economy has to be a part of the solution, and we need more voices to raise the possibility to implement circular economy. Here in Latin America, we are doing more recycling. I believe recycling is a huge part, but is a short part of circular economy. Because we are trashing our resources, we have to rethink them as reusable resources, so the business model has to change in all the business to make sure this product doesn’t end in the garbage.

Rony: For my final question, do you believe that circular economy, if backed by governments, could allow the change to act faster?

Jorge: Everybody has a key role to play within the circular economy. Governments should allow companies to try to close the circle. For example, here in Peru, we have, probably in other parts of the world has the same issue, but when you have a battery car, and when the battery dies, it becomes a dangerous good, so you need special permission to transport these batteries to get them recycled. A company with special permissions can transport the battery. The government have to make laws in order to help companies who get this battery back to recycle and companies have to recognize that trying to make the goods circular will benefit them. Also, the government may need to provide incentives, such as tax breaks, and they also have to train people, but I believe there is still not a complete understanding of the big picture. Here in Peru, for example, the Environmental Ministry is the leading ministry to work on environmental issues, and since most of the issues are related to material usage, they were the first ministry to promote circular economy. But they are focusing mostly on the environment as a contamination and pollution. Later, Production and Commerce Ministry are working on how to produce goods in order to meet the circular economy idea, by reducing the number of resources, such as water, energy, and other materials. But they are still missing other parts of circular economy, such as transforming the business model.

So, the government has a huge role, but in Peru, and in other places of the world, are doing it in separate ways. They are trying, but so far are not fully successful. In Germany, for example, the Minister who is leading the country to adopt circular economy, is also the Minister of Education and Research. For me, that makes a lot of sense, because they are very neutral and see together with all the ministries, and every Ministry has different approaches for the same problem, and that’s a huge difference from every other country. Currently they are not leading the countries because they are doing it very slowly but securely. The whole world, especially the U.K. and the Netherlands, are leading the countries of the world for circular economy. Many others are following them, but I believe some have different approaches different to others. For the second question, Europe launched Green Deal in 2019, made compulsory for all countries to incorporate circular economy as a type of economy, and all the countries have to do the same with their companies in the same country, in order to reduce the carbon emissions to reach the Paris Agreement.

Rony: Alright, thank you for agreeing to this interview and I hope you have an amazing day.

Jorge: Ok, thank you for allowing me to speak about circular economy.