Transcript Theory and Practice of Sustainable Development

Circular Economy for China:
——Theory and practice from an ecological
economics perspective
Prof Dajian Zhu
Institute of Sustainable Development & Governance
Tongji University,Shanghai,China
[email protected]
Circular economy initiative in China

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1998-2002: academic studies
2002-2005: become one of national
sustainable strategies and policies
2006-now: circular economy initiative in the
11th five year plan of economic-social
development
Three issues on CE

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Why (Scenario)—China needs to decouple
economic growth from environmental impact,
but in the sense of relative decoupling
What (Model)—CE is the kind of multicycled economy towards more services with
less throughputs.
How (Strategy)—How for China to make CE
into practice.
1.Why: Decouple
environment

Three ends of
ecological
economics

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Ecology:
sustainable scale
Society: equitable
distribution
Economy: efficient
allocation
economy
with
Development curves of ecological economics
Quality of life
Economic growth
Material throughput
Three pillars for China’s development
Economic growth (↑):
≥ World Average Income
GDP per capita
Environmental impact (↓):
≤ World Average Impact
Eco-footprint per capita
Social Development(↑):
≥ World Average Wellbeing
HDI or RGI
2050:Economic Size of the BRICs
BRICs Have a Larger US$GDP Than the G6
in Less Than 40 Years
GDP
(2003 US$bn)
50000
100,000
BRICs
90,000
G6
80,000
GDP
(2003 US$bn) The Largest Economies in 2050
2025: BRICs
economies
over half as
large as the G6
70,000
60,000
45000
By 2040:
BRICS
overtake
the G6
40000
35000
30000
50,000
25000
40,000
20000
30,000
15000
20,000
10000
10,000
5000
0
0
2000
2010
GS BRICs Model Projections.
2020
2030
2040
2050
Ch
US
In
GS BRICs Model Projections.
Jpn
Br
Russ
UK
Ger
Fr
It
Three scenarios of China development

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Scenario 1（traditional growth）: Under the present
mode,the impact of China will be at least 4 times of
the current level;
Scenario 2（absolutely decoupling）: To keep the
current impact level, we should at least raise 4 times
of eco-efficiency.
Scenario 3（relatively improving）: In the level of
relatively decoupling, we should raise 2-3 times of
eco-efficiency；
1. 1 Scenario#1: Economic Growth with more impacts

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I=Impact: resource
consumption and pollution
impact of development
P=Population:How many
people will we have ?
A=Affluence:What’s the
consumption level?
T=Technology and
Management: How fast and
big do we consume the
resource and environment ?
Population: How many people China will
have in 2020

China has 1.3 billion people in 2000

Increasing 10 million persons per year
1.4-1.5 billion till 2020 in China (1.1 times of the
year 2000)
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Demand of 10 million persons for urbanization per
year
60% urbanization rate till 2020 in China
Affluence: In terms of GDP per capita

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
Beginning of Reforming and Opening: $250
per person
1981-1990: $500 per person
1991-2000: $800 per person
2001-2020: $3000 per person (about 4 times
of the year 2000)
How big is environment impact in 2020 ?
(According to the formula: I=PAT,when T=1)
Year
Population
(billion)
Affluence
(GDP per capita)
2000
1.3(1.0)
800(1.0)
Environment
impact (how
many times)
1.0
2020
1.4(1.1)
3000(3.75)
4.0
2050
1.5(1.15)
10000(12.5)
14
To call for an alternative development model

traditional approach （high economic performance
and high environmental impacts）
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The resource and environment in China are not available to
provide a growing population with higher standards in a
traditional lifestyle of consumption.
alternative approach （high economic performance
and low environmental impacts ）

The challenge for China is to create an alternative one to
traditional development modes which would meet the
needs for development while maintaining and even
improving the health of ecosystem.
1.2 Scenario #2: Absolute Decoupling of
economic growth from impacts
Wellbeing
Ecological Economy
Resource throughput
Traditional development
Alternative development
Different requirements for the developed
economy and developing economy

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The target for sustainable development is to reduce
the global material flow by 50% in the future fifty
years, It’s known to all that reduction of materials
into industrial countries (20% of the materials that
human possess), we can organize in this
way:increase the material consumption of southern
countries temporarily and then reduce it in the
material flow reduction plan. Maybe this is a
reasonable hypothesis of developing policy.
——Breek: How large the world needed by human
1994）
Different requirements for dematerialization
100%
80%
The world
To 2020,decrease 20%
Developed countries
To 2050,decrease 50%
50%
To 2100,decrease 90%
40%
Developing countries
20%
10%
China
2000
2020
2050
2100
Human Development and Eco-footprint
Low-median HDI
(under 0.8)
Low EF
(under1.8
hectares)
High HDI (above
0.8)
Survival or less
Sufficiency or
developed (level A) Sustainable
development
(level C)
High EF( above
Overshot (Level
1.8 hectares)
B)
China: low HDI with low Eco-footprint
Basic Needs for survival and Decent Life
1.3 Scenario#3: Relative decoupling of
China’s development and environment
Growth of economy
Decoupling Factor
Growth of resource use
Relative decoupling
Growth of environmental pressure
1
Time
Decrease of resource use
Absolute decoupling
Decrease of environmental pressure
Three stages of China’s development
Well-being
Resource
throughput
2000
2020
2050
Target of China development in terms of three pillars
China’s
developing
phase
Economic
growth
Social
development
Environment
impact
General
well-off
1978-2000
$800 per
capita
Human
development
index 0.7
Eco-footprint ‘s
rapidly increasing
Entire
Well-off
2001-2020
$3000
per capita
Human
development
index 0.8
Eco-footprint’s
slowly increasing
$10000
Per capita
Human
development
index 0.9
Keep the world
average level
General
2021-2050
modernizati
on
2.What：Towards a multi cycled economy
resource
Economic performance on the base of ecological economics
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EP= Service/Throughput
= Service/Stock×Stock/Throughput
Here are three guiding principles
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Maximum of service (well-being);
Minimum of resource (throughput);
Sufficiency of stock (accumulation).
To two efficiency of development
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To raise productivity efficiency ( Stock/Throughput )
To raise service efficiency ( Service/Stock)
To increase resource productivity
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One of the key issue of CE is for China to raise resource
productivity.
That is to decrease the resource consumption and pollution
impacts while to increase the economic output
Economic output
RP
=
Resource throughput
To get more service with appropriate consumption
Circular Economy
Level A
Level C
Level B
2.1 Explanation#1: Linear economy or fromcradle-to-grave economy
Raw materials
（POS）
Basic Chemicals
Products
(EOP)
Use of products
Waste Disposal
From vertical to horizontal improvement
From linear thinking to circular or multicycle thinking
2.2 Explanation#2: Three kinds of circulating
Eco-efficiency
Service economy
Reuse of goods
Jump #3
Recycling of wastes
Jump #2
End of pipe
treatment Jump #1
1980s
1960s
time
1990s
2000s
Level #1：from end-pipe treatment to waste
recycling
Recyclin
g of
wastes
Clothes from recycled material
Level #2：from throwaway of products
to reusing
Product
manufacture
resource materials
Loop 1
product
use
Loop 2
waste
Loop 1：to close the loop of goods (reusing of products)
Loop 2：to close the loop of materials （recycling of waste）
Level#3: from selling product to
providing service
Circular economy emphasizes on value add-on
Low value
High-value
Value add-on
Substance transform
material
product
Linear economy emphasizes on substance production
Service instead products
Customer needs helps Electrolux clean clothes without dirtying the environment
Yesterday
Customer Buys:
A Washing Machine
Tomorrow
Electrolux provides a laundry function with:
A washing machine at home
- Electricity
- Service
- Upgrading
- Product Recycling
Customer Gets:
Clean Clothes
Public transit instead of private cars
Towards a function-oriented lifestyle
degree of ownership
LEASING/SERVICE
TOOL HIRE
none
rental of product per unit time
as required，eg taxi
individual
shared
the majority of consumer
Durables，eg private cars
CONSUMER GOODS
use per unit time as required;
product not owned by group，
eg public transit
full
ownership
degree
of
sharing
specified share of time
use of product owned
by group，eg company bus
CO-OPERATIVE
Manzini, Ezio and Francois Jegou (2003) Sustainable Everyday, Edizioni Ambiente, Milan
2.3 Explanation#3: scales of circular economy
FACTORY
ECO-INDUSTRIAL PARK
REGIONAL ECO-INDUSTRIAL NETWORK
(1)Inside level of enterprises
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At the individual firm level, managers are to seek
much higher efficiency through the 3Rs Principles,
reduce consumption of resources and emission of
pollutants and waste, reuse resources, and recycle byproducts.
In this regard, we want to mention that sustainable
product design or DFE (Design for environment) is
important in the current Chinese CE concept.
(2)Inter level of enterprises
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The second level is to optimizing resource
efficiency within industrial parks and clustered
or chained industries, which can be larger than
the sum of improvements made by
unconnected individual actors.
But this level is simply not equal to the reuse
of by-products within the network of firms.
(3)Regional level: integration of
production and consumption
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The third level is to integrate different production,
consumption and its support systems in a region so the
resources circulate among industries and urban systems.
This level requires development of municipal or
regional by-product collection, storage, processing, and
distribution systems.
One example is such application is resource-based
planning for city and regional development.
3.How：To enable Circular Economy
US
Europe
China
Developed
Developed
Developing
Government Weak
initiative
Strong
Strongest
Green
Culture
Strong
Developing
Stock of
goods
Weak
3.1 Strategy#1: leapfrog instead of follow-up
CO2 policy
Indicators
for social
change
System
innovation
Personalized
public transport
Mobility leasing
Advanced
collective transport
Organized car
sharing
P+R, bus lanes
Anti congestion
policy
System
optimisation
Urban cars
Car electronics
Intelligent
motorways
Fuel cell vehicles
System optimization versus system innovation in passenger road transport (Kemp and Rotmans, 2001)
China needs to develop his stock of goods
Entire well-off
1200
1090
1019
中国人均G D P
housing transportation
1000
美元
800
clothing
foods
600
400
200
General well-off
0
1990
1992
1994
1996
1998
2000
2002
Towards a Circular-Economy-based product service system
Product group
Strategy
Catalytic goods Reduce and
recycle
Consumption
goods
Durable goods
Reuse and
remanufacture
Selling
performance
Issues
Packages,
Solvents
Household
applications
Cars and mobility，
Buildings and housing,
Infrastructures and
public service
2012:Shanghai public rail transit network
Transport differential policies in Shanghai
Major transit
mode
City
central
Ratio of public
transport to private
cars
Large capacity rail 3:1
network
Inner area Surface and rail
transit
2:1
Suburban Expressway
area
network
1:1
3.2 Strategy#2: Active government and
governance
Institutional capital
Government
Capacity
building
Social capital
Active
government
Circular Economy
Policy achievement
Civil Society
Voluntary
participatio
n
Bottom-up self-organizing model （BSM）
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Emerges from decisions by private actors motivated
to exchange resources to meet goals such as cost
reduction, revenue enhancement, resource access.
The individual initiative to begin resource exchange
faces a market test and if the exchanges are
successful, more MAY follow.
In the early stages there is not consciousness by
participants of inclusion in an “industrial ecosystem,”
but this can develop over time.
Evolved Kalundborg EIP in Denmark
Top-down planned model （TPM）
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Includes a conscious effort to identify companies
from different industries and locate them together
so they can share resources across and among
them.
Conceptually, it is an attempt to design and direct
a closed-loop system in a circumscribed
geographic unit.
Involves key stakeholders and the participation of
at least one governmental or quasi-governmental
agency with powers to encourage development.
Planned Guitang EIP in China
Source: Q. Zhu and R. Côté, 2004
2006-2020: CE initiatives by Government
3.3 Strategy#3: From general principles to context-based
theory for developing economy
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To develop a leapfrog theory on the base of
ecological economics
To raise the awareness and knowledge of senior
levels of policy-makers
To develop a system policy for circular economy
How long could Ecological Economics
replace New Classic Economics?
New classic economics
Ecological economics
1998
Ecological economics: think about
the next 20 years (2008-2028)
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The past 20 years: to establish guiding principles
based the high income countries (version 1.0)
The next 20 years: to improve and develop theory
and policy based on the developing countries’
practice (version 2.0)
Let China become one of the world labs for
Ecological Economics…