As the 2016 Rio Olympics close, Tearfund’s Senior Economics and Policy Associate, Richard Gower, reflects on the potential prizes to be won for athletes and the poor from valuing our waste better.
As pollution tainted Rio’s picturesque setting and the UN advised athletes to spend ‘as little time in the water as possible’, the wider issues – and surprising opportunities – arising from humanity’s waste problem came under the spotlight during the Olympics.
Our present economic model, which could be described as ‘take, make, dispose’, has generated significant improvements in our standard of living, but is also harming us. According to the World Health Organisation, each year twenty times more people die of diseases linked to mismanagement of waste and pollutants than die from malaria. In India, almost a quarter of childhood deaths result from polluted air, contaminated water or other environmental problems.
Remarkably, in many sectors, the very same waste could be used to create jobs and boost the economy, saving lives in the process. Take the organic waste being discharged into Rio’s Guanabara Bay – this could be a profitable source of renewable energy and fertiliser if handled correctly. In Kenya, social enterprise Sanergy do exactly this: they use the waste from their network of high-quality, low-cost toilets in the slums of Nairobi to produce high-value agricultural inputs and energy.
This is ‘the circular economy’, a shift in mind-set which sees waste and inefficiency as an opportunity. The concept has been making waves in the business community for the last five years, but the idea has yet to properly cut across into the international development discourse.
A new report from Tearfund and the Institute of Development Studies suggests that if implemented in a development context, the circular economy offers a triple win for those in poverty. Case studies and insights from practitioners and academics around the globe suggest that circular business models can increase economic growth, improve the quantity and quality of employment and reduce environmental impacts and associated mortality.
Low-income countries already have good foundations upon which to build if we act quickly. A traditional culture of repair and re-use is currently being eroded, but could instead be harnessed to provide an industrial base for the economy. The Kumasi industrial cluster in Ghana for example, is a major centre for automotive re-manufacturing and repair surpassing anything found in Europe: 200,000 workers are employed (up from 40,000 in the early 1980s) in more than 12,000 businesses. In Brazil, local municipalities involve informal waste collectors in formal waste collection and sorting processes, the result is often to increase recycling rates at the same time as improving their incomes and working conditions and reducing costs for government.
In fact, the idea holds out the promise of an alternative growth model that reduces the tension between lifting people out of poverty (through economic development) and protecting the planet (which is threatened by our current growth model). This tension casts a long shadow over the Sustainable Development Goals, and adopting circular principles would thus dramatically increase the scope for achieving them.
According to McKinsey’s Martin Stuchley, ‘businesses that work on basis of circular principles are amongst the fastest growing in the economy’, and the report identifies several ways to reduce barriers to circular businesses in developing countries. Some of these are no-brainers – like reforming UK and EU design regulations that make products harder to repair in developing countries – whilst others are more challenging, such as reforming tax systems so that they tax things we want to discourage (like waste) and not those we want to encourage (like work). The UK Government could also do much more to support these practices on the ground in poor countries, for example through the cross-Governmental Global Prosperity Fund and their Development Finance Institution, CDC.
More generally however, there is a pressing need for the development community to get a handle on the circular economy as a concept. It’s almost entirely absent from the discourse at present, and offers an unparalleled opportunity. It’s good for the economy, good for society and good for the planet, and would also be good for the health of competitors at the next Olympics.