The Circular Economy - 2013 Report - State of Texas Alliance for ...

TOWARDS THE CIRCULAR ECONOMY | 77
160 Maximum USD 500,000
loan, over 5 to 15 years, at
5.5% - Money market rate is
around 7.5%
What will also help to quickly reach scale
is regulation in the areas of consumer
and corporate responsibility, accounting,
certification, and standardisation.
Providing a suitable set of international
environmental rules. Government and public
sector entities can help to foster cross-chain
collaboration by establishing standards and
guidelines. Governments should re-examine
certification programmes to enable new ways
of confirming the viability or safety of circular
products. As one example, limited certification
guidelines currently exist for the use of the
digestate from the anaerobic digestion process
as a fertiliser. In a related vein, public authorities
can also encouraging the shift from consumable
to durable, for example, by making reusable
beverage cups mandatory at music festivals
and other large-scale events, all of which must
currently obtain local permits to be held.
Regulation could push producers to be more
responsible for the end of life of their products.
This would provide greater incentives for
deeper circular design of their business model.
One area that could greatly benefit from deeper
government involvement is the preservation
of soil fertility. A few governments have
already started responding to the need for
constant soil replenishment and a healthy
balance of nutrients. In Ireland for example the
government has put in place a comprehensive
range of measures. One of the provisions
of its ‘Standards of Good Agricultural and
Environmental Condition’ is to maintain the
organic matter content of soil above the critical
limit of 3.4%. A number of agricultural funding
mechanisms include soil fertility criteria and
a fertility monitoring system is in place.
Expert matter advice is available to farmers
where needed.
Leading by example and driving scale up fast.
There are many opportunities for governments
to use their own procurement and material
handling processes to accelerate the spread
of circular setups. In the U.S., the policy of
moving towards procurement of performancebased
services (rather than products) has
created a market of significant scale. In its
convenor or ‘matchmaking’ role, a government
can initiate concerted efforts among different
companies in the value loops that are large
enough to overcome diseconomies of scale.
One example is in phosphorus markets, where
a few governments have started actively trying
to help businesses extract value from sewage
sludge. In Germany, the Federal Environmental
Office recently announced a goal of retrieving
phosphorus from sewage, and Sweden set
up an action plan in 2002 aimed at recycling
60% of phosphorus, mainly by making sewage
available for reuse. There may also be a role for
intermediate, ‘convener’ institutions in some
countries (e.g., WRAP in the U.K.).
Access to financing. All players across
value chains need access to financing and
risk management tools to support capital
investment and R&D. These points are closely
linked to the above-mentioned ‘rules of the
game’: a stable regulatory environment is a focal
point for investors. Governments can create
further funding stimuli by underwriting some of
the risks associated with innovative businesses.
In Brazil, the Ministry of Agriculture, through the
ABC program, gives access to preferred credit
conditions to companies taking innovative
initiatives. 160 Private investors are already
investing in circularity and are doing so for
profit. Another example is Climate Change
Capital (CCC), a London-based investment
manager and advisory group specialised in
carbon finance. The fund is one of the largest in
the sector with over GBP 1 billion invested, and
is currently investing in anaerobic digestion in
the U.K.
Besides direct government funding, publicprivate
organisations also play a crucial role, for
example in circular systems for soil nutrients.
One example is the Nutrient Platform’s program
to ‘close the loop’ in Ghana. It is working on
developing organic fertiliser products for the
cocoa sector from different waste streams.
Nutrient Platform’s approach is strongly focused
on business development, combining local and
international private sector players on both the
demand and the supply side.
While the list of enablers is long, the trends
supporting a large-scale shift bode well. Both
resource prices and disposal costs are rising,
increasing motivation to find new solutions.
Progress in technological and material
development supports longer-lasting and more
reusable designs, and increased visibility along
the value chain enables all participants to better
track products and materials.