Circular Economy Podcast, Series 01, Episode 3

Tom Passmore

Friday, 23 November 2018


TechForGoodLive Dsposal Circular Economy Podcast Series 1 Episode 3

The third episode of series one of Tech for Good Live and the Circular Economy asks the questions "What happens to the waste industry?", "What's next?"

Bex-Rae Evans - Consultant at UX agency Sigma

Tom Passmore - CEO and Co-Founder at Dsposal

Professor Amir Sharif - Professor of Circular Economy in the School of Management at the University of Bradford

Ken Webster - Head of Innovation at the Ellen MacArthur Foundation

Listen to Episode 1.

Listen to Episode 2.

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Transcript

Note:  Tech for Good Live and the Circular Economy has been made to be listened to and not read. We strongly encourage you to listen to the podcast, which includes emotion and emphasis that's not on the page. Transcripts are generated using a combination of speech recognition software and human transcribers, and most definitely contain errors. Please check the corresponding episode before quoting in print.

[Guitar Music "He Swear He Would" by George Fell]

Bex-Rae Evans: Welcome back to the Tech For Good Live and the Circular Economy podcast as part of the Disruptive Innovation Festival 2018. This is episode 3. If you've not listened to the first two what are you doing here? Go back and listen to them.

Bex-Rae Evans: In the previous episode we looked to practical examples of the Circular Economy in action, or at least parts of it. We talked about tyres and fridges. A lot about fridges to be honest. And we also heard how Apple has robots that can dismantle phones with terrifying speed. And then we ended on a bit of a grim note. We were wondering if the waste industry and the 100,00 people who work in it might be at risk. Is this a legitimate fear? What are the unintended consequences of the Circular Economy? Let's find out.

Bex-Rae Evans: So, Tom what is gonna happen to the waste industry if we all go circular? Is that a thing, by the way, going circular?

Tom Passmore: We can claim it. Claim it now. So I asked everyone about this. I asked Ken. I asked Amir and I asked Amanda about this and they all said exactly the same thing. There's always going to be a waste industry. It might have to change because they'll be people like the longevity of products would increase. People people will keep materials and products in-house within inside their organisations. But they'll always be unintended consequences. There'll always be the things that fall out. Even in the Ellen MacArthur Foundation's Butterfly Diagram that we talked about in the first episode they still have a landfill and energy from waste cycle at the bottom because they understand that that's like the true perfect model. They'll never exist like there's always going to be waste within it and they'll always be jobs for those 100,000 people. The other side of it is quite interesting though and like it comes into this idea of unintended consequences. So I talked to Amir about this.

Professor Amir Sharif: Normally when we went when people students or companies or organizations that we talked to about the Circular Economy. They talk about systems thinking. They tend to talk in terms of more in terms of processes and how things work. Well that's fine but processes are only one part of the of the equation one part of how things are. When we talk about systems thinking actually we're talking about complexity. We're talking about dynamics. We're talking about interconnectedness and so when with where we say systems thinking we're talking about interrelationships. We're talking about interconnectedness. We are talking about considering intended and unintended consequences. And that's a big shift for a lot of companies and individuals to to consider. You know when you're making a product be it a plastic bottle or a car or a smartphone. Are you really thinking about the end state of that product when you design it or when you upgrade it? No you're not. You're probably thinking about cost control about profit margin, about marketing, about you know the the whiz-bang features of that product. You may not necessarily be thinking about well what would happen to this product when it's no longer fit for purpose. How can we avoid waste? Is there other benefits of this product? And that again is is where systems-thinking becomes very useful because it prompts us to think about all of the interrelationships that might exist.

Bex-Rae Evans: That's quite interesting it links into some that we talk about quite a lot on Tech For Good Live. So we think about how everything is bigger than than the tiny little thing that it is. Like everything is bigger than it is.

Tom Passmore: Yeah.

Bex-Rae Evans: That it's connected and we talk about something called wicked problems which are problems that are connected to things that seem unrelated to it but actually if you poke that thing over there it's going to affect something completely different in it in another part of the world somehow. And I think that's kind of that kind of systems thinking I guess is supposed to be the anecdote to that.

Tom Passmore: Yeah the solution.

Bex-Rae Evans: The antidote.

Tom Passmore: The antidote to em to wicked problems. Yes and I think like and I think that is part of it. To make sure that you do take that step back, you have that holistic view of everything and you go right if I produce this product or this service or if I think about this in this way what will happen next? Or what will happen well after that? And will have an impact on that?

Bex-Rae Evans: It's a lot it's a lot to think about. As he said that I mean Amir was talking about how designers aren't really thinking about this at the minute when they're designing a product. They're thinking about what other things.

Tom Passmore: Yeah.

Bex-Rae Evans: Profit margins, like durability but they're not really taking this into account. And we talked about it ethical design though I mean it's bigger than just thinking about circular, the Circular Economy. It's also thinking about privacy by design is a thing we all know we all need to think about. Accessibility is a thing we all need to think about. Which and and both of those things a lot of designers still aren't doing and now there's this whole new concept of the Circular Economy and systems thinking on top of that. As a designer you've got a lot to.

Tom Passmore: But I think actually they all come together so they are all systems thinking and it's like so the idea that the podcast like posed was is their going to be a waste industry? It's like well like the terminology waste industry probably not. Because it's that interconnectivity I'll just get blended into one because everyone will think about what happens next. There won't be an industry around it it will just be "The Next" and that's the thing. So at the moment I think there's so many compartmentalizing of ideas and like yes as privacy and etc but actually take a step back, take a breath and actually really think about your product, your service, your offering. And all of their kind of all of the features that need to be incorporated into it. End-of-life, protection, security, all of that comes into it, and it takes a long time but again you have to start with the under mind and then work your way back from it.

Bex-Rae Evans: As you say you'll never be perfect so I'll guess this whole concept of unintended consequences is obviously that it it wasn't intended and you didn't know it was really gonna happen. Didn't really maybe imagine it happening is that is that right? Is that what you mean by unintended consequence?

Tom Passmore: Yes yeah, so kind of. Like we so in the last episode we kind of talked about the the township in Ghana and an Amir touched on it with this idea of like like how do you square the circle of: If you create a system to take back all of you are say like iPhones so back in-house. You disassemble them, you keep all of the rare earths in there. Those rivers of cobalt, that Amir so eloquently talked about, would disappear and dry up which is good for the environment but that economy that is based around it is collapsed. That is an unintended consequence of that looking after the environment. So then you start having to like kind of balance all of these different sides of this square. Of how do you look after the planet? How do you look after people? How do you look after the economies that work within these systems? And then you have to think at a systems level to do that. To solve these wicked problems.

Bex-Rae Evans: So you're saying if you if you where that phone manufacturer you start taking them in-house. The river of cobalt dries up, so therefore the livelihoods of that town dries up. The phone manufacturer should be considering doing something about it.

Tom Passmore: Yeah yeah and this this is this is how you think in a system. Like you see all the knock-on effects that you've had with your product and then you work through them all. And then you go, right where where is my burden? Like what is my burden? It's not just on your materials, it's not just on it's on your people, it's on your resources, it's on your time, it's on your effort.

Bex-Rae Evans: In a circular economy though is that the burden is about the waste so by bringing all in-house they're reducing their their waste burden. But nobody's holding them to account for the the village in Ghana.

Tom Passmore: Well in in the Circular Economy actually it's like they talk about resources and kind of burden to do with resources. But those resources are around time, people, money, effort, IP. All of these things as well like. Waste waste and resources is just one kind of strand to that burden. So yeah but and like and again I went in and I talked to Ken about this because again it's like it's really high-level thinking and like it's really complex and Ken was like he said he was at the start when the MacArthur Foundation started. And and I just want to ask him about the future state. Where do we go from here with the Circular Economy?

Ken Webster: Now this zero burden thing and intelligent look at this could say. Look we can track materials now if they're big ones. What if we molecularly stamped materials you see? So that you could you I don't know if you've seen, everybody see Blade-Runner but in there they have a look at who made this artificial snake. They have a look at the scale and then read the code number off it. So it's not beyond thought and I know some at least one very large firms have a look at this. About stamping very very small you know all over everything invisibly to the naked eye. Stamping the code number. Then you could say, we've gathered all this stuff and we know who made it and if they didn't have a really good recovery system in place. Well we'd just send them the bill. Because that's the responsibility a bit. They didn't recover it well, they didn't have a system where it worked well. They didn't get it back, they didn't put it into a system. So the external cost gets paid because we can say 20% of this garbage we've collected originated in your factory, your PET factory. I think that's the where we might go in the very end of looking at future scenarios. Why not keep a track on materials forever. Even if they end up in small pieces. Because you can allocate costs then. Don't know what you think of that Tom? I know it's a bit space-age but

Tom Passmore: No I like it. I do like it. I like, I like the Space Age thinking around it.

Bex-Rae Evans: I like it from someone who wants the planet to continue existing. But I don't know. I've got a few questions around how corporations would take that. I know AO is like kind of gone there. I know the tyre people have been doing it for ages anyway.

Tom Passmore: Michelin, yeah.

Bex-Rae Evans: Michelin but like this is a lot of liability that the companies. This is an extra bill that they're gonna have to foot, this is a lot to think about I think from the organisation. They're gonna have to think of the cost of product. The cost of manufacture and now on top of that the cost of getting rid of the rubbish or paying for the fine for the rubbish. Like does this work out does this work out mathematically? Does it work out from a business perspective?

Tom Passmore: Well so this is why Amir looks at it from when i kind of a the business angle. And it it comes down to actually the durability of the of the product. So does does it work on a on a product that'll last a year and a half? Probably not like spending all that extra time on your design to think about it and then making sure that everything is stamped so you know where it goes next and having systems in place to like take them back in-house. No. But when you're talking about the durability of it over, say, a decade. Paying that monthly subscription rate every time like i said before like it just makes sense to make it durable and lasts longer and the other side of it is this kind of concept that Ken and Amir talked about is about stock management, their stock management concept of, if it's theirs then it's their asset. If they're like having it as a service which means that that company has an additional stock, an additional like kind of money flow so they can go "right don't worry. I know that we've got a thousand items in stock but we've ten thousand items out in the world that we know we're going to get back in X amount of times because that's the life on that product. So we've got all of these materials out there in this service. And we're paying a subscription model for it. And we know how to take them apart in a quickly and effective way."

Bex-Rae Evans: So somebody's going to have to implement this as well from the perspective so we're talking about these molecular stamping. In in Ken's like the way he described it somebody who's almost going around scanning everything and totting up a bill. So I guess somebody's gonna have to do that as well.

Tom Passmore: Yeah yeah and again very good question I asked Ken about that one.

Ken Webster: The point is you made a clear point and probably why your work is so important. We've got to be able to track materials properly in terms of the quality, where it is, how long it's been there, who owns it or doesn't own it. Yes. Otherwise you always get what Bill McDonough calls downcycling. Because you can't define the flow. You always have to put it into a lesser use because there's contamination questions. And you know that's only another cycle from the dump in that case because it gets more contaminated, more unknown and then people go on I don't really want that or it's only good for this. No let's make some railings out of it you know. Which is still a use but it's not what I think you and I are talking about which is to keep it in the highest quality for the most time. And so data is a key to this. Data of course and that's why I put in that fantasy thing about let's have molecular stamping. So we can find out who made this.

Tom Passmore: And what it is.

Ken Webster: And what it is. Which is the other bit about it because if we know what it is we can make a market in it.

Tom Passmore: Yes.

Ken Webster: So if it's like as in this chunk of thing, what is it?

Tom Passmore: I mean you could you could maybe get a ray gun on it. I don't what they are called a mass spectrometer gun. To kind of figure out but that's expensive, it's time consuming.

Ken Webster: But then designing these now to more street use.

Tom Passmore: Yes, oh yes.

Ken Webster: You know so they're trying to get this these tools down to the most street level so that people who are gathering stuff can go oh what what I got?

Tom Passmore: Yes.

Ken Webster: Oh I know what I've got. Here is a certificate for it really just for coding for it.

Tom Passmore: Yeah.

Ken Webster: Then I can sell it. I got three kilos of this. It's this quality, do you want it? So data is a heart of it, you're at the heart of that sort of thing. But it's a long it's a long run project before that wonderful land comes into view. But it's really exciting that you are really part of that revolution.

Tom Passmore: It is really exciting. Ken is totally right that the data is the key so there's kind of a thing in the waste industry that there's two types of waste data. There's terrible waste data and no waste data. And when we founded Dsposal we knew it was vital that we have to use tech to make it easy for everybody to improve the data. Because if we understand kind of where those resources are and there's like this real step into the right direction. I mean I love the idea of like molecular stamping allowing resource companies to go out collecting these things and knowing exactly what they are so they have the highest value when they go back in and that is fascinating.

Bex-Rae Evans: It is but also I have this my idea of people going around collecting rubbish for money because they don't have any. That just I don't know I know that isn't what he's saying but that came to mind.

Tom Passmore: But isn't that what the waste industry is at the moment?

Bex-Rae Evans: Yeah true.

Tom Passmore: Like as in people going around collecting stuff and then getting paid for it. And then getting paid for it. Like they like if they didn't have that job then they might not have any money so that is that industry anyway. But it's just it's quite a lot more refined.

Bex-Rae Evans: Is, talking about money and costs as well, so you talk about this monthly, income, rental system and if that gonna end up costing more for the consumer because you the way we're talking about it is that yeah that actually has a lot of financial benefits for the business. Does that mean it's more expensive for me as a consumer?

Tom Passmore: Again I think it comes down to the individual business models. And it comes down to this idea that Amir talks about of the the economies of scope, rather than economies of scale. So if you if businesses branch out and think about ways of doing it differently, to make sure like AO and AO Recycling did. They have a retailing operation, then they go to a logistics operation, then they go to a recycling operation. That's like creating a scope for their business and all ties into each other and it all works really really well. And I think that's a way of keeping costs down for the consumer. Because it's it's neater, it's cleaner as it works through these processes.

Bex-Rae Evans: Well you would think as a consumer as well it'd have to be in some way more cost-effective because you never you never get to own it it's a rental system you are never owning anything like. And and we know how obsessed people are with with having things and owning things at the minute. There's gonna take a big shift of mindset. How do you think we'll we'll get we'll get there? And what what kind of how we're gonna there's a lot of power shift I think as well in in ownership and not ownership right?

Tom Passmore: Yeah I mean but to be honest thee ownership model has only been around for like like a few decades. Like it isn't actually that long like we used a lot of people used to rent their televisions, they used to rent their homes, they used to rent their cars. If they could afford to rent a car in that kind of environment. But we moved away from that because it was like it was undesirable but actually it was undesirable probably to do with marketing and the way that business marketed it. Whereas if we go towards marketing this like really ooh how long do you have that? I've had this 15 years. You've had that for 15 years! Wow that's amazing. I wish I had that for 15 years whatever it might be. And and I think we are we can get there cuz then this is like pride in this durability of pri of products. And then you can if you've hired it for X amount of time and then you keep hiring it time and time and time again. Like there's pride in that and I think people enjoy that rather than just owning it.

Bex-Rae Evans: I like to think that we would get there but I guess my worry about the power thing and the only real example I'm thinking of is is houses. But I think with any rental agreement like or if you paying something off in installments. Eventually you you have that and your installments stop. And there's a financial stability there where like so so. Certainly with a house I think a lot of people get a mortgage because they're like oh that'll be my pension. I'll eventually pay it off and I won't have to pay monthly rent anymore. I won't have to pay that. So there's like that becomes you know a time in your life where you're not paying these things but if you're never owned in it, are you always just gonna be paying? How is how is that gonna how's that gonna work? What if you suddenly lose your job and you've got seven rental things on the go how how is that gonna work?

Tom Passmore: Well again it's it's it's an it like it's a growing kind of concept of the of an economy. And it's not all always purely about the as a service models. There are other models out there within the Circular Economy that doesn't purely revolve around the as a service. It seems to fit better for the kind of the waste argument that I've kind of brought to the table. But yeah there has to be some controls over it, some protection towards people. Because like you said in my experience of the rental market within housing there like yeah there is a power dynamic there that's just a bit skewed. But this is where economies come in, they work together, they get people involved and they go from there. And I think by there will be a period of time to work through these things but we will get there. So one of the things I'm really interested in is well to kind of about these these kind of ownership models and thinking about all those different financial interactions is I was talking to Ken about the ideas of of cars. So there's this thing in the Circular Economy Transport-As-A-Service. Where in the future you will not own a car. You will have access to transport as a service. So you like like the Uber is of today kind of thing but it all you will access that and then you the person that drives you around will hire that car. And that car might be owned by say Jaguar Land Rover or Volkswagen Group or Tesla and then from there actually they don't own the materials in their car. What they own is the design of that car and getting it out into people's hands. But Michelin they own the tyres. We talked about that already. The battery companies will own the batteries of these electric cars and then you've got the aluminium companies as well owning.

Bex-Rae Evans: But batteries are made of a bunch of stuff because so does that mean that the battery company doesn't own the battery? And does it lead to like a weird chain of rental?

Tom Passmore: Chain of rental? Like maybe I don't know. I don't know but this this is that like again just playing with concepts and this is what really exciting about it that's moving away from that linear concept which is like take, make, dispose of. To actually, let's play with these financial models so yeah I was talking to Ken about this and he goes into some weird and wacky places.

Ken Webster: So what are you gonna get then? You're gonna go to split economy where assets become new, sorry materials become new asset classes. That are worth trading in in futures. You know like let's see that I'm the supervisor board of The Madaster Foundation in Amsterdam. They look at materials passports. And one of their concerns is if you get all of the information about buildings and what's in it in terms of material. People start writing financial futures contracts about how much material will be available in ten years of different types. Which is interesting because then it becomes a financialised interest rather than just environmental interest which has its downside as well as its underside. And we know very well that if durables become new asset classes because we can track them. It exacerbates the problem of dealing with low-grade stuff because people will realize the business advantage in all of the things that are worth keeping and I've got valuable will just keep them cycling. But it pushes even more pressure on redesigning the products, the materials that are not going to make it into that and lots of them are not going to make it into that. Also even if you look at aluminium to be technical all of aluminium is an alloy. Every aluminium is alloy. So there's always got something in it. But if you if you are looking for a specialised use for aluminium you have to know what's in it. Like in aircraft frames. You can't take recycled aluminium and put it in your aircrafts. You can in World War Two. Well, in fact no, remember there was a big campaign in World War Two, put your aluminum pans. They didn't make aircraft of it because they already knew we not quite sure what's in this. It went to make something that was lower grade. Still useful aluminium but you've got that problem then for high quality uses you have to keep making new aluminium. Because you can't deal with the different alloys you've got securely at the moment. So you can't close the loop because it has to be cast alloy in the second use. It can't be wrought aluminium I think that's the difference. 

Tom Passmore: So yeah I mean, and I think Ken which is on some really interesting points there that. It's really like it can start off and you can kind of get these concepts really nice in your head the idea of No Zero Burden in the circular economy and kinds of the the As-A-Service models so. But then actually quite quickly you start interacting with other concepts that are much more difficult to understand. So one of the things I always get like confused in my head that the as a service model isn't just a subscription model like it's also like like it's an on demand model. So you wouldn't be paying for transport as a service every month. £50 a month. You would just pay for it, when you need it. So I'm like trying to.

Bex-Rae Evans: So that that's less like having a hire what you call a lease scheme car.

Tom Passmore: Yes.

Bex-Rae Evans: And it's more like those car schemes in city centres where you're going swipe a card and get a car for an hour.

Tom Passmore: Yes exactly exactly and I think sometimes when when I personally talk about the Circular Economy I get this idea of as a service is just a subscription model but it isn't. Like let's talk about washing machines for example with that. Washing machines rather than paying every month you just pay per cycle of wash. So in your home if it's just you then you will use it left less often than and then I am in a family of six. Like so you'll just pay for it. So then you can kind of control that budget a little bit more as well if things do go wrong. Just not wash your clothes for a bit. But I'm not saying that that's a solution but it's trying to make sure that you don't fall in that trap of constantly having to pay out for a service that you're not getting value from. But yeah like it's just it's tricky like and I think when I started off on this journey reading and interacting with the Circular Economy I think I've got it and then I had this idea about the no zero burden and I was just like okay that's fantastic. Like where does the waste industry fit in? And but actually again I was compartmentalising it and it was like what I Amir said at the start of the episode is this. Like you have to think as a system as a whole. And then you can start going actually there will be no death like of there won't be an industry that just disappears because it isn't like part of it it will just fit in with everything else.

Bex-Rae Evans: But so how do we make this happen? We talk about systems thinking, about how this links to loads of other things that we haven't even considered yet. Do we, do we just plan it? Do we, do we plan the system? Do we model it in advance and then work towards it in little steps? Or do we plan it in advance and say like we're implementing it tomorrow everyone just needs to stop doing what they're doing now and here's your new job role? Like how do we get there?

Tom Passmore: I think Amir from the University of Bradford says it really well.

Professor Amir Sharif: This is the idea of morphic resonance which Rupert Sheldrake came up with in the late 90s late sorry early 90s late 1980s. Which was that natural systems inherit patterns of behaviour from within themselves. And I think the thing about the Circular Economy is is that the more and more companies and individuals start to adopt maybe all but certainly some of the practices of a circular economy. The more companies and individuals will then accept what it is and then we'll get this resonance effects. Where where more companies and more people will see the benefits of using a circular approach. So that it does become a natural what they call a natural memory. Right now, our natural memory in our economic macroeconomic society is produce more and more stuff, and make more and more money. How about, how about a different economic approach which is. Okay you may want to produce more and more stuff but how about producing more and more value by extracting value and increasing the life of that asset. Wouldn't that be great. And it's just a different approach and that's the sort of thing that we're trying to shift thinking on and you know try and try and inform people, teach them and research in that in that mold. And that's what the circular economy really is about.

Bex-Rae Evans: So basically we have to make it cool and then cuz it's cool everyone will want to do it is that what we're saying?

Tom Passmore: I think it's a bit more nuanced than that. I think it's if like some people will start to do it and because they do it people will get used to the idea of doing it and then they'll just it will just fit. It will just work that's that that would be the way and then everyone just works towards that. So we have the example of people doing it now. You've got Michelin and you've got AO.com they're doing it and I think more people will just start engaging in it and then we'll be there.

Bex-Rae Evans: Sounds easy.

Tom Passmore: Yes no no it's gonna take time. It's gonna take a lot of effort. It's going to be a lot of stuff.

Bex-Rae Evans: How long? How long do you think it's gonna take?

Tom Passmore: I don't, I don't well it's already started and.

Bex-Rae Evans: Three years?

Tom Passmore: Well it's one of those things I think it'll just be there. Like one day you'll be like oh we used to do things so differently but like.

Bex-Rae Evans: Really just so do you think like in years time my grandkids will be like it's just a part of their day-to-day and I'll like bring out this podcast and be like yeah we didn't used to have it like this in my day and they'll listen to it and be like hahaha you were so primitive.

Tom Passmore: Yeah yeah I think and it's just like it's it's marginal gains. It's about it's about becoming more and more effective and it's about one day we'll just look back and be like oh look at how far we've come and it's just a matter of time. It's exciting.

Bex-Rae Evans: I can't wait for the day where we're all laughing at how stupid we were because of this podcast. We're gonna play it in like 30 years time.

Tom Passmore: Yeah, maybe that might happen. But let's be positive. Let's not laugh at ourselves now but let's think about the journey that we're gonna go on.

Bex-Rae Evans: Okay that was a bit weirdly positive from you Tom.

Tom Passmore: I'm always positive when it comes to the Circular Economy.

Bex-Rae Evans: Thinking back over these conversations and interviews. I feel encouraged and a little inspired. I still have my doubts. Not doubts in the merit or intention of the circular economy or in people like Tom, Ken, Amanda, Anthony and Amir who are championing it. My doubts are in the rest of us. Tom said way back in Episode One that people are the problem. This is so often been the case throughout history. But we managed to get out the cave and cross oceans and mountains and build industry. We created poetry and music and have improved ourselves time and time again. The Circular Economy is a big change but as a species we need to change and we need to be open to it. Massive corporations need to be on board and not look to exploit their customers but build a better world for everyone and it seems like they can do this and still make their profits. Hopefully one day our grandkids will be able to look back on our linear economy and laugh at how primitive we were. That the Circular Economy will eventually just be the economy. I'm looking forward to finding out. Thanks for listening.

Bex-Rae Evans: This podcast wouldn't exist without Tom Passmore and Sophie Walker from Dsposal. Music has been graciously provided by George Fell. Podcast.co make all of this possible thanks to the shiny podcast studio they provide. Thanks to the Disruptive Innovation Festival. I've been and will continue to be Rebecca Rae-Evans. Thanks also to Paul Jakubowski and Johnny Rae-Evans from the Tech For Good Live Team.


Category: Circular Economy

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