A new revolution to compare to the industrial revolution is needed to transform Europe’s economy from linear to circular, according to European Environment Commissioner Janez Potočnik.
Speaking at the New Environmentalism Summit in Brussels, he warned that this revolution will require us to improve on the fact that 80 per cent of what we produce is used once and discarded.
He said: “Just as in the face of rising labour prices we made miraculous increases in labour productivity, I believe that in the face of resource scarcities and rising prices we will be able to perform miracles in raising resource productivity.
“To do that we will have to break out of our habits. We are locked into our resource intensive ways, to our old industrial patterns of production and consumption.
“Everything from our infrastructure to our financial systems, from our consumer habits to our business models are inherited from the industrial revolution. Today we need a new revolution.
“Mankind’s challenge is to turn the creativity and innovation that so successfully exploited natural resources to provide us with health and prosperity, to rolling out those benefits to billion more people, in ways that exploit resources less and cause less environmental pressure and damage.
“To get there will not only need technological development and innovation, we will also need new business models that decrease impact across the whole lifecycle of products. We must share, reuse, update, repair and recycle. We must move from a linear economic model, where we extract, produce, use and throw away, to a circular economy, where waste from one stream becomes the raw materials for another.
“To do that, we need governments, businesses and investors on board.”
He said that although words like ‘businesses’ and ‘investors’ might be seen as dirty words to some environmentalists, he believes the role of the market will be essential to solving our environmental problems. But he warned a free market alone will no bring about the changes to a circular economy.
He added: “The market cannot ensure efficiency in the allocation and use of resources if:
- Prices do not reflect the true value and costs of resources. And today they don’t
- If rewards to capital are disproportionate to other inputs. And today they are
- If managers on annual contracts are induced to make short-term investment decisions. And today they are
- If directors’ business decisions are overtly influenced by bonuses based on short-term share prices. And today they are.
“As the situation is today, market forces are too slow and imperfect. The financial, business and economic world takes a too short-term view, and politicians tend to work too tightly only around electoral cycles.”
The Commissioner also said that politicians would need to begin thinking for the long term rather than on electoral cycles.
