Climate Change and Circular Economy | 2019-05-11 |


Climate Change and Circular Economy

Dr Kanan Purkayastha

11 May, 2019 12:00 AM printer

Climate Change and 
Circular Economy

Dr Kanan Purkayastha

The climate has a profound influence on our daily life and has shaped the history of life on Earth. We are living in a warming world now. Records of thousands of weather stations across the world and ocean data show that the temperature measured at the Earth’s surface has increased substantially over the past century and especially over the last fifty years. Certain regions have seen much more warming than others. In addition to natural factors such as strength of sun, the impact of volcanic eruptions and natural climate cycles, manmade factors such as industrial emission are changing our climate dramatically. One of the effects of this change is extreme weather events such as heat waves, droughts, floods and storms, which can cause major damage and disruption with large financial costs and sometimes loss of life. The Earth’s climate has always changed in the distant past. However the scale of current change is different in comparison with past change. The scientific evidence shows that the dominant cause of the rapid warming of the Earth’s climate over the last half century is the increased amount of greenhouse gases in the atmosphere. The sources of such gas are the numerous human activities. As an example, at the start of the industrial revolution, the level of carbon dioxide in atmosphere were about 280 parts per million. By June 2018, the level of carbon dioxide recorded in Halley Research Station in Antarctica, which is far from sources of pollution exceeded 400 parts per million. So, emission to atmosphere from human activities needs to be controlled. 

In order to adopt a controlled strategy for manmade activities, we should realise that our planets and its ecosystems run through different cycles such as water cycle and carbon cycle. Everything can be recycled and reused. In fact in Nature there is no waste. But in a society we take resources, make products, use them and dispose them as waste. This is a non circular way of doing things and sometime can be seen as a linear economy. Using new technology, designing products differently and planning for a zero waste, as nature does, we could create a circular economy. In circular economy we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each life cycle. Research suggests that half of the worldwide greenhouse gas emissions are associated with producing basic materials. So there is a clear role for circular economy. But in order to implement circular economy we also need to address social welfare. We should recognise that human capability is influenced by environmental diversities.

In his book “Collective Choice and Social Welfare” Amartya Sen argued that there are at least four different sources of variation that can be related to the conversion factors of changing income to capability, where capability means to live an acceptable life. These are: (1) Personal heterogeneities, (2) Environmental diversities, (3) Variation in social climate and (4) Differences in relative deprivation connected with customary patterns of consumption in particular societies. My interest lies here about environmental diversities such as living in a storm prone or flood prone area. In dealing environmental problem Sen argued that “the threats that we face call for organised international action as well as changes in national policies, particularly for better reflecting social costs in prices and incentives. But they are also dependent on value formation related to public discussion, both for their influence on individual behaviour and for bringing about policy changes through political process.” In order to translate this into action one example is to go for carbon reduction policy using high carbon pricing through a functional markets. An alternative is regulatory intervention through banning certain carbon generating activities. Besides this two policy implementation paths other option is “do nothing” and allow our earth to warm up. So, I argue that in order to implement a circular economy strategy we also need to take account of environmental diversities that are already prevailing in our society. This is a micro level thinking. In macro level, we might consider other strategy such as “Green GDP”.


Nobel laureate Joseph Stiglitz introduced the idea of Green GDP account in Clinton administration. According to Stiglitz Green GDP reflects the depletion of our natural resources and the degradation of our environment. But we know that coal industry used influences in congress to threaten to cut off funding for those who engaged in defining Green GDP. Even though it was not implemented, we have noticed with great concern that there was a misalignment between social return in terms of environmental deterioration and private rewards.  So, we need to learn lesson from this past experience. In this regard I want to raise my voice as Stiglitz did, “In democratic societies even given the power of the wealthy to control the media and shape perception, it is impossible to completely suppress idea. And when these ideas resonate with so many citizens, they can take on a life of their own.”  So, in order to implement circular economy designing products and assets with low carbon material selection and minimised resource use throughout the lifecycle in mind is not enough. Sen’s variation of human capability in terms of environmental diversity should also be recognised within such economy.

Banking sectors can play a vital role by shaping financial landscape using the concept of circular economy. In order to do that banking sector should focus their priorities and realigned the credit facility from “take, make, use and dispose” option to “reduce, reuse and recycle” option. This decoupling approach of growth from resource use could be an important driver in circular economy. Climate change, circular economy and role of banking sectors are interrelated.

Peter Frase in his book “Four Futures: Life after Capitalism” suggests that “the real question is not whether human civilization can survive ecological crises, but whether all of us can survive it together in some reasonably egalitarian way.”  Frase opined that the extinction of humanity as a result of climate change is possible but highly unlikely. More plausible is the collapse of society and a return to some kind of pre modern new dark ages. Do we want this? Probably we don’t.


The writer is an academic, environmentalist, columnist and author