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The Higher ED Blog: The birth of the circular economy in Ontario

Lucas Diaz Molaro / November 20, 2017

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The Higher ED Blog: The birth of the circular economy in Ontario

On June 9th of last year, the Province of Ontario passed Bill 151, the Waste Free Ontario Act. It is considered to be the first step in transitioning Ontario to a Circular Economy. As a Masters of Economic Development and Innovation student, I intend on contributing research to help guide our province through this exciting time.

We used to think that sustainability meant using less energy at home, driving less, and recycling. But these practices, while impactful, are only part of the equation. Pollution and waste are now a global concern, and the staggering amount of plastics clogging our oceans is by now common knowledge. The study of the Circular Economy aims to search for business models and government actions that promote less use of resources, more sharing, and more repairing. My goal is to understand how the Circular Economy can be applied in a modern regional economy the size of Ontario within its geopolitical and economic context.

Circular economy and zero waste

Transitioning to a Circular Economy is harder than it seems, mainly because we have been operating within a linear economy for so long. What this means is that our production cycles are designed so that we ‘take, make, and dispose,’ Meanwhile, a Circular Economy seeks to minimize the disposal portion of an economy, instead of looking for ways that the waste in the industrial process be reduced or even repurposed entirely. Though a truly ‘Circular Economy’ is likely not possible, experts in the field like Mervyn Jones of the UK and my supervisor Steven Young of University of Waterloo acknowledge that we can and should strive for a ‘more curvy line’.

Pursuing a zero waste economy is referred to as ‘closing the loop.’ The challenges and opportunities for doing so are numerous, and include:

  • legal and political aspects that affect reverse logistics infrastructure;
  • training and new technologies for waste processing;
  • legal requirements for corporations to either enable higher reparability or internalize the costs of production;
  • geopolitical and historical contexts that affect the current price of virgin natural resources and cheap labour;
  • revolving doors, campaign financing, and lobbying that takes place globally to ensure we continue the unsustainable amounts of planned obsolescence that create so much waste.

In a zero waste economy, products are more durable, more repairable, and shared within the community. The system still creates some level of waste, but it is much less than how we currently function, and some waste can be used for compost or recycled into new materials. Then, at the lowest end of the recycling pyramid, waste is turned to energy.

The goal of a zero waste economy is not only to produce less consumer waste, but to also lower the demand for the virgin natural resources that are required to churn out new products. Approximately 90% of global waste takes place during resource extraction, factory production, and the transportation of consumer goods, so increasing durability, reparability, and sharing will have significant impact on global sustainability.

However, such an alternative represents serious challenges for many existing industries and labour forces. The Ontario government has taken a great step in trying to understand the level of investment and regulatory support required to reduce economic externalities while increasing returns through Circular Economy models that are succeeding worldwide.

Zero waste in action

The concept of the Circular Economy can be applied in practice at the regional level as well as the community grassroots level to meet the needs of different community stakeholders. Now that the province of Ontario has passed the Waste Free Act, cities and regions have a great opportunity to become global leaders of the Circular Economy. This year I was able to attend three conferences which hosted speakers from many different sectors coming together to make the overall economy more circular. I am happy to see that all the institutional aspects of the LED theories I studied at the MEDI program are taking place in the development of the new Circular Economy clusters across the world. On top of the thousands of businesses that aim to create the Circular Economy, there are many levels of government working on circularity. There are also many public agencies, universities, incubators, and industry institutions that promote education, research, and provide conferences for people to network. More importantly, some of the largest multinational organizations have an interest in becoming more circular to save a lot of money in materials, so they are active participants rather than a barrier to sustainability.

My favourite cases

Europe leads the way in promoting the Circular Economy and they have seen great results in innovation, employment, and government budgets. Of particular interest is their use of public procurement for achieving circular goals. This Danish-initiated program is a plan to use as much as possible of the annual $2 trillion procurement budget to induce positive overall economic growth. At the local level, there are small municipalities in the UK, Denmark and Germany that reduced their operating costs significantly and induced local innovation with small changes in the way they procure uniforms for workers, use electricity, buy furniture, and upgrade their infrastructure with fewer resources. One municipality in Germany even created an app to rent municipal cars to the public when they are not in use.

In Asia, a small town in rural Japan is on track to become zero waste by 2020. While some of their efforts might be considered a little extreme—residents have to personally take their recycling to a facility and sort it by hand into 24 different categories—they demonstrate the feasibility of a Circular Economy, if at a small scale. A resident of the town acknowledges the oddity of their efforts, but assures us, “If you get used to it, it becomes normal.”

In my opinion, Ontario is positioning itself well to becoming a global leader in circular research and innovation. The ministries of Education, Health, and Transportation are already considering circularity into their procurement strategies. The Toronto School Board and some local hospitals have saved a lot of money by encouraging reuse and repair. One example within the municipal context is Oxford County where they have been drafting a Zero Waste Plan, exploring technologies like a “Materials Recovery Facility, a wet anaerobic digestion plant, and Mechanical Biological Treatment.” Their first steps give us some insight into what is out there, and what might be feasible for other communities in Ontario and beyond.

To that end, my research will seek to identify which sectors of the Ontario economy are ready to become circular, and which sectors can become more circular with the right policy recommendations. In particular, I will focus on the repair, maintenance, and recycling sectors in Ontario. Measuring these capacities in the context of regional comparative advantage and adaptive capacity will ensure that my policy recommendations for our different regions are accurate, as they will be based on the exact local levels of production, consumption, and waste.

 

About the author

Lucas Diaz Molaro completed his BA in Administrative Studies at York University in 2008. He took a business degree to understand how to manage or create green businesses. At the time, he was very impressed with the idea of solar and wind energy technology, and is still impressed by the positive impact that green-tech can have in the energy sector, but he came to understand the importance of reducing materials after reading Peak Everything by Richard Geinberg.

He also has 10 years of experience as an entrepreneur in the Education sector and is the founder of EndNeoliberalism.org, for which he wrote three small books on how the government can reduce externalities and what alternative economic models exist to Neoliberalism. His research in the book led him to more questions on how the Circular Economy can be materialized at the local level, and he is pursuing a Masters of Economic Development and Innovation at the University of Waterloo in order to better understand how progressive action can make circularity happen.

About the series

Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.

Established in 1987, the Master of Economic Development and Innovation (MEDI) is one of the only graduate programs in Canada focused exclusively on economic development. Students learn economic development theory and practice, and are exposed to leading edge knowledge, tools, and approaches to address contemporary challenges in cities and communities across Canada and internationally.

The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.

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