La REcyclerie

La REcyclerie conference: the circular economy driving local economic development

Posted on 29 November 2016.

Job creation, relocating production, the need to collaborate... For its fifth and last conference of the year at La REcyclerie, the Veolia Foundation looked at the impact of the circular economy on the economy of the territories.

As part of its "Europe of Possibilities" program, the aim of which was to highlight European sustainable development initiatives, the Veolia Foundation developed a series of five thematic conferences called the "2C conferences". Organized in partnership with the École des Ponts, Institut de l’Économie Circulaire, the association CliMates and the Ellen McArthur Foundation, these conferences have been held at La REcyclerie throughout 2016. They brought together a number of experts to explain the different issues relating to the circular economy to young people and students.

The fifth and final conference in the series took place on Tuesday, November 22, taking as its theme the impact of the circular economy on local economic development.

What is the circular economy?

We talk about the circular economy as opposed to the traditional economic system based on a linear approach: produce - use - throw. Juliette Pouzet, project manager at Veolia, reminds us that this type of economic model is based on erroneous assumptions. In order to maintain our current rate of production and consumption, raw materials would have to be inexhaustible, transforming these materials into finished products would not emit carbon, and disposal of the waste would not be a source of pollution.

The reality is quite different. Humankind has extracted so much raw material from the ground that now the largest source of supply is... in objects! To continue using materials, we therefore have to learn to recover them from our waste. This is the principle underpinning the circular economy.

The impact on employment and growth

"There's gold in our garbage" – an often heard assertion. However, in order to exploit this valuable resource, we need a waste-to-resources industry.

This industry would create a large number of jobs. Emeric Fortin, a professor at the École des Ponts, lists three types: the jobs needed for sorting waste, those related to treatment and processing operations, and finally jobs in eco-design - designing products from a circular perspective that are made with recycled materials that can be recovered when they reach the end of their lives.

The challenge of the circular economy is also that of relocating activities locally. Our current economic model is based on outsourcing industrial production and importing our resources. However, if we could recover the material used to make our objects, it would make no sense to then send it abroad. The challenge therefore lies in developing this secondary raw material locally. "It systemically challenges our economic model since it would be a matter of getting back to producing locally," says Emeric Fortin. And that’s where the real potential of the circular economy lies: successfully create a new network of players focusing on recycling waste and ensure that this new value chain creates jobs.

In its report "Growth Within", published in June 2015, the Ellen McArthur Foundation believes that the circular economy could generate far more growth and jobs than our current development model. By 2030, Europe could thus achieve a net profit of 1,800 billion dollars and increase the income of households by 11% (or 3,000 euros per household).

A case study in Hungary

In 2013, the city of Pécs in Hungary called on Veolia to modernize its electricity power plant so as to reduce its carbon footprint.

Until then, the plant had been run using gas, a non-renewable fossil fuel that generates CO2. Veolia suggested replacing the gas-fired power station with a biomass unit run using waste wood and straw. Two local resources present in large quantities on the surrounding farms.

The combustion of wood and straw generates enough energy to cover all the electricity and heating needs of 150,000 inhabitants. The result is that Pécs is the only city in Europe to have become totally energy independent by exploiting local resources. Thanks to the biomass unit, 400,000 tons of CO2 emissions are avoided annually. In addition, 170 jobs have been created to manage the straw and timber supply chains. It’s the perfect example of a circular system with a direct impact on the local economy.

Local cooperation, the main challenge for the circular economy

So if the model of the circular economy is so virtuous, why isn’t it already more widespread? Because it is sometimes complex and because it requires a lot of coordination. "This coordination is not always natural between players in the same territory", explains Adrian Deboutière of the Institut de l’Economie Circulaire.

In France, the role of the regions is to connect the different public and private players in order to optimize the flow of materials and set up short loops. It may involve pooling services or equipment and, of course, recovering some people’s waste to make it someone else’s resource. For example, in Normandy, a local loop has been created between canteens that wanted to make use of their organic waste and networks of farmers who were struggling to find sources of compost.

"Industrial ecology uses cooperation to drive economic development," explains Adrian Deboutière. The players have to become part of the circular economy at local level: public and private players as well as consumers. "Everyone has a role to play in the transition to a circular economy," concludes Bénédicte Niel of the CliMates association. Don’t say you haven’t been warned!

Stay informed: 2C conferences will resume in 2017 with a new program at La REcyclerie.