Traditional economics takes a one-way linear flow approach to production. Companies harvest and extract resources or materials and use it to manufacture a product that is sold to a consumer. The consumer later discards the product once it no longer serves a purpose (Figure 1). This type of economy relies on high-intensity exploration and consumption of resources, and at the same time high-intensity damage to the environment.

Although linear systems have increased the focus on recycling and reducing the impacts of waste, it has not been effective, with increased levels of waste not being recycled.

Figure 1: Linear flow of traditional production systems.

Figure 1

Waste becomes a resource

Circular economics, on the other hand, uses theories and principles from industrial ecology to adopt a closed loop system. Circular economy means reusing, repairing, refurbishing and recycling existing materials and products (Figure 2). What was once considered waste becomes a resource.

In circular economics resources are therefore kept in use for as long as possible, with the maximum value extracted by recovering and regenerating material and resources at the end of their service life.

Figure 2: Flow of a circular economic system.

Figure 2

The focus is therefore on the use of renewable energy, the removal of toxic chemicals that cannot be reused, and reuse of waste through improved material, product, system and business model designs.

Objectives of circular systems

The development of a circular economic system has a few aims. Firstly, the natural capital, which is the natural resource endowment, must be preserved or enhanced, thereby ensuring sustainable use of natural resources. This is achieved by controlling finite resource stocks and balancing renewable resource flows.

Secondly, resource yields must be maximised by circulating products within the system. Maximum resource yields can be achieved through recycling and ensuring that the products produced are of the highest quality possible.

Thirdly, waste must be eliminated through the design of products that can be disassembled and reused. Elimination of waste from production systems means that it becomes more important to ensure that consumables are non-toxic or could potentially be beneficial when returned to the biosphere.

Alternatively, durable goods such as engines and cell phones that typically contain metals and plastics unsuitable for return to the biosphere must be designed to ensure successful reuse. Redesign to eliminate waste does not have to be limited to the design of products, but could also be extended to the production processes used.

Lastly, the energy used to drive the cycle should be renewable to ensure that resource dependence is decreased, and the resilience of the system is increased. Circular economic models therefore evaluate issues of biomass and energy production, waste management, fertiliser and water use, and food wastage.

Circular economics in agriculture

Agriculture is unique in the sense that the sector is reliant on natural resources and cycles as primary inputs for crop and livestock production. High levels of reliance on natural resources and cycles can undermine the sustainability of the natural systems that support agricultural production. Resource usage efficiency and the reuse of consumer products are a way of making agricultural business models more sustainable.

The transition towards a circular economy within agriculture requires a move away from the use of technical nutrients toward the use of biological nutrients. This movement to biological nutrients can be seen in Europe with the increased focus on the development and use of biogas and organic fertilisers.

Bio-economy vs circular economy

Dr Ben Allen, a senior policy analyst at the Institute for European Environmental Policy (IEEP), wants to take the circular economy to the next level. He is calling for a transition towards a circular bio-economy, in which a traditional circular economy is integrated with bio-economic models. The circular bio-economic system will ensure that production and utilisation of renewable bio-resources and their conversion into value-added products (reuse at the end of their life cycle) are linked in one system.

Bio-economic systems are renewable since the bio-economy is based on biological resources. Although biological resources can be renewed, it is possible to use the resource faster than it can be reproduced, and as such the bio-economy can be quite linear in practice, even if circular in principle.

Circular agricultural system

Several opportunities exist for the development of a circular agricultural system. The first opportunity lies in the establishment of a regenerative agricultural system that preserves the integrity of the natural system. The system uses practices such as crop rotation, minimum till and cover cropping. Livestock and crop production are often combined to create additional nutrient loops.

Regenerative agriculture is based on principles such as retaining soil health, minimal use of pesticides and inorganic fertiliser, and combining crop and livestock production. As a result, some of the major risk factors faced by current commercial agriculture due to the degradation of natural capital, climate change vulnerability, volatile input prices, and the resulting long-term pressure on yields are mitigated.

Precision farming can increase the efficiency of conventional agricultural systems and has shown good potential for combination with regenerative practices. The use of agricultural IT, remote sensing and real-time environmental data can optimise crop yields, while reducing environmental externalities.

Bringing food production and consumption closer together through peri-urban and urban farming reduces food transport and associated costs (such as food waste, fuel, and environmental externalities). Specialised urban farming techniques (vertical farming, hydroponics and aquaponics) can be more resource efficient while saving energy, water and fertiliser.

Biological nutrients should be returned to nature and agricultural systems through composting and anaerobic digestion. An estimated 30% of food produced in South Africa is wasted. The CSIR reported that the cost to society associated with this waste is equivalent to 2,1% of the country’s GDP. The bulk of this food waste is generated in the pre-consumer stages of the supply chain with only 5% of food waste generated during the consumption stage.

South African household food wastage seems to be lower compared to international trends. Dutch households are reported to waste 13,6% of edible food while UK households waste nearly 20%. However, international trends suggest that food waste at household level is on the increase as countries become more developed. Changes in the South African food consumption patterns due to a growing middle class is already being reported.

Biogas in the bio-economy

Since the introduction of biogas by John Fry in 1957, nearly 700 biogas digesters have been installed within South Africa. South Africa thus has the potential to produce 2 500MW of electricity. Considering that South Africa produces more than 40 million tons of organic waste annually and that energy costs are increasing drastically, biogas energy presents a strong case. Moreover, recent changes in environmental legislation creates an incentive for bio-energy generation.

There is also a movement within the sugar industry to argue for the use of biomass to produce ethanol and butanol from sugar cane. Development of biorefineries could result in the self-sufficiency of the industry. Current literature on biorefineries in the sugar industry indicates that some support from government is necessary for the development of biorefineries. The economic returns on the test scenarios are not sufficiently large to attract private investment.

Transition to a circular system

In the EU, the US and China, the development of models and strategies to move towards a circular agricultural production approach has gained significant momentum over the last decade. Although South Africa has adopted some elements of a circular economy, the adoption of a truly circular economy is still a long way off. Currently, the inefficiently low cost of disposal is hampering the development of and transition to circular systems.

The transition to a circular system requires the collection and sharing of data, innovative investments and facilitation of business collaborations. Although individuals can transition, it is essential that transition takes place at the supply chain level rather than at individual company level, due to the over-arching system development required. This over-arching system development calls for systems thinking in terms of which we understand how parts influence one another within the whole, and what their relationship is in terms of the whole.

The Towards the Circular Economy reports published by the Ellen MacArthur Foundation provide evidence that circular systems offer a successful alternative to highly wasteful linear systems. The documents also discuss at the hand of case studies how industries or companies can transition. –Nicolette Matthews, University of the Free State

For references and more information, send an email to Nicolette Matthews at MatthewsN@ufs.ac.za.