I recorded a great interview with my colleague Craig Lawrence of Lytton Advisory earlier this week on the concept of a Circular Economy, which is creeping into economic and environmental policy discussions and into government publications. For instance, the Circular Economy is referenced in the Queensland Government’s waste strategy , which includes a waste levy to divert waste from dumps and various measures to promote recycling. According to the Queensland’s Waste Strategy website, the waste strategy “focuses on transitioning to the principles of a circular economy to help retain the value of material in the economy for as long as possible.” But what on earth is a Circular Economy, and does it make any sense?
I thought Craig would be a good person to chat with regarding the merits of the Circular Economy concept, as Craig does a lot of consulting work on the economics of waste and recycling, and he’s a former manager of teams of economists in Queensland’s State Development department. Craig thinks that there is some merit in the Circular Economy concept, but we need to apply hard-headed economic thinking when it comes to the specifics. This is a great point from Craig, because Australia’s Productivity Commission has repeatedly questioned the merits of a range of environmental policies such as plastic bag bans and measures to promote recycling (e.g. check out Is banning plastic bags the best option to tackle litter and reduce waste? and Container deposit scheme very likely a costly bad idea).
Toward the end of the conversation, Craig notes:
I think that there’s an opportunity here [with the Circular Economy]. The linear concept, I don’t think is sustainable. And so we need to do something different. But I don’t think that there’s a blanket solution or an easy panacea. And I still think the economist in me wants to analyse and collect data, and look at individual markets and look at specific opportunities and weigh them up…I don’t want to be running or pushing a green solution for the sake of a green solution. I want to know that it’s something that is actually workable, viable, something that is going to increase economic utility, consumption, and can also engage with business properly as well.
Nicely said, Craig. I’ve now published my conversation with Craig as Episode 70 of my Economics Explored podcast. So if you’d like an overview of the Circular Economy concept and a hard-headed assessment of it from an economic perspective, check it out and let us know what you think. Finally, thanks to Craig for the interview and for his sharing of it on his Lytton Advisory website.
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