In this first episode in Season Two, we have a look at the wing of the Circular Economy we missed in Season One, the bio-cycle, and we start digging into economics – both circular and linear - and ask questions like...
Bex-Rae Evans - Founder at We Are Reply
Tom Passmore - CEO and Co-Founder at Dsposal
Ken Webster - University of Exeter
Marc Zornes - Founder at Winnow
Iain Gulland - Chief Executive at Zero Waste Scotland
James Close - Head of the low-carbon Circular Economy at LWARB
Gaëlle Guillaume - Senior Engineer at Jaguar Land Rover
Andy Doran - Senior Manager, Sustainability & Recycling Development at Novelis Europe
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: We're still on a crash course to the end of the world and season one of our Circular Economy podcast didn't fix it. So here we are with the Tech for Good Live Circular Economy podcast Season 2. Will we still be recording this when the tidal waves hit? How many seasons in will we be then? 234, or maybe just 10? Who knows?
Bex-Rae Evans: I'm Bex and Tom Passmore from Dsposal is here and this time we're focusing more on the economy part which is great because everyone likes money and that's what the economy is about right?
Tom Passmore: Erm!?
Bex-Rae Evans: This podcast is a three-part series called Tech for Good live and the Circular Economy season 2 which strangely enough is a follow on from Tech for Good Live and the Circular Economy season 1 which you should go and listen to. We'll be delving further into the depths of the alternative to a traditional linear economy and we'll be finding out whether it could save us all or if we're still doomed!
Bex-Rae Evans: So, we're doing another season about the Circular Economy. Why is this relevant to a start-up in the waste industry if you could remind everyone?
Tom Passmore: Oh, good question, so at Dsposal we have a vision where there's a world where waste is treated like a valuable resource. So being a tech company we build software and digital tools to help people do the right thing with their waste. Trying to make the whole thing easier and more transparent. The Circular Economy is very much about seeing all waste as resources so that's why we're here.
Bex-Rae Evans: So, this is season 2.
Tom Passmore: Yeah so, I've been spending the last what 9, 10 months talking to people about the Circular Economy because we didn't cover everything in the first series.
Bex-Rae Evans: Which is natural.
Tom Passmore: Yes, it's a big topic. We only had an hour and a half to cover across our three episodes so yeah we didn't hit everything.
Bex-Rae Evans: What sorts of things did we miss that we're gonna talk about in the next three episodes?
Tom Passmore: So the first thing we kind of missed was this idea of the bio cycle so we talked a lot about the technical cycle but we never really touched on the bio cycle. Which is another part of the butterfly diagram we talked about in the first series and we didn't at all talk about economy.
Bex-Rae Evans: We just talked about the nice circularity of it all.
Tom Passmore: Yeah so we need to have a chat about economics which ... Oh ... fun
Bex-Rae Evans: Well I'm excited.
Tom Passmore: Me too.
Bex-Rae Evans: Would you recommend that people can just start here or do they need to go back and listen to the first season?
Tom Passmore: You definitely, definitely, definitely need to listen to the first series. You just cannot, you you'll get lost really quickly because there's just jargon so here's an example.
Ken Webster: Well Harari you know the Yuval Noah Harari the great social commentator and writer you know he wrote Sapiens and Homo Deus and things like that. He says that society moves forward on a story, a narrative about the future, about how things will be better and if you like we've had a couple of these stories. And we're trying to write the new one and it will probably let us just has to be positive for the minute it will have something to do with circularity in it. It will have something to do with taking insights from living systems. It'll have something to do with being effective not just efficient. And it would be to do with setting the rules of the game which enable, as feedback runs through the system, things to improve. But we don't know quite what that story is we just know that it's out there to be discussed and created.
Tom Passmore: So that kind of highlights just there's a lot of jargon that went into what Ken was saying there so that was guy called Ken Webster. I'll let him introduce himself.
Ken Webster: Yeah, my name is Ken Webster I've been involved in the Circular Economy for about 10 years now. I'm working at the University of Exeter principally, but I'm involved in universities in Sweden and elsewhere. My specialism I suppose is is economics and the Circular Economy.
Tom Passmore: So yeah it felt like the right person to talk to about economics.
Bex-Rae Evans: And we talked to him last time as well didn't we in the previous series?
Tom Passmore: We did, we did, we did talk to Ken in the first series so it's kind of that link. Everyone else is new apart from Ken and us too obviously. But yeah before we get into the economics I think we need to touch on that bio cycle stuff. So if you remember from the first series we talked about the left and the right wing of the Ellen MacArthur butterfly diagram so bio cycle is that left wing so it's all to do about nutrient flows around food and about resources in that respect so I'll pass you over to a guy called Mark.
Marc Zornes: I'm Marc Zornes one of the founders of Winnow. I've been in the food business my entire life worked for a big food wholesaler in the U.S. Got involved into sustainability by working for the US Green Building Council after that and really kind of got inspired to do work in sustainability by the work that McKinsey and company was doing. So then sort of set up set my mind to go work for McKinsey and join their London office which was one of the offices where a number of people who were doing work and sustainability were based. Worked from there for about three and a half years. Working in a combination of their businesses that touched food as well as in their sustainability practice and the McKinsey Global Institute. And it was from the work that I was doing at the McKinsey Global Institute that was really an inspiration for founding Winnow.
Tom Passmore: Yeah so Marc was this a really interesting guy from this company called Willow. So one of the problems we had in the first series to talk about the bio cycle is that there's not it's really hard to find people on that side of the wing cause it's it's a very kind of niche area because it's all about food, it's all about resources, it's all about looping through and getting natural kind of nutrients out of it. So yeah this is this is what Winnow do.
Marc Zornes: So Winnow is a technology company that provides tools for kitchens to be able to understand and then prevent food waste. The basic problem that we find is that kitchens throw away up to 20% of what they buy with a large majority of that actually happening before it even gets onto a customer's plate. And so Winnow is a technology to first of all measure what's being wasted we provide a technology that uses artificial intelligence to capture photos of what it is it's being thrown away called Winnow Vision. We then weigh that food and put costs data on that. We then take those analytics and feed it back into the culinary teams and that data tends to drive a pretty significant reduction in food waste, on average we can cut food waste by about 50% by value. And the result of that is our customers save anywhere between three percent to eight percent of what they spend on food. While doing the right thing and making their kitchen more environmentally friendly at the same time by reducing wastage.
Bex-Rae Evans: That's amazing I love what Winnow are doing, like all of the big technologies got AI in there actually doing some good for a change and data analytics brilliant.
Tom Passmore: Yeah, yeah that ticks a lot of boxes for me, like, they're really they seem to have found a problem that that Marc knows exists, that problem exists and has gone - right how do we solve it and what what tools are out there to be able to solve this problem like. It's not something I've ever been aware of. I've always assumed that actually restaurants would be really kind of savvy with their food because that is their bottom line. If they're throwing away then means they're not getting any profit from it therefore from what Marc was saying that's just not the case. I had to ask Marc actually how they do fit into the Circular Economy because I don't think it's instantly obvious.
Marc Zornes: First of all let's recognize that sort of one of the biggest challenges that exists around waste is that there's very poor data on exactly what is wasted. Why it happens. Where it occurs. And like most problems if you're really gonna make a meaningful impact on it you've got to really understand the problem well. And food waste is no there's no exception to that. You know there's there's data that says that about a third of all food is wasted from farm to fork. You know a good portion of that will happen in sort of consumer facing businesses which would be restaurants and what Winnow does is we provide the data platform to understand why that waste is happening. As well as the analytic tools to understand what can be done to make use of food that otherwise would have been wasted by perhaps repurposing it in the kitchen or just actually optimizing production so that waste doesn't happen in the first place to be able to prevent that. Beyond that what we do is when there is leftover food you know we do have partnerships with food banks for example in Australia we work with OzHarvest and there's a real win-win where we will go into a kitchen, minimize the amount of food that's being thrown away. Nut there's still gonna be some food that's being wasted and any of that that is still fit for human consumption can then be donated. To go to people who are in need kind of the way to think about food waste is to first think about preventing food waste, then think about having ensuring that that food basically is feeding people, if not feeding animals, and only then really thinking about recycling it. And Winnow is really working kind of at that top tier of creating the Circular Economy sort of you know avoiding the waste by design in the first place and then ensuring that if the waste or sort of the food is produced in excess of demand that there are outlets of that that are consumption as opposed of disposal.
Bex-Rae Evans: They have thought about everything.
Tom Passmore: Yeah well it seems like it. I mean they've been around for a few years but know that essentially making a lot of really good progress, they seem to be like connecting a lot of dots and seem to be helping a lot of by organizations really understand what how they kind of contribute to this problem of food waste. Which again I don't think is like you see a little bit food going in the bin and you can’t figure out how much that is over like a week, a month, a year but no it soon mounts up.
Bex-Rae Evans: Yeah it's interesting as well how they brought food banks into the mix. Because something I would worry about is with working with food banks and other organizations that take in that kind of waste food often, and that's been that seems to have been talked about a lot lately. You see supermarkets donating stuff to food banks more than you used to. Where everyone would just say oh they chucked it away you know now they take then to food banks. Which is a great thing, but if you're actually reducing the amount of waste does that mean there's a reduction in the amount of things going to a food bank? But maybe not if if actually more people are taking things to food banks?
Tom Passmore: Yeah and I think I think this is what Marc was saying when I was talking to him like actually like if you if you are thinking if you are really engaging with this problem around food waste and you keep cascading it up to like. Don't throw it away, make sure it gets into like an animal's stomach, or better than that is getting it into a human stomach. Better than that is to actually not not oversupply because one of the and this is an amazing stat that mark brought up that I've never heard before but it's just it is absolutely insane.
Marc Zornes: And it’s been sort of validated by a number of people which is about a trillion dollars a year of food that's thrown away. In fact the latest estimates from the Boston Consulting Group suggest that it's about 1.2 trillion growing to 1.5 trillion dollars a year by 2030. And there's not really a lot of investment going and thinking about how you prevent that waste from occurring. It just screams that there's a big opportunity to do something there, and it was pretty much a a conclusion that I had that dealing with food waste was gonna have to be almost an industry of its own and was going to drive a lot of innovation. And had the opportunity to be in a position to have some foresight that that would occur. Quit McKinsey and decided to build a business that was solving the problem.
Tom Passmore: A trillion dollars. A trillion.
Bex-Rae Evans: That's a lot
Tom Passmore: I it's one of those numbers like I can't imagine actually like it's like when you talk about billionaires like ohh they've got loads of money like how much bigger is it a trillion than a billion? I don't know like huge amount of food waste. Of waste. Around the world there's people starving and we're just throwing away food at that massive rate. A year!
Bex-Rae Evans: And what I find fascinating about that is that's costing someone money. So why are they wasting, why are they wasting money? I like that the solution that Winnow has come up with is is gonna save people money as well, so will make people use it more.
Tom Passmore: Yeah
Bex-Rae Evans: I hope
Tom Passmore: No no definitely and I think that's where it comes in with this idea of the Circular Economy. Like it it's about it's not just about making flows easier or leaky loops or whatever. It's actually it comes down to that whole idea of about about money because then that does enact change. Because if people can get more money back, they have more money in their back pocket. Then that's really good because I was saying to Marc as well like like this is fantastic like I love the fact what we know we've been doing like when are you going to be moving into a household because householders like produce so much more food waste than the hospitality industry.
Marc Zornes: I would first you know challenge the assumption that households make a lot more waste than hospitality. In certain markets that that may be the case. There there was interesting study coming out of the US by a group called ReFED that highlighted the share of food waste that occurred across the United States. And they said that about 15% of all food waste that happened in the United States came from farms. About 5% was lost somewhere in distribution in the supply chain. And about 40% came from consumer facing businesses. Which is basically hospitality and supermarkets. And then another 40% came from households so we do see consumer facing businesses as a real opportunity in sort of dealing with food waste. The reason we like big businesses that are having food waste issues that we can help them solve is. You know arguably there's more money to be saved per location than say your average households. And that makes as we are still a relatively early stage technology business, it makes it easier for us to get the economics to stack up and really create a compelling business case. The homes issue is is a really interesting one. We have put Winnow into homes on a sort of short try with Sainsbury's and we demonstrated that when Winnow was put into homes we actually cut food waste by about 70 seven zero percent by by value. And we really do see an opportunity there but but today Winnow is is really is really squarely focused on solving the issue and in in the hospitality and sort of consumer facing business world. You know mostly because it's where we have a long track record of success. It is where we have a sort of broad set of clients that we are optimizing our product to service for. And we're looking at sort of other opportunities in the supply chain you know down the road.
Tom Passmore: I'm always speechless about that kind of like so we're wasting like a trillion dollars a year of food more and then Winnow a technology solution can improve that.
Bex-Rae Evans: I would love to see that in action people love data right?
Tom Passmore: Well yeah definitely being able to like access that and see that and be like oh I need to like how much money would you save if you're reducing that amount of food waste. So we were talking about this for a while and it was it was one of the questions I asked quite frequently in the first series about this idea of if the Circular Economy comes into its own, what happens to the waste industry? Right you're talking about like trillion, trillion dollars worth of food annually being wasted that means there's a lot of value going to the waste industry but they're just gonna miss out on if Winnow really disrupts that market so even though that was more of last series stuff I've really had to ask him that question.
Marc Zornes: I mean you know industries when you go through any sort of disruption kind of need to rethink you know the economic model. Our perspective is that you know just to give you kind of a sort of simple mental exercise. Take a bin, a 240 litre bin probably costs five to ten pounds to get that bin taken away it probably costs one to two hundred pounds to fill that bin with food. And so what should you really be focusing on providing the service for. Obviously you need that food taken away if you are going to dispose of it because you have hygiene issues and you want that to be efficient. But you know the the opportunity of preventing that food from occurring in the first place is 10x that of what's currently being captured solely by just collecting that food and sort of putting it elsewhere. And so you know I think that the the industry is gonna need more data, to better understand what's being wasted. That data is then gonna need to go into feed into what I would say is both sort of industrial strategy. How businesses look at what they're wasting and how they can prevent things from being wasted or find ways to design it out in the first place, and that's the Circular Economy thinking. But I think also policy right I mean um you know landfills are filling up China doesn't want anyone's plastic anymore and neither do any other countries and so I think we're gonna have to start reversing what has been a a steady course of just allowing waste to be this sort of unseen problem that grows as our economy grows and be be more efficient from from you know design out. And we think that the data that we can provide into that is a key enabler to make that happen.
Bex-Rae Evans: I know we were bound to talk about money in this episode a lot because it was gonna focus more on economics and we did point this out in the previous season as well. But isn't it horrible that we have to make a business case for this sort of stuff anyway just gonna say it just so it's said.
Tom Passmore: Yeah I agree I mean it's like it's one of the things I've been thinking about a lot recently. It's like when you're talking about these amounts of money that are sloshing around the system and you talked about like the billionaires that are out there. Like the amount of money that we have as a planet like actually why the hell do we need to make any more? Like as in that haven't we got to a point where actually we can level that playing field so they're actually money isn't that barrier that it once was. Like oh I want to do this but I haven't got the money to do it therefore it won't get done and even though it's brilliant, brilliant things might not make money. But they still should exist and I think that we've lost that and it's it's I think it's really sad. I think it's really sad that it's just like yeah it's all like everything's coming back to money money, money, money, money. Even though we're in this climate emergency and it's just like oh yeah but is it going to make money? Ah oh yeah yeah that's a good point! Is it better to have a climate or have money? Oh I don’t know. You know there is a balance there. No! Sorry had a bit of a rant.
Bex-Rae Evans: But it's it's worth getting out there. On the flip side though we do need to consider money so I think Winnow has doing a really good job there, to incorporate the costings of things into everything and it it does make economical sense. It's not just there for the warm fuzzies that I would like it to be there for.
Tom Passmore: No, no true, and like the other thing that I think Winnow is kind of bringing to the table which is really really interesting is this these data insights. So they're collecting this data from like kind of all the way around the world, being able to like slice and dice it in different ways and then like they are anonymizing that and releasing it to organisations that would benefit from it. And like like Marc was saying there it's a kind of around policy so we talked about that for a bit as well
Marc Zornes: Um if you kind of think about winnow, it's a tool to add a really granular level, understand exactly what's being wasted and then it's a set of tools on top of that data of understanding what's being wasted that can be used to minimize that waste. Today it's food and you know we care about it because the food systems very near and dear to our heart. But there's no reason why I couldn't have other applications as well. We're having conversations with a bunch of people in the industry who are excited about what we do. I think you know the way that we way that we interact with groups like WRAP also groups that are really promoting the issue of food waste like the World Resources Institute is, we help to anonymously provide some data around sort of what's being wasted and why, and that helps to lead better information and insight for the industry to understand both the scope of the opportunity but also over the potential. When you talk about companies that are involved in in waste collection I think there is a an appetite for those companies to better understand sort of you know why things are being wasted as opposed to just being responsible for picking that up and disposing of it. And so there's a real value out there that's that that's clear. You know we are we we want to have a broad dialogue with the industry because fundamentally we want to transform this issue of food waste and we have no belief that we're gonna do it alone. We're gonna have to do it as a group of players, really trying to make wholesale change.
Tom Passmore: Winnow are doing some really interesting stuff and I think they're leading in that field and then with that data analytics that they're able to apply, they're able to help those different things we mentioned their WRAP so WRAP are the Waste and Resources Action Program like they are a uk-based charity that works with businesses and individuals communities and that her kind of achieved the circle economy and really looking at waste as part of that. Like it was really interesting to talk to mark like I think he did they are doing some really fascinating things and I just I love wasting I love data so I kind of like was a perfect person to talk to because again I don't know anything about that side of the the nutrient cycle on that side of the bio cycle so it was just like 45 minutes of learning with Marc. Which was brilliant.
Bex-Rae Evans: I think it would be interesting to see what we can learn from them from the perspective of they're clearly going to be a profitable business, with the ability to sell listen to the restaurant industry and whoever else they're gonna sell it into, so they're gonna operate as a commercial business but clearly the whole point of what they're doing is is the social good implications around that. So they are nice people right we'd assume.
Tom Passmore: yeah
Bex-Rae Evans: And doing stuff around collaboration all of the other organizations that they mentioned there they are sharing information with them. So I think collaboration is is really nice to see, in this industry especially when everyone's trying to make money out of it as well.
Tom Passmore: Yeah and and I think that is such that is a key component of the Circular Economy is these kind of collaborations because you don't know everything and you don't have access to everyone else's suppliers like. You just have to work with them you have to create partnerships, you have to create collaborations to access these things, and I think being able to do that like so last series we looked at the technical cycle and then this like we've just had a look at the bio cycle like. It's just that okay that's really neat, that's really cool I get it now I can I can view that I can understand how those businesses looking at these things but then I think now we have to get into that wonderful world of economics. So yeah, so I know nothing about economics.
Bex-Rae Evans: Snap
Tom Passmore: So I went and talked to Ken. So I introduced Ken earlier. He likes to talk in metaphors and frameworks because the Circular Economy is a framework like the economy. Let's just dive in with Ken.
Ken Webster: Well all right all frameworks relate to metaphor that's what George Lakoff tells us. We understand abstract thinking by using metaphors. And in the era of machines and clockwork and determinism we thought of ours the world worked like a clockwork like some sort of machine that with its parts and everything was determined and hierarchical and those inputs and outputs and there was a rigidity to it. Now we're beginning to go back to the idea, well no actually it's not a plumbing pipe work as it used to be thought of in the economy there are literally there was a model I think in one of the universities in London of the economy as a central heating system. You know with valves and pipes and all the rest of it. We're beginning to see it much more as a an ecological system or one where there's a you've got biology. Biology and how an organism fits its ecology. It's about fitting and it's about things like evolution and continual iteration and feedback and it's not fixed and they're not winners and losers. It's whether the whole thing works you know. As Nick Hanauer says “we're all better off, when we're all better off” and it is part of that shift of how you see the world work and that's why there's such a tension between quite a number of economists you still have this idea everything is in long run equilibrium. It's a sort of machine analogy. And though it is a complex adaptive system and it's much more subtle much more dynamic. And that's part of that characterization it's now for some people they just go the Circular Economy it's nice toolkit, I can do something with these materials have a nice day. That's fair enough go and do it. But my view has always been for nearly all of the years I worked in it that no no the powerful thing is that thinking behind it. Which is it's a shift we're looking at systems.
Tom Passmore: So something really interesting. So do you remember when we did the Blue Dot Festival and Harry talked to someone about that like automatons and that's how we think how the brain worked. I love the fact that we're moving toward this idea of like our like we had complete dominion over everything so we created clockwork machines therefore this is how brains must work or this is how the economics of a society must work. Then as we've gone on done some more research that didn't fit anymore so we're like oh it must be more link this instead. And now we're getting to the point where it's just like we don't really understand it's a living system in its own right and it has these different like in it flows and it has these different like like yeah it grows and changes and we don't actually control it in any way. And let's just I love that idea and I love the fact that when I was talking to Ken about this I was just thinking oh Harry talked to that guy at Blue Dot that's amazing. Yeah like economics is mind-blowing like I don't get it a still down even after like months are talking to people about it it's completely this manufactured thing we've created it and we're like yeah release it oh you know market forces and balance and equilibrium and free market and stuff like that it's just like oh no we made all this up.
Bex-Rae Evans: yeah and I feel like sometimes people talk about it though in that way like you don't know about this so don't worry about it we'll sort it out you can't change it it's just is what it is and because it is so complicated you you agree so that you're like okay yes you're the boss. And it I guess I'm from a search engine optimization background. Sorry. Very long time ago but that was seen as that sort of thing where don't like it's shrouded in mystery like don't worry about it we'll sort it out you don't need to think about it it's just magic. We're all gurus and magicians and ninjas so. And I feel like economics is a bit like that. You don't understand about it, so don't worry about it, and is that true? Can it be changed?
Tom Passmore: Yeah I mean so this is this is what I think Ken really tries to do with his metaphor so he has a really really nice metaphor of of how economics should flow and in this idea of living systems so I get Ken to explain that to you.
Ken Webster: What's behind the Circular Economy is a way of thinking about its new from it’s not new but it's a framework for thinking. Which is orientated towards the world not as a machine, but the world as if you'd like it draws ideas from biology and ecology. It's it's about maintaining capital stocks and those are not just machines and whatever that includes human capital, the physical capital, you know the, the forests, the fisheries, all the rest of it. It's maintaining capital and getting meaningful flows from that and people are satisfied with that because the world dunst, they think the world works in a quite a circular way anyway. Of course it does. But it reaches this is the analogy with the living systems it reaches the periphery. It's not about in the bloodstream terms, the arteries and the veins and the heart. That's one bit, that's what people have got a I think annoyed about is that they're not talking about the rest of it. The periphery there's more capillaries and kilometres and kilometers of capillaries in human bodies and the blood system as a whole, like the economy as a hole, has to reach the periphery or bad things happen. And that's I think quite comforting it's about effective systems not just efficient ones. We've been sold this story of the economy is an efficient machine and that if you didn't fit the efficient machine you were, you were a loser. But if if the economy is more like a healthy body where money in this case is blood, you know blood and money if that, reaches the periphery and enables all of it to thrive, what's not to like? That is a much more satisfactory way of approaching it in my view and it starts with a changed metaphor because we're all struggling at the moment to think what is the new economic story and I think the Circular Economy’s main benefit is very practical as well but main one of it is they encourage the thinking to be more frankly circular. And you know that's entirely back to people like Adam Smith I may have mentioned Adam Smith talked about the great circulation for him the idea was to get the landlord out of the mix, it's just the same as today the problem is unearned income all of the people who own large asset classes are not improving the overall effectiveness of that system. They're more extractive and it's almost like we're revisiting not only Adam Smith but the Guilded Age in America at the late end of the 19th century where there was also extreme inequality and what needed to happen is that circulation has to work better in the money flows and with the materials and particularly now with the climate emergency looking at energy cascades how that works in the system. So it's at the beginning for me of a different way of thinking about the economy and the economy as information materials and energy not just one bit so it's time to have some put some big trousers on and look at the big picture. And that is what I think people need to do rather than worry too much about the little details. I think you mentioned one time about say particular flows like aluminium or whatever. That's interesting but the more important thing is the framework for the thinking behind what you do with a particular product, component or material.
Tom Passmore: So Ken's really kind of coming into this idea of economics and it's like I like the living system analogy like the body analogy like blood flows through the system it goes through all the different organs has to go through the capillaries. So you know standard people probably, gets the peripheries they keep it fed watered provided with oxygen everything it needs and then go back to get replenished. I like that idea.
Bex-Rae Evans: I like the idea that it’s all important.
Tom Passmore: yeah
Bex-Rae Evans: All the way down to the tiniest littlest capillary.
Tom Passmore: Yeah that the tiniest cell on the smaller on your small toe is like miles away from like your brain and your heart and your lungs but you know what if that starts dying, you've got necrosis of your toe, necrosis of your foot, of your ankle, of your calve, of your knee. All the way up and actually before long you're in trouble, you're in a lot of trouble very very very quickly without intervention. Like I said before I don't, I don't know anything about the economics. So a quick question for your Bex.
Bex-Rae Evans: Yes?
Tom Passmore: What do the banks do?
Bex-Rae Evans: What the banks do? what the banks do? Like take people's money and then give it to other people. Yeah?
Tom Passmore: I mean so I like yeah I always thought banks take in money, they save it, they do some magic with it. They give it to other people, they get interest off it and away we go.
Ken Webster: Oh dear in your own head you know you you think well no that's not what they do. They create money out of nothing effectively. They create assets and liabilities at the same time and it's based on their belief of whether you can pay it back or whether you've got collateral. Nothing about swapping it from savers accounts to you. So when you've got that level of general misunderstanding about how the economy works, it's very hard to get to a sensible discussion, in a reasonable time and that's why I usually just focus on the question: where is money created and what is it created for?
Tom Passmore: So yeah I don’t know what banks do. I'm like 34 I think I feel like I've used banks for like what the last and I can't do the math that's how bad I am with money I can't do math quickly in my head urh 15 years let's say, definitely longer than that! And I just don't know what they do and like this idea of unearned wealth. Just this new concept to me kind of talking to Ken about it it's a idea of you go to bed you wake up and you're richer. You've done nothing all you’ve done is sleep. Like why should you become richer? Yeah I don't know and it was bonkers really bonkers Kinda are like thinking about it in this different way because then it is just like our like just start layering that on top of a living system and idea of the body and the body didn't do anything like that but I've already doesn't like doesn't just acquire assets constantly that's a failing somewhere surely in our in in the system of economics. So yeah it was quite interesting talking to Ken about it.
Bex Rae-Evans: I love Ken. I loved earlier he said just put your big pants on start thinking about the entire system.
Tom Passmore: yeah yeah but it's hard to do and and I fell into this exact same trap like again when we were talking like I was just like I feels exactly what people do with the Circular Economy like they in exactly what we did in the first series we talked about material flows, recycling it's not just recycling on steroids, it's a little bit more than that we never actually properly engage. And like actually just talking about loops and flows and nutrients and stuff like that. I asked Ken if if that was a problem.
Ken Webster: I think one of the just the big dangers of just sticking with that is that, if we are talking about an economy with a big capital E it's Kenneth Boulding says it involves knowledge, we need information, materials and energy. And just trying to talk about the materials and energy and ignoring the the key role of knowledge and information, and money as a form of information, seems pretty strange. And you can even do it to the level of one of these very simple diagrams about the economy, you see the butterfly diagram in a sense. The assumption is there's a household on one side, to provide labour and buy the products. And there’s businesses on the other side that employ labour and create profits and make the stuff. That's an economy of barter really with a layer of money on it so, it's an exchange economy about real things. Now we happily talk about that and ignore well the two big other elements in this as Michael Hudson says which is the financial economy sitting there the fire insurance and real estate element of it, and of course who owns the resources, the land, the commons you know. The forests, the fisheries and all the rest of it. It's almost as though we were just talking about the economy in an exchange in materials and energy most of the time. And that's not that's not useful if you try to say how can a Circular Economy help improve overall well-being?
Bex-Rae Evans: I like that he brought in wellbeing into the mix.
Tom Passmore: Yeah again I think it's a core component of the Circular Economy like is to make sure that people are looked after, people are cared for, and like it's about wellness. It's about making sure that everybody that's in the system is cared for and looked after. And I think that just doesn't really happen unfortunately in the current economy that we've got. I mean the peripheries are just left to rot and die in a dark sense of the word but ya know unfortunately I think that does happen and like well-being is so key and so important to well our well-being. Like and I just I think we're missing out at the moment with with the way our economy works. How you do have these people that just end up with vast, vast, vast amounts of money to be able to do whatever they want with and then you've got other people just basically thrown to the curb. You see it walking on Manchester all the time like people that are like in crisis and living on the streets and it's just like, why are there billionaires? Like like why are there people that go to sleep at night and create more wealth and then you've got other people who go to sleep at night and all they're going to do is get wet and cold and then they wake up and rinse and repeat. The core component around well-being is not there at the moment and it's not fair, and I know that sounds like a really childish thing to say. “It's not fair” but it just isn't. There's no spin on it. So yeah I mean I think this is why people don't talk about economics. Because you get into these conversations
Bex Rae-Evans: But the way that Ken is talking about economics so far, he's changing the way that it's being talked about with this system that's like a body instead of instead of a machine which is a new way of talking about economics. Is there are other people talking about it in that way? It's not just Ken right?
Tom Passmore: So, Ken brought it up that is it's been thought about that like a long time now.
Ken Webster: It's the flexible idea of the Circular Economy is that it's a toolkit. Now toolkit about if you like slowing the flow of resources, closing the loops, getting higher utilization, shifting from products to services. It's a mix of business opportunities there to make better use of material flows and energy. That's good but you can use that to make things worse by saying increasing the power of those who control the networks. You know so that you have to pay to access almost everything because you wouldn't own it yourself. That that could happen. You might save resources. You might go “hooray we saved resources”. But you you've made the “who controls what?” question actually worse and it could go the other way which is oh it helps really encourage a lot of very small or medium-sized operators to take advantage of these cascades of materials and products and offering services and using platforms to exchange a bit like your own. Which could add to well-being by adding to the ability of people to help meet their own needs and to satisfy local markets and local human needs, more widely. It's all depends, as they always say, on the rules of the game. What are you playing it for? If you're in a world where assets matter most and the value of assets, well the Circular Economy is great because you just helped dive into controlling more material assets and that and that and what they say in economics is economic rents. You know it's unearned income because you control it. It was on the news today about prices for dropping people off at an airport. That's a classic example of an economic rent. It's an unearned income. What can people do if you want to drop somebody off at the airport you've got to get close to it and they will charge you for using that space for a few minutes and this is a this is not something I think most people would think of improving well-being. It's about you know my my old phrase is “that the Circular Economy needs to be regenerative, accessible and abundant” and and that's that the real test you see. Economics is not neutral. Economics is to answer those three questions of: what do we produce? how do we produce it? who gets the benefit? And they're always around questions of power and influence and control.
Bex-Rae Evans: What we're saying here basically it's the same as what we talked about in tech alot that the Circular Economy doesn't inherently mean everything's gonna be perfect and well-being is thought of naturally as part of the system. It's it's who's using it that matters.
Tom Passmore: Yeah yeah and that that's what I was thinking as well like it's like yeah who produces what? Like the circlular economy isn't good or bad. Like it is neither I know Ken says like the economy isn't neutral but the circle economy is neutral at the moment because we're not fully investing in it, we're not fully like using it and utilizing it. So at the moment it is. It's a benign kind of framework. It's just how, how do people use it and this is where I think it becomes really interesting. Because again if you just think about material flows it's all very nicey, niecy. But now it's just like actually if your talking about power and influence and money you know, billionaires. Losing trillions of pounds of food waste a year like that kind of stuff like that it's like Oh like the Circular Economy could go like could could send us the wrong way. If it's just around owning massive asset classes forever.
Bex-Rae Evans: And here was me thinking it was gonna fix everything and naturally just weed out the bad actors but it's not. It does depend whos on who are the actors.
Tom Passmore: Yeah and I think it's wonderful at Tech For Good Live we do talk about this kind of em this idea for like kind of intent and like agile and and intentions like let them known. Because then everyone knows where you're going or what you're doing and I was never expecting to be talking about economics in that way. And but yeah, like Ken brought it up and it was really interesting to listen to.
Ken Webster: Well it's something of that in there and it's all about these open iterative systems which have got a degree of stability but they're not determined and yes it's all about intention and that's why it’s Bill McDonough and that said it's a regenerative and restorative by design … and intention. It's not only do we design it but that's what we intend to happen. And he says design is the first sign of human intention anyway. What did, what did we really want? Is that what we really wanted? A bunch of dead trees and poisoned atmosphere. Was that the plan? If that wasn't the plan what is the plan? And simplistic in a way but I enjoy that sort of being brought up short by just saying what we have now is not an accident somebody made some decisions.
Bex-Rae Evans: But doesn't that go back to unintended consequences as he said I don't think anybody's set out to kill a load of trees but they just ignored the fact that it definitely would kill other trees
Tom Passmore: Yeah and I think that's the thing like someone made a decision hundreds of years ago to go A or B. That was fine at the time. And then we've got our kind of if-this-then-that statements on the way down we've got to a point where like our oceans are full of plastic, we're in a climate crisis and there's loads of dead trees. And it's just like yeah no one there was no intent there to do that
Bex-Rae Evans: But there wasn’t intent not to do it
Tom Passmore: Yeah that's the thing. Like no one sat down and said we want to rip all of the resource the planet to create loads and loads of pointless wealth, but actually this is where we've got to. And no one said no. No one kind of said stop. Do you know what you're doing? Stop it. So there was no there was no intent, and that was probably probably worse. Like we're just ripping ourselves through this planet! Yay economics.
Bex-Rae Evans: This got dark.
Tom Passmore: Yeah yeah a little bit. So I talked to Ken about it and like tried to understand economics a little bit more and how the Circular Economy can either be good or bad for the future well-being of everyone. So I wanted to talk to like some other people about it. Who are kind of bringing their areas, like Scotland in London, why they're pushing towards a Circular Economy? Is it just all sweetness and light, or is it is it kind of …
Bex-Rae Evans: Lies
Tom Passmore: Is it all lies? Is it is it just buzzwords? So I talked to a guy called Iain. Lovely Scottish Iain. So this is his introduction. Just so you're aware sound quality on this isn't great so I do apologize for that.
Iain Gulland: Hi I’m Iain Gulland and I the Chief Executive of Zero Waste Scotland. So Zero Waste Scotland is Scotland’s Circular Economy expert agency. We are fully funded by the Scottish Government to really accelerate the Circular Economy here in Scotland hoping not just consumers but businesses to differently about how to use products and resources more responsibly, in a more circular fashion. So that’s primary function. We also still provide support to local authorities and recycling services and businesses on wider resource efficiency measures including energy efficiency as well so we have a broad remit here in Scotland. But we are part of the Scottish Government landscape.
Tom Passmore: Yes I talked to Iain in for quite a long time on a very bad phone line, so I do apologize about that and because it can be a bit hard to hear but was really interesting his take on my Scotland's going down the Circular Economy route.
Iain Gulland: It is quite interesting it kind of started obviously you know a few years ago when we were starting to look at opportunities I guess in terms of waste management, more sustainable use of resources. We tapped into different ideas like Circular Economy and realized that yeah we were obviously increasing recycling rates significantly here in Scotland both in household and businesses but the vast majority in the 75% of the materialwe were collecting for recycling was being exported out of Scotland and on our analysis at that time suggested that for every one job that was in the collection of materials for recycling there was a further eight jobs in the reprocess and remanufactured and resupply of those materials back into the economy. And so, it became a kind of economic opportunity for us to kind of really think about how do we make more use of the waste materials or the resources coming through our economy. But also, it could be actually start to think differently about the system, so it wasn't just you know by luck that we had these materials so we were actually designing the way that we could used. So, we did a lot of research. We did some analysis of key sectors. Food and drink, manufacturing, Oil and gas even and try to understand what that would look like an economic opportunity if we change the way materials were used and that started to add up to some big numbers in terms of millions, hundreds millions of pounds and food and drink was about 500-800 million pounds of opportunity. Manufacturing was about the same five hundred million pounds. Obviously there was a potentially increase in the quality of jobs not only the number of jobs but in the quality of jobs that can be realized through different tactics. So all of kinda came to a point where the Scottish government really started to think yeah this is not just an environmental story here this is an economic opportunity and and we started to think about strategy so we developed a strategy in 2016 which would set out the ambition that we find here in Scotland and yeah so it's been woven into not just environmental policy area but and obviously more recently into the climate change policy area but also into the economic strategy for Scotland manufacturing strategy for Scotland and the skills was a development strategy for Scotland so becoming more woven into the fabric of where we wanted Scotland to go as a successful mission.
Tom Passmore: Yeah I find it really interesting there that Iain really really focuses on em jobs and really, really focuses on like Scotland's ambition. And it's just like yeah I can see it like that. It’s really exciting. We talked a lot more and again I won't, i won't play a lot of Iain’s stuff just because the sound quality is a little bit lower but when you talk to Iain it is just like yes this is really good for the people of Scotland. This is really good for Scotland, this is really exciting and then I was invited to talk to James as well.
James Close: I'm James Close I’m the head of the low-carbon Circular Economy program for London and I work for LWARB which is London Waste and Recycling Board and prior to joining LWARB by was the director for climate change at the World Bank based in Washington DC where we were encouraging client countries to put climate change at the top of their development objectives and we managed to double the share of our lending toward climate change. I run the Circular Economy program and that has a couple of strands. The first strand is the Advanced London Program where we are working with small medium sized enterprises who are committed to driving their businesses through Circular Economy principles. We've got I think it upward of 50 businesses in that program and then we also have an accelerator which includes another eight businesses where we're really giving them some very specific supports to help them access finance and scale up their their business. We also work with other partners to help accelerate the principles of the Circular Economy through London. Influencing the policy work through the GLA but also working with the London boroughs to help them accelerate their Circular Economy approaches. So they can reduce their waste and increase their recycling.
Tom Passmore: Talking to James is like a really different kind of feel to talking to Iain like and again it's this idea that the Circular Economy is a framework like it's it's a toolkit to kind of to work in different ways and different operators so again I asked I asked the same question to James about why are London going going down this route.
James Close: We think it's good for business because businesses can be much more focused on what they're doing in terms of managing their resources and they're also responding to consumer demand as consumers think more about their environmental footprint and how they could reduce it. And these new circular business models are things that are going to drive the transition that we need to make to a low-carbon economy which uses resources more efficiently. Moving from a linear use of resources where you put the resource into the top and you throw away at the end, to a circular use of resources where you able to reduce consumption but reuse it and recycle activities and of course then repair as well and you've just got more efficient economy as a result of that. And that creates opportunities for business but it also creates benefits for consumers, they're able to reduce their costs, and they also have access to different ways of doing things that are going to be much more effective for their household, and really quite exciting in terms of the use of deployment of technology. And also beneficial for the environment and of course in a city like London that means that we can improve air quality, which gives people much healthier lifestyles. So there's a real multiple benefits coming to different types of people as a result of adopting Circular Economy principles, and I think the fact that London's at the forefront of all of this means that it can present itself internationally as a great place to do business and that's going to attract inward investment and that's going to help the London economy grow in the high-value sectors that are really going to attract good and exciting new jobs. So we're creating this cluster really of Circular Economy businesses that are going to have a great attraction for investors and have significant benefits for consumers and citizens and are also going to lower the costs of managing London's waste and managing it more effectively so that not only is it going to get reduced but waste gets recycled and used in more intelligent more effective ways.
Bex-Rae Evans: James has a really good CV. Can I just put that out there? What a cool background he has. I mean Iain might do as well he just didn't talk about it. But I like the obviously James knows how to talk about this to enthuse people about it so he's talking about the positive effects that it can have on the economy, but also not forgetting the positive effects on the people living in London as well, and the additions were mentioned and Iain has obviously crunched all the data in Scotland and knows how that can benefit businesses. So the they're both it's I think it's really cool that there's there's people working on this and it's like paid for by the government.
Tom Passmore: No definitely and it's those different approaches as well so like yeah James talks very much about like the ability to do business and that ability to like lower emissions and that ability to get investment. And then Iains talking about the good of Scotland and the good of like getting improving jobs and it's it's it's subtly different but that's the idea of this framework and that's what's really exciting, like people can look at it in different angles and figure it out what works well for them in their location that works well with their populace. Because again we're gonna have to it like I can James was saying like policy needs to change which then gets obviously that's politics. So you have to talk about it in different ways and I think that's what's really exciting that's when you know it's actually it's starting to get some momentum where people can look at the same thing but be able to talk about it differently to get different people on board and get different people engaged, and that that's what's really exciting and I think that's what allows people to talk about the the Circular Economy no one ever talks huh when was the last time you talked about the economy? I've never talked about it.
Bex-Rae Evans: Last night Tom we were taking about it last night.
Tom Passmore: Yeah in the last six hours. No yeah I think like no one ever talks about it and again I was talking to Iain about this and this is my I think this is my favourite quote of the whole series so I'll just play it and then see if other people like as much as I do.
Iain Gulland: It's an interesting time I just think it's it's moving from well it’s like what we've seen it’s definitely moving from an environmental imperative which is where I guess it started you know it's about how do we make more out of the materials and reduce the consumption etcetera I think we're seeing that it's obviously now being framed about addressing climate change of course it is as you know but also but its economic story you know we’ve passed to that as well people recognise you know obviously at a macro-level billions of pounds worth of opportunity but actually that you called it left leaning or not it is tapping into something and there is the idea of social value of well-being you know we were very keen on here's Scotland’s First Minister's very keen on like you know this idea of well-being economy and measuring success not just in GDP and the Circular Economy plays into that and it's not just about money you know it kind of feeds that thing well what you wanna call it human nature thing about working together working collaboratively and you know doing something for the environment people for the planet do something for your community and yeah you know making things better and all right you know that’s what yeah well we were moving into that feels like the next part of the rainbow or whatever you’re calling it you know we're picking up as a resource picking up another set people were really interested in the Circular Economy that feeds that need so to speak and I think it’s a great thing to talk about because as I said people like to explore it and smile when they are doing it because it’s a fun thing to do
Tom Passmore: People smile when they talk about the Circular Economy because it's a fun thing to do. I love that and it's so true. I mean I'm smiling right now. But like and they do and you can see it and that's what's so exciting that's what is so like so exciting about the Circular Economy for me and about the economics part of it started this like “oh we're gonna have to ask her economics based questions” we've gone into like living systems and blood flowing through the system and making sure that it's about well-being and like actually that's like that's what the economics should be about. That's what the economy should be about. It shouldn’t be about money and who owns what, who produces what, why? Who was the biggest pay check? It should be about well-being and how it improves it and I think Iain kind of really as soon as he said it I was like “oh-my-god-that's-amazing” like because people do smile when they talked about the Circular Economy because it allows them to think in those ways and like allows them to put themselves in a world where they can solve problems in their way and collaborate while doing it and that's just great.
Bex-Rae Evans: Next time on Tech For Good Live and the Circular Economy we look at a real-life case study and look at aluminium and how it flows through the system.
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. 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. If you're interested in learning more about the Circular Economy then why not listen to the LWARB Circular Economy podcast.
Category: Circular Economy
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