We sat down with Ken to chat all things design and the circular economy for Melbourne Design Week.
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Ken Webster is a global thought leader in the circular economy. He has spent 8 years as the Head of Innovation at the Ellen MacArthur Foundation and is a Visiting Fellow at Cranfield University in the UK. An author of multiple circular economy titles including The Circular Economy a Wealth of Flows, his most recent book ABC+D Creating a Regenerative Circular Economy for all.
Emily Jones from the Sustainability Victoria’s Circular Economy Business Innovation Centre sat down with Ken to chat all things design and the circular economy for Melbourne Design Week.
What is one thing that is often overlooked but required for the transition from a linear to a circular economy?
The crucial role of making resource prices reveal the full cost (including environmental damage) up front. Currently, we subsidize fossil fuels and are paying for this through ongoing climate disruption.
International Monetary Fund suggests that all-in the global subsidies amounted to around $6 trillion for the year of 2020.
Secondly, a circular economy often involves more materials handling, more people which increases employment. We need to shift taxes away from people and towards resources and waste. Why are we taxing people so much and subsidizing polluting businesses?
It is a change to system conditions which will really speed the transition and encourage innovation.
One thing we do talk about a lot when it comes to the circular economy is innovation. For our audience to get a sense of what we mean by innovation in this context, are you able to give me an example? Perhaps your favourite innovation in the circular economy space?
Well, the circular economy, I often describe it as digital meets business models meets design and so the digital revolution has really opened up how businesses relate to each other, how businesses relate to the consumer.
One thing I always like to talk about is this heating, ventilation and air conditioning (HVAC) as a service now. Kaer in South Korea installs, runs, and sells HVAC as a service. You say how cool you want the building to be or whatever, it's outsourced and that means that Kaer can fine tune the equipment used, lower the bills for the building owner and make sure they're also making a good return because they're managing that equipment as manufacturers and in the best way possible. So it saves resources, lowers costs, extends product life and means you don't over specify HVAC because it's being continually tuned to what the building needs. Sometimes when buildings are built, they over specify heating and ventilation systems so they don't get any hassle later. This is an example of selling a service. Another one is selling lighting as a service. Schiphol Airport does that in lounge 3. They don't buy light bulbs; they just pay for the service of having so much light and it works in a way because you've got digital telling the suppliers how the system is running and notifying whenever anything needs replacing.
These are just two examples of innovation in a surprising way who'd think you didn't have to buy light bulbs, but you bought the service of the lighting. And who would think that you didn't buy the HVAC but you paid for it as a service.
What can businesses in Australia be doing now to prepare for the shift to a circular economy?
If as Walter Stahel, the godfather of the circular economy, says, the circular economy is an economic opportunity driven by innovation then that's good news.
Leading consultancies list opportunities such as product as service offerings and sharing economy - many of these are driven by digital.
I often use the quote that the circular economy is digital meets business models, meets design. Walter also says that survival in business is not mandatory! Preparation means knowing your business relationships B2B or B2C and being ready to think of them differently. Design is key to all this.
A circular economy is not about doing what we always do and recovering some stuff in a hopeful way, it’s about innovating and changing how we do business.
Examples of this include the development of new materials such as plastic substitutes made from agricultural wastes, or construction board from the same source + mycelium. Or thinking of HVAC as a service like Kaer do in South Korea.
Melbourne Design Week focuses on the power of design. What is the role of design in the transition to a circular economy? And What gaps do you see in how design is being currently applied.
The circle economy is by intention and design as Michael Braungart and William McDonough said over a decade ago. It is by intention. It is about thinking through the whole system so that you have got an economy which is not puzzled by the amount of waste but is looking forward to the opportunity to bring back nutrients. It's the idea that the economy is like a living system and that nutrients circulate through it instead of problem materials.
So, it is important to know ahead of time what you're doing. For example, there is a building in Holland that is designed from the start to be demountable. They've designed it from the start to have certain finishes which don't cause problems when things get repurposed. The other end of this is, we're going to need more data about what's in our buildings or in our products so that it can be something that can be recovered at highest value, and that isn't done by accident.
At the moment the situation is – “Oh look, we've got all this stuff. What are we going to do with it?” And somebody answers, “well, it's not our stuff, we just leave it to the municipality. We leave it to the government to fix it or something.”
That's not an intelligent approach because you're throwing money away. You're throwing opportunity away. Because if you could make it a nutrient rich flow, in the imaginary sense, there's added value to be had there.
So, it does start with design. I have spoken to a company where the people making the product never talked to the people who took back returns from customers where it wasn't quite right. They didn't talk to each other. This is how incredibly fragmented some businesses can be that they just live in silos just doing their bit. Whereas if it's a design led approach, it's end-to-end consideration.
It's challenging to achieve and it's not something we're going to do on Monday morning.
Your most recent book has a focus on regeneration, the Ellen MacArthur foundation also includes regeneration as a core principle behind the circular economy. What is meant by regeneration and how important is regeneration for achieving a circular economy?
Originally the phrase was a ‘circular economy is regenerative and restorative by design’. That came from McDonough and Braungart, because in the circular economy diagrams, there's usually two cycles.
One is for technical materials, you know, the familiar stuff, steel, and plastics and all the rest of it. The other is in the biosphere, the woods, food, all of those things.
Now you can't regenerate steel, you can't regenerate technical material. Regenerative means taking those things which relate to the biosphere and also to the community, because you can regenerate social capital - you can improve the quality of life to make it a more thriving economy as far as how people experience it.
So regenerative by design is hinting at rebuilding natural capitals, soils, forests, fisheries, whatever, and rebuilding communities. That's really important for 2 reasons.
One, it suggests living systems. Again, the word regenerative relates to living things. It can't be about steel, it's about rebuilding those capitals.
It’s also talking about scale in a way, because to have a regenerative economy, it means top to bottom. It doesn't mean just those big firms that are moving large amounts of stuff around the world. It's about everyday communities, everyday opportunities to increase the amount of production, consumption, and exchange in a circular way, enriching local economies by enabling them to get involved in the circular economy. And so, it's top to bottom and it hints at capital rebuilding.
Walter Stahel, I always quote him as a sort of godfather of the circular economy. He's always saying that circle economy is an economic opportunity, but it always must be top to bottom. It's not a way of saying let's reinforce the power and influence and control of the very few firms that dominate say something on the technical side. It's supposed to be part of an overall solution to many of the current crises of climate change and so on, but also to add value with what we have and circulate it both locally and regionally.
So regenerative by design says, let's concentrate on rebuilding capitals, because that's where the difference is. The linear economy is take, make and dispose and degenerate capital. The circular economy is supposed to be about capital maintenance, so that we have an effective flow which doesn't degrade the capital on which we all depend.
Watch Ken Webster's keynote presentation for Melbourne Design Week.
[Opening visual of slide with text reading ‘Melbourne Design Week’, ‘Designing the Circular Economy’, ‘Ken Webster’, ‘Director, International Society for Circular Economy’, ‘Presented by NGV and Sustainability Victoria’]
[The visuals during this video are of Ken Webster speaking to camera about slides being shown on screen]
Hi there. My name’s Ken Webster. I’ve worked in the circular economy arena for around a dozen years now and I was very happy to be invited to say a few words about Design Week and the potential for the circular economy.
I’m going to dive in quite deep for just one slide because I think we need to know the context before we settle down into particulars. And this first context is almost like a circular economy in just one diagram because it shows where we are now with a linear economy that is famously take, make, use and dispose and it’s powered by cheap energy and cheap credit in search of economic growth based upon throughput really.
It degenerates natural and social capital and in a way its lifetime is limited. It’s quite impossible to continue that. So what’s the alternative? Well, designers like Braungart and McDonough quite some time ago wrote Cradle to Cradle. There’s been work on industrial ecology of course. There’s been work on what Gunter Pauli called the Blue Economy trying to use insights from living systems to look again at how the economy might work.
And the second part of that slide is really a distillation of at least a couple of elements of what a circular economy in a big picture way looks like. It works from renewables very largely and energy efficiency. It works in two cycles because Braungart and McDonough always saw material flows almost like nutrients. They have to feed the system. So, they continually asked what’s next for this product component or material? We really don’t know what a money system would look like in a fully circular economy and we don’t know the nature of economic growth in that system. It's likely to be qualitatively different.
So that’s the big picture except to say that the circular economy is about rebuilding and enhancing natural and social capital. So, it’s capital orientated rather than degenerating capital. So it’s very much a positive idea and a positive outcome.
In the next slide we can see how things are really done at the moment by and large. In this slide it’s a sort of waste-to-waste economy. The design of the product isn’t changed but there is some effort to recover materials or components or to perhaps extend the life of the product somewhat. But it’s really a detour to the dump to pick up another phrase that Bill McDonough is often seen to use. It’s a detour to the dump. That isn’t redesigning products and components and materials for a circular economy.
The next slide looks in more detail at what is usually described as the butterfly diagram. This takes those two cycles of materials which can be reordered through the living systems on the left and those which require human input to reorder and to maintain capital quality, to maintain value. And the bigger the line on the right-hand side is the greater the potential for increased revenue, increased value of that product described through the process in which it’s engaged. And of course, you can see that recycling is really a loop of last resort and that’s something very pertinent I think for this week.
Moving on just very quickly there’s no real problem around carbon dioxide emissions in a circular economy because as a valuable material they will be integrated back into the soils and into natural capital. Well, that’s the idea. And it shouldn’t be seen as a sort of approach to minimising CO2. Rather it’s about making sure it works in an appropriate cycle. We want to move towards renewables in any case and a circular economy should reduce emissions. But it’s not just an environmental response. It’s a business response which also does those very positive environmental things.
So just a reminder. Drees and Sommer whose slides I’ve been using thus far very much see that the next industrial revolution or the one that we’re in is a circular economy one because it’s about a nutrient economy. We’ve been through the other four elements of industrial development and now it’s time to design for the whole loop. And part of that design will be knowing what materials we’ve got. A huge part of the design is in designing materials data management, about who’s got what, where it is and who’s got the obligations to do exactly what with it. We can’t do that without a very large input of effort from digital designers.
Here is a slide that illustrates Circularise. They are a Dutch start-up making rapid progress on finding something useful to do with the blockchain and it’s all about enabling a chain of responsibility around materials which involves sharing information without ruining the business’s right to some proprietary knowledge.
And how far this circular economy revolution is reaching is how far the design revolution is reaching really. We have to imagine buildings, we have to imagine materials very differently. And there are just two examples here. We’re able to build high-rise according to Cradle-to-Cradle criteria, a set of criteria that makes sure that all the materials involved in the building fit the cycles as described. And secondly let’s get away from the use of plastics in some areas. Let’s really focus on new materials that will do the job and yet fit in the biocycle, so developing packaging which is based on agricultural waste, building boards made from using agricultural waste and mycelium. These are all ideas which are current.
And so I wish you the best for the week and let’s keep design to the fore and let’s keep the focus on how what is designed fits the system and how we might have to redesign the system. Thank you very much.
[Closing visual of slide with text reading ‘Designing the Circular Economy’, ‘Presented by’, ‘NGV’, ‘Creative Victoria’, ‘Major Partners’, ‘Mercedes (logo)’, ‘Telstra (logo)’, ‘RMIT University’, ‘Media Partners’, ‘Broadsheet’, ‘ARCHITECTUREAU’, ‘Event Partners’, ‘Sustainability Victoria’, ‘Built Environment Declares a Climate and Biodiversity Emergency’]
[End of transcript]