SHIN Sangbum
professor in the Department of International Relations at Yonsei University
Recently, the European and some of the world’s developed countries have actively introduced the circular economy model. The circular economy refers to a system that repeatedly circulates to the utmost extent possible the goods that are produced and consumed, the parts and raw materials that those goods consist of, and the value created from them, thus minimizing the loss and consequential waste generated in the process. The reason for pursuing the circular economy model lies in the fact that it creates more favorable conditions for sustainable development than the linear economy model where the serial process of “taking” (acquisition of resources) → “making” (mass production) → “disposing” (product disposal) takes place. In contrast, both sustainability and development are important to a circular economy. That is, a circular economy shall be deemed not just as the waste recycling process, but as the entire process of making the environment more sustainable and simultaneously creating economic value and opportunities.
The transition of a society with a linear economy to one pursuing a circular economy necessitates a fundamental and systematic change. All of the main agents of the economic activities, such as governments, companies, and consumers, should recognize the necessity and inevitability of the shift, and prepare and implement plans for a systematic transition. Most importantly, the move towards a circular economy requires a long-term perspective and should not be grounded on the economic sacrifice of any parties involved. Rather, adopting the circular economy model should be a process of creating value and bringing profits to the participants by providing solutions to current issues, creating jobs, and presenting business models.
The first to practice the circular economy model in the world is the European Union. In December 2015, the European Commission released the EU Circular Economy Package, which contains an action plan for transition to the circular economy model and measures for its implementation. In January 2019, it even adopted an intensive strategy for the circular economy model that mandates the recycling of all plastic packing materials by 2030. The Commission also stated that it plans to ban the use of disposable plastic items starting in 2021. Enterprises in different countries are joining the EU-level efforts for active engagement in the circular economy and strengthened environmental regulations. In other words, a virtuous cycle of the California effect is taking place, where strengthening environmental standards in a certain region leads to the same phenomenon in other regions.
Currently, the circular economy model is utilized mainly at the city level rather than at the national level. The core of the circular economy is represented as “3R,” which refers to “reducing” the consumption of resources and increasing the “re-used” and “recycled” resources for their effective “recovery.” As 75% of the world’s resource consumption occurs in cities, it is a shortcut to a circular economy to reduce the consumption of resources and increase recycling and reuse in city areas.
A circular economy, if implemented on island regions, would feature a different meaning. Since the islands are geographically isolated, it is likely to cause substantial issues due to the accumulation of waste when the “metabolism” of an island is linear. It is as if experiencing in advance the crisis that will strike the entire globe. Therefore, islands need a shift to the circular economy model most urgently. Most islands are also engaged in tourism. Consumption from tourism and the resulting waste accumulation are common problems for islands. In this sense, establishing a circular economy on an island involves eco-tourism or sustainable tourism. Since small island states are mostly low-income countries, they should also work to change their “metabolism” to ones that favor sustainability and zero-waste strategies, diverging from the economy model reliant on resource consumption and tourism.
Small-island developing states produce 2.3㎏ of daily waste per person, which is approximately 48% above the OECD average. Low income levels and high population densities of island states make it disadvantageous to reduce waste. However, waste from tourism is a more decisive factor. It is also urgently needed to reduce food waste on island states. Food waste contaminates rivers and groundwater. Since most islands lack water, it is important to build a circular agricultural model by reducing or recycling food waste.
On Jeju Island, many efforts have been made to reduce waste, especially plastics. The island started the movement called “Plastic-Free Jeju” and developed a system to discard different types of waste on each day of the week. More recently, the Jeju City municipal government announced that it would invest 3.8 billion won to build the 3R Recycling Center by late 2020. (3R here represents “reduction,” “reuse,” and “recycling.”) As mentioned above, however, Jeju Island should also find an alternative that is suitable for its own conditions, going beyond envisioning a general 3R strategy, and this requires systematic research and investigation. There have been many attempts to identify local issues and seek solutions to them at the civic society level. However, those efforts have been studied insufficiently, and it appears that a systematic analysis is yet to be made of what attempts have been made and why some of them failed.
Largely, the strategy of realizing a circular economy is divided into top-down and bottom-up approaches. All of those that first attempted the circular economy model, including the Dutch government and the governments of Amsterdam and other European cities, have established their circular economy systems with the bottom-up approach. Japan and China, on the other hand, exhibit typical examples of top-down strategies. In recent years, many cities in China have actively built smart city platforms, which emphasize public-private partnerships but are actually implemented in a top-down manner where the government leads the initiative, engaging public corporations and private capital.
In the case of South Korea, the national government enacted the Framework Act on Resource Circulation in January 2018, under which it has begun building a circular economy. Mostly, the circular economy models have taken a typical East Asian-style top-down approach. In fact, almost all other South Korean projects, not just the circular economy initiative, (e.g. urban restoration, tourism hub cities, village revitalization, smart cities, etc.) are government-led projects with a short-term perspective. Since the residents that actually suffer from the issues that is, the citizens, do not lead or directly engage in the projects, most of the issues fail to be resolved or end up involving short-term solutions, if any, often causing even more serious problems.
Amsterdam is one of the cities that has driven the circular economy the most systematically in the world, and its strategy is well illustrated in the report titled “Circular Amsterdam” published in April 2016. This report is deemed a gateway in the construction of Amsterdam’s circular economy because developing the report itself relates to the fact that diverse agents that is, diverse stakeholders, gathered together at the city level to discuss and reach consensus on the reason why building a circular economy is needed and what change and profits are created with a circular economy established. The Amsterdam case shows that it is important and necessary for the citizens to build empathy through engagement, going beyond participation, rather than being “told to do it” by the central or local governments.
In the case of South Korea, China and Japan, it is the national government that presents the documents and identifies the issues. The national government also develops appropriate projects and distributes necessary resources through open public bidding. To win a bid, local governments essentially prepare a business plan that has the possibility of winning, rather than resolving substantive problems and helping the locals in the long-term. Even if a local government wins the bid, it tends to invest its budget in the projects that are likely to bring about tangible outcomes that is, those with a higher probability of success in a limited period, because the national government urges the local government to spend the subsidy within the given time. As this vicious cycle continues, all local projects end up being one-offs with little actual benefit to residents, despite the huge investment at the national level.
The city of Amsterdam concretely realizes the circular economy model in two areas: construction and food waste. The two fields were selected because the city government, universities, research institutes, civic groups, enterprises, expert groups, and ordinary citizens discussed and concluded that those two fields are the most urgent and are the areas where the most effective policies can be made. In other words, it is distinctive in the Amsterdam case that the decisions are not made in the top-down fashion. Rather, the stakeholders, who suffer from the problems and side effects of the linear economy, engage in deciding the sectors where the circular economy model can be realized first.
In terms of food, Amsterdam launched a project to reduce organic residuals and recycle them into animal feed, biofuels, or bioplastics. Therefore, the project corresponds to “recycle” in the 4R model (reduce, reuse, recycle, and recover). In the current stage, it demonstrates an example of diagnosing a problem with consumption rather than production and establishing policies to improve consumption. However, the project seeks to new value and business opportunities. For reference, as of 2014, 97% of organic residuals from households in Amsterdam are incinerated and recovered as energy, and only 3% are reused or recycled for other purposes.
Specific city policies include: 1) developing a comprehensive system for the separate collection of garbage and building a smart central hub to manage the system 2) distributing a manual for separate garbage collection to 430,000 households and grocery processing plants based on reclaimed land within the city and 3) properly classifying food waste and recycling it into animal feed or biofuel. These policies influence the economy and related new industries as follows: 1) An estimated 1,200 workers will be newly employed in the agricultural and food processing sectors 2) Profits from reduced feed income are expected and 3) The food processing industry, biofuel production industry, and feed industry are likely to be activated.
The initiative in the construction field aims to save resources and economic value by reusing or recycling materials in the construction process. Therefore, the emphasis is placed on the “reuse” and “recycling” elements of 4R. It is an example of raising issues and suggesting solutions in the production process that is, the construction process. In terms of consumption, the project attempts to shift to a system that consumes modular materials. This whole process is based on the important attempt called the “living lab” strategy, where residents, researchers or scientists, and various other agents such as companies and environmental groups gather to ideas through research, experiments, and communication, which are realized as policies. A representative case is the “Material Passport” program. It was developed in accordance with the Buildings as Material Bank (BAMB) project, managing the life cycle of all the construction materials by issuing them respective passports. Launched in 2015 with the support of the EU, 15 experts from seven EU countries operate the platform to manage building materials.
Most notably, the circular economy model is realized with the “living lab” approach in the Amsterdam case. “Living lab” literally means a “living laboratory,” indicating an innovation mechanism that solves the problems of a certain region by direct engagement of the locals. It is different from the existing innovations in that when developing new technologies or policies, people who will use them engage in such development and lead the process so that the technologies or policies that are absolutely necessary for the society can be developed. To be successful, the “living lab” strategy requires a platform, or “playground,” where stakeholders gather to identify shared problems and consider solutions. In Europe, where the “living lab” approach is most actively adopted, the European Network of Living Lab (ENoLL) plays this role. Members of ENoLL are allowed to browse many creative experiments and engage in them.
The most frequently emphasized phrase concerning the circular economic strategy of Amsterdam and the European is “The governments of the future do not direct but bring parties together.” The phrase represents the idea that governments, especially local governments, serve to provide and manage the platform for innovation, while actual innovation takes place through the voluntary and free interaction of various agents in the region. In other words, the city government serves as a coordinator, and the concrete action plan for the circular economy is established by bringing together research institutes, universities, enterprises, individuals, and experts to share diverse perspectives and produce skills and knowledge. “Playgrounds” are important because people from diverse backgrounds can share information and ideas, and even accumulate knowledge about experiences of failed projects. Thus, when looking for a technical or knowledge-based alternative to a particular problem, it is easy to identify the efforts that have previously been made to solve the problem.
Amsterdam Smart City (ASC), established in 2009, is Amsterdam’s representative “living lab” platform. ASC specializes in the six areas of energy, mobility, circular economy, infrastructure and technology, governance and education, and citizens and living, accumulating ideas for the circular economy using the living lab method. ASC is an innovative online platform where citizens, businesses, knowledge organizations (universities or research institutes), and administrative agencies come together to freely exchange ideas and opinions and to organize projects. It exhibits the typical form of public-private partnerships in the search for solutions to social, economic, and environmental problems in Amsterdam, and international agents also engage in the platform. The basic principle that motivates the platform is “learning by doing.” This means that innovation is not achieved by going a certain way toward a certain goal, but through trial and error.
ASC also claims that technology is important but technological innovation is not the end in itself. It aims to solve real problems through innovation and vies the entire process of diagnosing and solving problems as important, and that the most basic task is to a discussion structure where all stakeholders can communicate and agree. The platform is operated by six internal staff employees and 11 from outside the platform. The external staff members include 11 program partners who work full-time, one from each of the partner organizations (enterprises, corporations, and others). Financing is provided by these 11 participating agencies, alongside the contributions from the city government. Currently, the platform has some 7,000 members. Members can access a variety of information, share their interests, form an organization with people with similar interests, and more easily start their own projects. A project begins when an investor is interested in it.
Jeju Island is South Korea’s representative island and an international tourist destination. Hence, as mentioned above, Jeju is one of the regions that has experienced the same problems as some other islands worldwide and that urgently needs to move towards a circular economy. The transition to a circular economy has two prerequisites. First, the transition should not be led by the government and citizens should identify shared issues and try to build the circular economy themselves. Second, a “playground” or platform should be created where people can share their problems, ideas and experiences. After identifying the problems, they should lead the development of the “Circular Jeju,” a document that can act as a gateway, as happened with the Circular Amsterdam document. Detailed experiments should be developed based on this document.
On Jeju, many similar attempts have already been made by civil society, including many examples of successful “living labs.” Important here is that if this information is not shared, it cannot be disseminated. The network such as the earlier-mentioned ENoLL in Europe must be established first, and the lesson from the European experience that should not be forgotten is that sharing stories of failure can reduce the cost of innovation.
SHIN Sangbum is a professor in the Department of International Relations at Yonsei University Wonju Campus. His research topics include China’s environmental politics, East Asian environmental policy, and international political economy and the environment. Recently, he has been working on some new research agendas such as circular economy, living lab and social innovation, and local self governance in Korea and Northeast Asia.