A presentation on the emerging circular economy

1. NBI Thought Leadership Series
17 August 2017 C i r c u l a r E c o n o m y : T o w a r d s a w o r k i n g u n d e r s t a n d i n g
Sherman Indhul sherman.indhul@gmail.com

3. D a m e E l l e n M c A r t h u r
Watch Ted Talks Video

4. T h e G r e a t A c c e l e r a t i o n
Source: igbp.net | Steffenet al., 2005, Global Change and the Earth System, Springer, pp. 132-133

5. P l a n e t a r y B o u n d a r i e s
Source: Credit: F. Pharand-Deschênes/Globaïa

6. ‘ T h e b e s t w a y t o p r e d i c t t h e f u t u r e i s t o d e s i g n it’ Buckminister Fuller
Read more:
WBCSD 2050 Pathway
CPSL Tools and frameworks
(Backcasting)
Design Thinking
Scenario Planning

7. T h e C i r c u l a r E c o n o m y
PROSUMPTION
PRODUCTION
CONSUMPTION
Read more:
http://www.ellenmacarthurfoundation
.org/circular-economy
http://www.stockholmresilience.org/2
1/research/research-news/1-15-2015-
planetary-boundaries-2.0---new-and-
improved.html
Sustainable European Research
Institute (2010), reported in the UNEP
Green Economy Report 2011 Page 16
World Economic Forum: Towards the
Circular Economy: Accelerating the
scale-up across global supply chains
World Economic Forum: Towards the
Circular Economy: Accelerating the
scale-up across global supply chains
World Economic Forum: Mining &
Metals in a Sustainable World 2050
… shift in flows of financial value as evident by a decline in market capatilization of global consumptivevalue chains and growthin market capitalization
of restorativeand regenerativevalue chains.
Shifting from linear… …to non-linear flows

8. recycle
reuse
reduce
T h e C i r c u l a r E c o n o m y

9. T h e C i r c u l a r E c o n o m y
Critical uncertainties
Circular
Economy
Driving forces
 The global value chain is
vastly consumptive.
 There are emerging
regulations especially in
OECD countries to transition
to restorative value chains.
This will influence global
value networks, digital
technologies are expected
to be a primary enabler.

10. T h e s t r u c t u r e o f t h e g l o b a l e c o n o m y i s u n d e r g o i n g
f u n d a m e n t a l c h a n g e s
Japanese circular economy efforts followed a three-pronged approach summarized
as follows:
 Structural adjustments to reduce dependency on oil as a single energy source, and optimize industrial
structure to improve the efficiency of energy utilization within industries.
 Legislation for environmental policies such as:
 Law for the Promotion of Efficient Utilization of Resources, ratified in the year 2000
 The Law on Re-utilization of End of Life Automobiles, which came into force in 2002
 Increasing societal participation through education and public awareness campaigns.

11. T h e s t r u c t u r e o f t h e g l o b a l e c o n o m y i s u n d e r g o i n g
f u n d a m e n t a l c h a n g e s
In 2008 China formalized aspects of the Circular Economy concept in a Circular
Economy Promotion Law. Provisions included:
 Monitor energy consumption and pollution emissions in heavy consuming and polluting industries including
the steel and non-ferrous metal production, etc…;
 Promote recycling and improve energy-saving and waste-reutilization standards and develop policies to
divert capital into environment friendly industries;
 Transition to clean energy, such as natural gas and alternative fuels;
 Adoption of renewable products;
 Enterprises to recycle and make comprehensive use of waste materials (focused on bio-energy).

12. T h e s t r u c t u r e o f t h e g l o b a l e c o n o m y i s u n d e r g o i n g
f u n d a m e n t a l c h a n g e s
Key findings from Europe Circular Economy Report include:
 Benefits of €1.8 trillion by 2030;
 Increase average disposable income by €3,000, translating to an 11% GDP increase by 2030;
 The cost of time lost to congestion would decrease by 16% by 2030, and close to 60% by 2050;
 Carbon dioxide emissions would halve by 2030;
 Primary material consumption could drop 32% by 2030 and 53% by 2050; and
 65 reviewed academic papers point to the positive employment effects occurring in the case that the
circular economy is implemented

13. The decoupling of resource utilization from economic growth is
signaling that the transition of the global economy is underway

14. The pace of response to the decoupling of resource utilisation and economic growth is
EXPONENTIAL, market leaders are emerging…

15. The pace of response to the decoupling of resource utilisation and economic growth is EXPONENTIAL,
market leaders are emerging…
Renault
Market Cap $26.34billion
Renault is planning to upgrade lifetime-
dependent components to more durable and
easy recyclable materials. Renault’s disassembly
and remanufacturing plant at Choisy le Roi is the
company’s most profitable industrial site. It
reuses 43% of carcasses, recycles 48% in
foundries to produce new parts, and valorises
the remaining 9%. Making remanufacturing and
thereby upgradeability work at scale is likely to
become a key driver of OEM performance, once
more durable products are in the market.
Tesla
Market Cap $33.01billion
Tesla Motors, Inc. is an American automotive and
energy storage company that designs,
manufactures, and sells electric cars, electric
vehicle powertrain components, and battery
products. Tesla manufactures equipment for home
and office battery charging, and has installed a
network of high-powered EV recharge facilities
across North America, Europe and Asia. Tesla
entered the South African market in January 2016.
Tesla EVs going to
market with driverless
technology standard
Implications of reuse
and recycle on
upstream material
supply industries

16. Airbnb Market Cap
$31billion
Airbnb runs on a marketplace platform model
where it connects hosts and travelers and enables
transactions without owning any rooms itself.
The peer-to-peer hospitality site, launched in
2008, now offers rooms in more than 34,000 cities
worldwide. Airbnb’s customers research, reserve,
pay for, and review their lodgings—bypassing
traditional travel business models.
Uber Market Cap $68billion
Uber Technologies Inc. is an American
multinational online transportation network
company. It develops, markets and operates
the Uber mobile app, which allows consumers
with smartphones to submit a trip request which is
then routed to Uber drivers who use their own
cars. As of April 12, 2016, the service was
available in over 60 countries and 404 cities
worldwide. Since Uber's launch, several other
companies have copied its business model, a
trend that has come to be referred to as
“Uberization".
The pace of response to the decoupling of resource utilisation and economic
growth is EXPONENTIAL, market leaders are emerging and are being disrupted
Will “lyft” disrupt Uber?
Airbnb in discussion to
begin accepting
bitcoin..

17. G o v e r n i n g D y n a m i c s
Disruptions Hyper-connectivityPlanetary limits ConvergenceAccelerations

18. ‘ T h e b e s t w a y t o p r e d i c t t h e f u t u r e i s t o d e s i g n it’ Buckminister Fuller

19. N o p a r t o f t h e s y s t e m i s i m m u n e t o c h a n g e
Energy Security
Business Models
Convergence
Fragmentation
Funding
Energy System
Transformation
… based on access
to resources
Climate
Change
4th
Industrial
Revolution
… based on access
to technology
Oil and gas
companies
Technology
manufacturers
Power
developers
Liquids-fuelled
transport
Electricity
powered lighting
Diesel based
backup generation
Portable
batteries
Concentration of
power & ownership
shift from
scale…
…to agility
Decentralised, fragmentation
& intensified competition
Large players
Power market
participants
Public Markets
& Govts
Private equity Pension funds
Energy
companies
Prosumers
PAST FUTURE

20. N o p a r t o f t h e s y s t e m i s i m m u n e t o c h a n g e
Mining Transportation Processing Manufacturing Consumer
 Electric Arc Furnace (“EAF”) technology represented approximately, 60% and 42%
of the steel production markets in the United States and European Union
respectively.
 EAF growth trajectories indicate positive trends to future market penetration in both
regions.
 However China has made massive investment in Basic Oxygen Furnace (“BOF”) in
the last decade and a radical switch to EAF in unlikely in the short term.
Scrap steel

21. N o p a r t o f t h e s y s t e m i s i m m u n e t o c h a n g e
Mining Transportation Processing Manufacturing Consumer
ICE
EV
Autonomous
Autonomous EV
PE NSION
FUNDS Car Insurance ?

22. N o p a r t o f t h e s y s t e m i s i m m u n e t o c h a n g e
Mining Processing Construction Malls Consumer
PE NSION
FUNDS Property
Portfolio

23. N o p a r t o f t h e s y s t e m i s i m m u n e
Banking
Sector
Bank ABC
Consumer A
(Personal
Banking)
Consumer C
(Central
Banking)
Consumer B
(Retail
Banking)
Peer to Peer
Transactions
Ripple: Backed by
Google Ventures and…

25. A c k n o w l e d g m e n t s
Mr. Dave Collins
Dr. Gary Kendall
My core team at Transnet;
Dr. Daphney Ramaphosa
Mr. Cecil Musisinyani
As well as the many colleagues who volunteered their time to
participate in workshops leading to the SROA© Trends and
Innovation Report 2016

26. First comes thought; then
organization of that thought, into
ideas and plans; then
transformation of those plans into
reality. The beginning, as you
will observe, is in your
imagination
Napoleon Hill