The Renewable Energy and Waste Industries: 21st Century Confederates in Changing the Global Economy

October 11, 2016

NOTE: Images in this archived article have been removed.

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A slightly extended version of my column this month in Recharge Magazine:

Familiar transformative technologies such as the telephone, car, and air conditioner mostly disseminated slowly in the 20th century. They took decades in America to reach 50% of households and move beyond. In the 1990s, the computer, cellphone, and internet travelled much faster growth curves. Such accelerated technology takeup seems likely to continue in the 21st century, as renewable energy, batteries, and electric vehicles are in the process of demonstrating.

Two things are changing alongside this speeding up of product penetration. The first involves power and fuel for manufacturing and dissemination of products. Increasingly emissions constraints will entail renewables providing this. The second involves waste. Almost all of the product lifecycles in the twentieth century were linear: the products were made, used, and at the end of their useful lives either incinerated or sent to landfill. Increasingly materials and pollution constraints will entail those products following circular rather than linear pathways, wherein products and their component parts will be recycled, remanufactured, and refurbished.

The transition to renewables, as I argue regularly in this column, will be mainly driven by mutually reinforcing megatrends in environmental law making, development of a disruptive family of insurgent energy technologies and industries, and contemporaneous decline of incumbency industries in the face of ageing problems. The transition to circular economies is well summarised by Accenture analysts Peter Lacy ans Jakob Rutqvist, in an excellent book, “Waste to Wealth”. “The old linear model of business is not only environmental suicide”, they write, “it’s also business suicide.” These are strong words for consultants making a living by advising some of the largest corporations in the world, entities often not noted for the ease with which they embrace fundamental change. The authors go on to argue that the savings are too big to ignore – a $4.5 trillion reward for performing circular economy business models by 2030 – even if one rejects the environmental imperative driven by an increasingly stressed resource base.

They take no prisoners articulating the extent of the change inherent in a switch to a circular economy. “It’s about eliminating the very concept of ‘waste’ and recognizing everything has a value.”

Business models become very different in this world, just as they do in energy. Companies intent on embracing the circular economy have to go well beyond the point of sale, creating connections through product returns and customer engagement. As energy companies move from centralised to decentralised power, they have to do the same: they are operating in new waters, where people are beginning to provide the energy they need for homes and commercial premises themselves, and will increasingly do so if energy companies don’t find attractive new offerings consistent with the global energy transition.

The emissions prizes of both a renewable economy and a circular economy are huge. The Paris Agreement is essentially a charter for the decarbonisation of energy industries, to be achieved as soon as humanly possible. This explains why so many cities and corporations have taken on 100% renewables targets. Meanwhile, adopting a circular economy could involve 70% cuts in carbon emissions by 2030, according to a recent Club of Rome study of five European economies. Modelling a mix of renewable energy, energy efficiency and material efficiency strategies, the study finds that GNP would grow by c.1.5% across the nations studied, and more than 100,000 additional jobs would be created, cutting unemployment by one third.

Champions are essential in this new confederacy, and they already exist. Take the city of San Francisco. It has a 100% renewables target, and is taking policy steps consistent with that, not least requiring solar to be installed on or incorporated in all new buildings. As long ago as 2002 it became a pioneer of the circular economy, taking on a target of zero waste to landfill or incineration by 2020. Within a decade of that it had reduced waste to landfill by 50%, becoming Greenest American City in 2011 as a consequence. It currently holds the North American record for recycling & composting, with an 80 % diversion rate. As for greenhouse-gas emissions reductions, its targets are a 40% reduction below 1990 levels by 2025, and a 80% reduction below 1990 levels by 2050: consistent with the Paris Agreement. Continuing to target a renewable-powered economy and a circular economy economy in parallel will surely help it achieve those, inspiring other cities to do the same.

Of course, it is possible in principle to go much faster even than this. The Centre for Alternative Technology’s “Zero Carbon Britain” plan gets the UK to decarbonisation as soon as 2030 without any outlandish assumptions about new disruptive technologies. Bioenergy comprises more than a quarter of the fuel mix by then: a mix of biomass, synthetic liquid fuel / biofuel, and synthetic gas / biogas. The scope for using the recycling of existing biological material in this scenario is huge. Incredibly, global food waste alone would be the third biggest emitter of greenhouse gases after the USA and China, were it a country.

And of course, there will be innovation en route by the new confederacy. This too is already happening. Take Dong Energy’s recent funding of the first full-scale power plant using bugs to clean up household waste. Novozyme enzyme technology “washes” organic matter from unsorted waste from the equivalent of 110,000 homes, creating a slurry that can be turned into gas for use in power generation, or motor fuels.

The future can be both renewable, and circular. Sooner than many think.

Jeremy Leggett

Jeremy Leggett is a social entrepreneur and author. He has been an Entrepreneur of the Year at the NewEnergy Awards, a CNN Principal Voice, and is founder and chairman of renewable energy company Solarcentury, and SolarAid. He chairs the financial think tank CarbonTracker, contributes to the Guardian and the Financial Times, and is an Associate Fellow at Oxford University’s Environmental Change Institute.

Tags: circular economy, energy transition, Renewable Energy