Circular Economy in Hong Kong , Asia, and Europe

1. Circular Economy in Hong Kong, Asia, and Europe

2. Introduction

3. OurEconomyToday … Produce Use Dispose

4. … is designed to produce waste…

5. … yetcouldworkdifferently • Working as Nature works: output (waste) = valuable input • In thisproposal we describehow we envisioncontributingto the realisation of the circulareconomy in Hong Kong. Source: EllenMacArthur Foundation

6. Circular Economy? • The circular economy is a generic term for an economy that is regenerative by design: • It solves the waste problem • Reduces scarcity of resources • Creates social, environmental and economic value • In the circular economy waste is a resource • All products are re-used or recycled after initial use • Waste = Valuable Resource = Wealth • And companies move from offering a product to offering services for which consumers use those products Rethink your business: Do your customers want to own a lamp of have lighting in their house? Source: WRAP

7. Circular Economy! Waste has a negative value in our economy. Smart people would change that into a positive value. In the world of these people, those who manage their waste in a smart way, earn most. The circular economy stands for this opportunity. In order to generate a waste free economy, the following major challenges are ahead of us; • How to design and produce products so regain the value of materials? • How can waste be seen as valuable by industry and consumers? What technical solutions will help us to regain the valuable stuff out of waste stuff? • What new business models can provide the ownership over the parties that will be most effective in recycling materials?

8. Circular Economy operates at three levels • Enterprises with cleaner production • Eco-industrial parks/ zones/industrial symbiosis • Integration of production and consumption at regional/international level

9. Kalundborg, Denmark Industrial Symbiosis Pathways Statoil Refinery A-S Bioteknisk Jordrens Liquid Fertilizer Sulfur Sludge Steam Municipality of Kalundborg District heating Water Coolingwater Boilerwater Steam Gas Energy E2 PowerStation LakeTissø Water Scrubber Sludge Wall-board Plant Sludge (treated) Steam Fishfarming Water Heat Pharmaceutical Cement;roads Fly ash Sludge (treated) Farms Recovered nickel and vanadium Yeast slurry

10. Product Life Cycle, Reverse Logistics and Circular Economy { { Upstream:Production Downstream:Waste management Extraction & Processing Distribution Manufacturing Consumption Collection Processing Disposal Point of Retail Sale Point of Discard Re-use Recycle Re-manufacture

11. Relevance of Urban Circular Economy to Hong Kong 1) It helps solving the waste problem: • Landfills full within a few years • Public opposition against the only large scale alternative: incinerators • Amount of waste higher than ‘peer cities’: Tokyo, Seoul, Taipei. • Almost no value added through waste processing in Hong Kong economy Source: Hong Kong Blueprint for the sustainableuse of resources’

12. Relevance of Urban Circular Economy to Hong Kong (2) 2) Matches Governmentambitions: • Blueprint forsustainableuse of resources • Targets in 2022: • 40% waste reduction (per capita) in 2022 • 55% off all waste recycled • More dynamic start-up community to boost Hong Kongs futureeconomy

13. Relevance of Urban Circular Economy to Hong Kong (3) 3) Could become a golden opportunity: • Earn money by transforming waste into resource • Pioneer innovative techniques and business models which could grow in mainland China and other regions as well • Creating a new powerful sector in Hong Kong by using existing expertise, infrastructure and capacity. Utilizing trade, finance and transport sectors. • Going from ‘importing’ foreign providers of solutions to creating a innovative sector in Hong Kong

14. Around the globe circular economy is taking off Examples from abroad: • World Economic Forum: “Business leaders in Davos keen to mainstream circular economy” 27, January 2014- The Guardian • Circular economy organisations in several countries connect major businesses, Academia, NGOs, governments and entrepreneurs • The first frontrunner multinationals incorporate it into their core-business and are starting to demonstrate serious business results • The potential is estimated to be huge: • The key supporters of the circular held out a prospect of a potential of $1tn in annual savings by 2025 and creating 100,000 new jobs within five years (source: Ellen MacArthur Foundation & MC Kinsey at the World Economic Forum)

15. Employment effects vary across primary, secondary, and tertiary sectors of a circular economy

16. Growth of Domestic material consumption (DMC) in Asia Source: West and Schandl, 2012. DMC refers to the apparent consumption of materials, i.e. intermediate and final consumption (DMC = Imports + Domestic Extraction – Exports).

17. Material Intensity in AsiaDMC per GDP (exchange rates at 2000 prices) Source: West and Schandl, 2012.

18. Asia’s Transition from agricultural to industrial metabolism Note: Domestic Material Consumption (DMC) by four main material categories, 1970- 2008, in million tonnes Source: West and Schandl2012

19. Asia is rapidly urbanizing: Over half of Asia’s population is likely to live in cities by 2026 Source: UNDESA 2011

20. Sharp price increases in commodities since 2000 have erased all the real price declines of the 20th century McKinsey Commodity Price Index (years 1999-2001 = 100) SOURCE:Grilli and Yang; Pfaffenzeller; World Bank; International Monetary Fund; Organisation for Economic Co-operation and Development statistics; UN Food and Agriculture Organization; UN Comtrade; Ellen MacArthur Foundation circular economy team

21. Commodity price volatility has risen above long-term trends in recent decades SOURCE:Grilli and Yang; Pfaffenzeller; World Bank; International Monetary Fund; Organisation for Economic Co-operation and Development statistics; UN Food and Agriculture Organization; UN Comtrade; Ellen MacArthur Foundation circular economy team

22. Asia is fighting an uphill battle on environmental pollution and resource deterioration Can Asia succeed in tunneling through the environmental mountain?

23. Some preliminary thoughts about the environmental dimension of Euro-Asian Transport Links

24. Additional evaluation criteria for Euro-Asian Transport Links • Economic efficiency (Current dominant criterion) • Energy efficiency and greenhouse gas emissions • Material efficiency (or resource productivity)

25. Environmental Dimensions related to the Euro-Asian Transport Links • Economic growth and resultant urbanization in the vast ecologically vulnerable regions along the Euro-Asian Transport Links • Effect on the environmental footprint of multinational corporations with their business spanning Europe and Asia (e.g. BMW) • Facilitating and accelerating the development of many critical natural resources along the Euro-Asian Transport Links • Circular economy as a promising approach to the sustainable industrialization and urbanization in the recourse-constrained (such as water-poor) regions • Facilitating the closing the loop in terms of resource consumption between Europe and Asia (in particular China)