The need to rethink resources, as costs increase and they become scarcer while consumer demand increases, is growing. Innovations on many fronts, as well as regulations, are bringing new solutions. Companies need to re-examine their own supply chains and processes to eliminate waste, exploit the emerging opportunities, and rethink resources.
What is changing?
In 2006 and then in 2011 we published trend alerts highlighting the growing pressures to eliminate waste but also the potential opportunities in waste of different kinds. That need to eliminate waste – both in reality and as a concept – continues to grow; so too do the opportunities.
We continue to be wasteful as consumers and producers. One report suggests there will be at least 3 times as much global waste by the end of the century, if nothing changes significantly. Globally about one third of food is wasted in any one year – ranging from about 16% in the USA where over purchase is a major issue, to over 40% in some parts of Africa – where lack of good storage is a major issue. The resource and environmental implications of such vast mountains of waste present an enormous challenge.
More consumers will mean more demand, more resources needed and also more waste. Over the coming 20 years about 3 billion people will become consumers, albeit at a very low level to start with, at $10 per day. Frugal innovation, recycling as a way of life and earning a living, plus far lower overall levels of consumption globally balance out the west’s over consumption and wasteful ways, for now. As consumption levels in emerging economies grow, that balancing out will reduce.
Many critical resources, especially food, water and good quality agricultural land are under increasing pressure, and prices are rising. Others, such as oil, are not necessarily running out, despite previous discussions of peak oil, but are in increasingly inaccessible places, and costs of extraction are rising. If economic growth is to succeed, new cleaner and cheaper forms of energy are needed, as are less wasteful means of production of everything.
And there are causes for optimism.
Recycling and reuse have long been mantras of the environmental movement. And now issues such as food waste have moved rapidly up the policy and corporate priority lists. This awareness alone is a start. There is increasingly no such thing as waste, just an undiscovered resource or feedstock.
- Cities are producing waste protocols which encourage recycling and reuse by defining and categorising the quality of different waste derived materials; significant savings are already accruing.
- Decluttr will now buy, mend and re-sell almost anything that consumers want to get rid of; collaborative consumption is improving the usage levels of major purchases such as cars and household power-tools
- Reclaiming valuable metals and minerals continues to drive the growth of dumpster diving, waste mining and road-sweepings sifting. • The EU’s targets on packaging waste are seen as a major success, with most countries exceeding their targets already and showing recycling rates far in excess of the USA where regulations are weaker and more fragmented. The latest target is reducing plastic carrier bag usage by 80% by 2019, which based on current levels would still mean a total of 20 billion plastic bags a year in the EU.
- On a more focused level, individual developments include waste from coffee production being used to make gluten free flour; astronaut urine being turned into fuel; carbon dioxide becoming a feedstock for chemicals.
- New technologies such as synthetic biology are planning an increasing role in solving the waste conundrum and turning it into useable products. But the shift goes beyond eliminating waste, to finding cleaner, more efficient processes for every kind of production line from energy to food to chemicals to materials.
Water scarcity is a growing issue not only in emerging nations, but many parts of the west. Reducing water use with closed loop manufacturing systems is spreading and intelligent agriculture is enabling more efficient and targeted resource use. Cost effective desalination has been a goal for many years; here too technologies are improving and with them the market, with forecasts suggesting the desalination market could be worth in the region of $23 billion by 2018.
Energy technologies and economics are also changing. Fracking, for all its controversy, has turned the USA into a natural gas exporter, and is changing the global dynamics of the marketplace. Solar power is becoming increasingly efficient and its cost base is reducing. Its potential to provide clean distributed power across emerging economies could transform lives as no other technology has, with far less energy loss via transmission. Likewise, battery technology is improving in leaps and bounds, making renewables and cleaner energy sources for transport more viable leaving petroleum for higher value products. For example electric and hybrid cars have now been joined by the first electric plane, with electric jumbo jets the target in 20 years.
Companies are investing heavily in greening supply chains, continuously re-examining the opportunities for reducing resource use, eliminating waste and emissions as well as lowering costs. Consumers increasingly expect sustainability and low prices. The planet needs us to find new means of production if we are not to damage our climate irrevocably. Rethinking resources will be a critical path to meeting those expectations.
We are moving to an increasingly integrated and closed loop economy, where bi-products – what was formerly waste – become valued. At the same time new technologies are driving an energy production and manufacturing revolution. It will need new approaches to process, infrastructure and system design, urban planning and city development, as well as consumption patterns.
The question for management will be whether to lead and shape the changes in approach and the markets, or to wait and follow the leaders.
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