CLIMATE CHANGE & CIRCULAR ECONOMY
Climate change presents new concepts as well as techniques to make a difference.
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The Science Behind Climate Change
Greenhouse gases trap heat in the atmosphere in a process known as the “greenhouse effect”. When photons (light particles) hit CO2 molecules in the atmosphere, they absorb the light, trapping the energy. Bonds between the carbon and oxygen atoms in CO2 bend and stretch to absorb photons. Eventually, it releases the photons, sometimes into space but other times back into the earth's atmosphere, where the heat remains trapped. CO2 molecules absorb infrared light. The incoming light from the sun is of shorter wavelengths, so they don't absorb it. However, when the earth re-emits the light, it has a longer wavelength in the infrared spectrum and is absorbed by CO2 molecules. Other greenhouse gases include water vapour, methane, nitrous oxide, and ozone.
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"The amount of carbon in the earth's system is fixed, but it keeps moving between the atmosphere, biosphere, geosphere and hydrosphere. We’re pulling out greenhouse gases from different sources and putting them in the atmosphere. The amount of carbon dioxide or greenhouse gases is increasing and forming a blanket around the earth that prevents the earth’s heat from escaping into space. The heat is reflected back to the earth. That extra energy that is being retained by the earth is causing climate change." – Rajan Mehta. |
Sources of Green House Gases (GHG)
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Fossil fuels like coal, oil, petrol, and diesel account for 70 per cent of the GHG, followed by industry (20 per cent). Heating in industry is a major contributor to global warming. Cement production accounts for 8 per cent of global emissions. The emissions come from using fossil fuels for heating at high temperatures and from the gases released from limestone during heating. Researchers have discovered a new technique based on electrolysis, which could eliminate thetwo emissions sources hamstringing the cement industry. It would use electricity for heating generated from clean and renewable sources. It would then use electrolysis to generate a reaction precipitating lime (calcium hydroxide), which can then be processed to produce cement.
Agriculture and land use accounts for 1-10 per cent. Forest clearing for agriculture and land use releases carbon dioxide when the trees are felled or burned and reduces the area's carbon absorption.
Key Problems with Climate Change
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Climate change faces two fundamental problems.
The first is the collective action problem, or what is known as the tragedy of the commons. Take a shared resource like a pasture to graze cows. As villagers graze more cows, it leads to overgrazing, and the quality of the resource deteriorates. This happens because each villager obtains all the benefits of grazing one more cow, but all share the cost of degrading the pasture, so it is divided; it becomes everybody's problem.The tragedy of the commons is often applied to explain the overexploitation of shared resources. It has also been appliedto climate change.
The earth’s climate is a global common. Everyone suffers if the climate is degraded. However, an individual reaps the full benefit of action contributing to global warming, such as the convenience gained from driving the car to the store.
However, there is one factor that differs for climate change. If I choose to reduce emissions, it means less pollution contributing to global warming. If I take action to reduce my emissions, it will result in a benefit as there will be less atmospheric heating. However, in the case of a pasture or a fishery, if I don't use up the extra grass or fish, the others will, so there is no beneficial effect. This is an incentive for a country to reduce its emissions. Additionally, emitting less can lead to technology developments that spread to other places and encourage others to pollute less.
The second problem is the time lag between the action and results. Climate investments are long term while companies look to show better profits in the short term. Asset management firms look at investment in a short time frame, such as quarterly results. This leads them to prioritise quarterly returns over long-term performance. Similarly, governments and politicians want to show results during their term.
Does Circular Economy (CE) have an Answer?
In a circular economy, things are made and consumed in a way that minimises resource use and reduces waste and carbon emissions. At the end of a product's life, the materials used to make it are reused wherever possible. This poses an alternative to traditional, linear economies that use resources and energy to make things and then throw them away, producing waste. In this take-make-dump model, the energy embedded in the product also goes to waste. A circular economy looks to eliminate waste. For example, electric vehicle batteries can be recycled. Fly ash produced by thermal power plants can be used to obtain rare earth metals.
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A circular economy ensures that the molecules that have been combined to create a product stay in circulation and in use for as long as possible. – Stephen Evans, Director of Research in Industrial Sustainability at the Institute for Manufacturing, Department of Engineering, University of Cambridge. |
Activists claim that when we eventually reach a full CE, the savings in terms of CO2 emissions will be significant. As per Prof Evans, in the UK, where the industrial economy is only 10 per cent CE, the transition to CE will bring in an almost 10 per cent increase in carbon savings, which is a significant achievement by any measure.
However, there are some challenges; for one, no company, even the large companies, cannot implement a circular economy on their own. So, if one organisation decides to take pre-emptive action, but the supply chain around it doesn't, then that could be a challenge for that organisation. It will be a challenge because it needs the material supply sector. The waste sector needs to change alongside it. And that simultaneous action is at the heart of why there is a policy question to be answered here and not just a simple question: If this is so economically sensible, why are companies not doing it today?
To implement CE, it is imperative to understand the basics of resource efficiency. Reducing the amount of raw material used to make current products with existing technology will not only add to profits but will prepare manufacturers to make their industry CE-compliant in its entirety. It will provide them with the knowledge needed to go to the next stage, which is to make their current products but with new input materials, whether they be the end-of-life products that are coming back via a waste-based supply chain into your factories or maybe with utterly new materials. For example, clothing materials can be replaced with biologically based materials, but they come from farm waste, like turning rice straw into clothing fibres. In the next 30 years, things like that will become more normal, which will be the emergence of a circular economy.
Resource efficiency or recycling parameters cannot be applied universally, especially in the metallurgical industry. As per Mr Richard Morgan, Director and Head of Public Affairs, Anglo American, whose company is one of the big material producers, even with the latest recycling techniques, you still wouldn't obviate the need for fresh, virgin materials if you like, from platinum root metals or for copper. The aluminium produced from recycling does not have the same properties as aluminium produced from oxide, and similar is the case with copper, which could be very dangerous for the electrical industry.So, there will still be a place for traditional mining activity. Recycling metals is not attractive to a big mining company, particularly because the barriers to entry are pretty low, and it doesn't have a great reputation as an industry. However, if the policy environment were to change, this industry, too, would be part of a conversation.
Today, there is a mad rush toward electric vehicles. Ola is coming up with a factory that will produce some 10 million units a year, which is equivalent to something like 15 per cent of the entire current global production of two-wheelers. However, all of those two-wheelers are going to be powered by battery technology, which is finite. After eight years, despite the positive impact that it will have through the use of EVs, you will have, by definition, a vast number of batteries that will become defunct, which will have to be recycled in some form or another.
Our lifestyles now rely on energy – whether it’s for electricity or AI and new technologies. Renewable energy, like nuclear energy, stands to play a critical role. Nuclear energy through fission is dangerous because it's difficult to control the chain reaction. Companies like TerraPower, backed by Bill Gates, are working on making it safer. They are also able to use spent fuel, so waste is reduced. Companies are working on reducing the carbon footprint of batteries for electric vehicles by making the battery last longer and by making it recyclable.
The Indian Context
The Indian industry is seeing a great deal of focus on electronics, with the government taking the lead in building a semiconductor fab in the country. India is producing close to 250 million to 300 million smartphones, and at some point in time, we may have heaps of electronic waste getting dumped. So, the country has a huge opportunity to see how it can be reused. As per industrial experts, one can extract close to 15 kg of Radium, 34 kg of gold, 350 kg of silver and 16 thousand kg of copper from about one million smartphones. A considerable amount of work is being done through the Ministry of Electronics Information Technology to sustainably produce and consume electronic products in the country.
By 2050, half the world's population and India's population will live in cities, and municipal solid waste could increase to about 400 million tons a year compared to the 62 million tons that our cities were generating in 2016. The reality is that about 70 per cent of that waste is disposed of in open landscapes without proper treatment or containment. But that represents an opportunity because about 50 per cent can be processed. India can look at technologies that do plastic paralysis and recycle and conversion of parallel oil back into the chemicals chain to effectively be reprocessed.
The same, of course, apply to agricultural waste. Today, agricultural waste is effectively burned, and it has the consequence of air pollution, which the entire Northern India suffers at the end of the year. CII has done path-breaking work on it by demonstrating across 300 villages the ability to extract the stubble, reprocess it into briquettes economically, and then offer that for sale.
Actually, India has quite an efficient and circular economy. It has probably to do with our genesis of being a largely closed economy for many decades. Culturally, we believe in using a thing till it breaks down, then repairing it and reusing it for decades.
Along with humankind, nature also contributes to solutions to the climate problem. For example, when a volcano in the Philippines erupted in 1991, it released 20 million tons of sulphur dioxide into the stratosphere, which cooled the earth by 0.5 degrees Celsius. This is because when sulphur dioxide enters the atmosphere, it reacts with water vapour to form droplets or aerosols that reflect light away from the earth.Solar aerosol injection (SAI) is a technique that shoots sulphur dioxide into the stratosphere to form a layer of aerosols that temporarily block sunlight. However, it remains controversial due to its uncertain impact on the climate and ecosystem. Its ability to freeze out a country could also be misused by state and non-state actors.
The Prognosis
As the world moves closer to a climate-friendly industrial policy, all industries will be measured across the whole value chain of their product. The current thinking is looking at the entire range of inputs to ensure that you have an ethical end product to market. The trend is now towards more responsible steel and copper, as investors and traders in the London Metals Exchange are closely looking at the full value chain. Then there is the issue of an ethical supply, such as the questions being raised on cobalt and other rare earths coming from the Democratic Republic of Congo from the human rights and governance perspective. The entire business is turning into a long-term strategic game
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There are six principles of frugal innovation that any organisation can adapt in order to gain from the sustainable, socially conscious technologies created by the start-up culture. The following principles work together to create a circular economy in which innovation is fostered:- 1. ‘Engage and iterate’ – allowing larger companies to mimic what startups do; 2. 'Flex your assets’ – permitting larger companies to be flexible while utilising their resources; 3. ‘Create sustainable solutions’ aimed at long-term changes; 4. ‘Shape consumer behaviour’ in order to effect the most profound long-term changes; 5. ‘Co-create value with producers’ to boost employee morale and productivity; 6. ‘Make innovative friends’ that cultivate a home-grown culture. – Prof. Jaideep Prabhu, Jawaharlal Nehru Professor of Business and Enterprise at the Judge Business School at the University of Cambridge and Navi Radjou, Silicon Valley Innovation, Leadership Strategist and Fellow at Judge Business School, University of Cambridge |
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