This Climate Business: Small, circular, resilient economics – Ken Webster (edited excerpts)
Listen to the full episode here.
Vincent
If you're seeking some hopeful solutions for a sustainable economy, then NextFest is the place to be. It's a conference for entrepreneurs, investors, venture capitalists, technologists and thinkers and activists and agitators. So please come along, get your tickets at sbn.org.nz. It will be a great injection of energy into the sustainability community. And we need that now, don't we Ken? Because all around the world, sustainability seems to be under pressure, but you are going to bring us some words of hope and encouragement, I hope, from the UK?
Ken
I'm very, very pleased to be able to visit New Zealand and do some workshops of different sorts, as well as attend the Next [Fest].
Vincent
And you are also involved with Auckland University. Am I right about that?
Ken
I am involved with the business school there. I've visited the last couple of years to help run workshops and programs and they have something called CBUS, Circular Economy Business and I'm part of that network. I've also had historically a good connection with New Zealand because one of my first grown up girlfriends ended up being a New Zealander.
Vincent
That's usually the best reason to come to New Zealand. It's either you're escaping Trump land or you've got a girlfriend.
Ken
That's right. We won't go back into all of that history. I will stick with the present. I think there's good and bad news around sustainability and the circular economy. The good news is, despite recent pushbacks or reluctance in different parts of the, well, let's just say the USA in particular. I think that can be ignored as a blip...Quinn Slobodian has written a book called Hayek's Bastards, in which he says that the neoliberal right wing didn't really think they had won when the Soviet Union collapsed. They thought that all the red and socialist and communist folks had turned into green ones. They thought that the enemy was now a progressive economics and the progressive social agenda hidden behind the green agenda. It's a very interesting read, and I unfortunately think there is some truth in the, not in the accuracy of that judgment, but in it being a force at present times.
Vincent
There is a ridiculous kind of opposition in some quarters to even something as simple as renewables, which have such economic logic. It's absolutely mental. And they've turned the physics of climate change into a political movement, which is a great shame.
Ken
It's a very great shame. And exactly the wrong thing at the wrong time to be doing. There’s something in the circular economy which, unfortunately, can reinforce this economic concentration we're seeing in business around the world. We're seeing consolidation in industries, fewer players, more power, more power in the market, to disrupt the market if you like, and to make sure that the gains go to fewer and fewer people. Now, why is that in connection with the circular economy? Well, if you don't think that you're going to be able to sell more and more stuff ever more cheaply, partly because maybe consumers don't have the spending power, maybe because finally there might be some policy changes which would inhibit the amount of waste produce, they can think, well, actually, if we now control the whole value chain, or most of it, we can make sure that less stuff circulates, but we get more returns from it, because they want to maintain their return, so let's not make so much stuff, let's put things out as products of service, let's demand subscription income for something, let's, if you like, make sure that those products, components and materials are always ours.
Vincent
You said that there was some optimism in the story. What makes you hopeful?
Ken
Well, there's plenty of optimism in the story because, in a way, circularity goes back to systems theory. An effective system is an interplay between efficiency, which might lead to that concentration of ownership, but it's also balanced by resilience. An economy is always built on its small operators. About 90% of employment is in firms under 50 employees. A thriving, devolved economy only begins to reflect what we know from systems theory is what makes an effective and not just efficient system. You want economies of scope and not just scale. You want cross-scale circulation of products, components and materials.
Vincent
What are the drivers of when you see circularity success in action?
Ken
Yes, real cost pricing is important. I was going to go to a downside, but let's stay on the positive side. There are upcoming rules around digital product passports. Firms will really have to say what's in their stuff, where they got it from, the supply chain, costs, and so on. So, if you made it sunshine, you're responsible for what happens to it at the end of life. Now you've either got to have a very good business model to get it back in different ways, or you've got to have a very satisfactory onward movement of these materials.
Vincent
Are you seeing circular type activity at scale, at a corporate level, where reuse, repurposing, and the sort of cradle to cradle philosophy, is it being deployed at scale, or is the linear method just still so prevalent?
Ken
I would say it's still prevalent. There are example firms which have tried to get involved in a full circular process, but the very existence of scale leads to that temptation that we are going to be oligopolists, we're going to dominate this market. And that sort of undermines my sense of what a thriving, healthy circular economy is.
Vincent
We are stewards of resources. We're going to be passing on what are we going to give to our next generation? That's a philosophical commitment, isn't it?
Ken
Yes, and we've got to do it with open hands. We've got to say, I'm helping the next generation. It's my gift to the future. It's not, oh, this is really going to keep the money in my business for a hundred years because I own all these assets.
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