Essay eleven: Circular economies and renewable resources
Leather and the circular (or Blue) economySerial environmental entrepreneur Dr Gunter Pauli sees renewable resources everywhere and continually puts his weight behind business ideas for the future, creating jobs without depleting the planet’s resources. His vision can help tanners tell a powerful story of being the most experienced proponents on earth of the reduce, reuse and recycle mantra.
Dr Gunter Pauli’s inventiveness became evident as soon as his university days were over and he started work. His first big breakthrough was at Ecover, now a global brand with a wide range of ‘green’ detergents, which he helped to rescue from financial difficulties in the 1980s and for which he left an eye-catching environmental legacy, including one of the greenest buildings in Belgium, staff bonuses for commuting by bicycle and a workers’ agreement to wear company-provider Patagonia baselayer clothes in winter to keep energy bills down. Green thinking has never really been enough for Dr Pauli and in 1994 he set up Zero Emissions Research and Initiatives (ZERI), a diverse group of thinkers, but also of doers. ZERI is a network of researchers, searching constantly for what the founder calls “very pragmatic solutions to things that we know can be solved now”.
In 2009, he came to put many of the group’s early solutions into a book entitled ‘The Blue Economy’, highlighting 100 innovations that he believed could generate 100 million jobs in ten years. He calls it blue because it goes beyond green, but says people can use any colour they like in the name. He says he has fallen short of his original plan, having generated from the first round of ideas “only” 3 million jobs (and $4 billion in investments) from 200 projects. Underpinning all of them is the idea of using as fully as possible, but always in the most sustainable way, the materials and resources we have to hand. For as long as people on earth want to eat meat, the leather industry will have a strong claim to be a fine example of how the Blue Economy can work, taking another industry’s waste material and adding high levels of value to it, while creating good, honest work for thousands of people around the world.
BrainwashingIn December 1997, following the third United Nations Climate Change Conference (COP3), Gunter Pauli was given the task of drawing up a business model that would be in keeping with the Kyoto Protocol, the treaty that came out of COP3 committing governments to reducing greenhouse gas emissions. “When I made my presentation, there were four people in the room, me included,” he says now. “No one was interested in changing the business model. You can change technologies and processes, but what is really required is a change in the business model. We’re brainwashing all these MBAs to think in exactly the same way: core business with core competence, lower marginal costs, high productivity, low labour costs, just-in-time and economies of scale and, of course, great supply chain management. That’s what we’ve all been doing for 30 or 40 years and the result is that we have massive youth unemployment and communities that are dying because everything is globalised.”
Job generationIn the next 20 years, there are only ten countries that will generate net jobs, Dr Pauli estimates. He says: “That means the other 206 countries in the world will be losing jobs. Welcome to the world of globalisation.” He says again that what is required is not a different way of conducting business in the same old way, but a new logic. Companies have not just to come up with ideas, but to do things, to add value, so much value that they will “outcompete everyone”, but not on cost. His latest book ‘The New Blue Economy’ is a revised version of the original, which has the aim of highlighting 200 blue economy projects that have already been implemented. He insists this is only scratching the surface.
He feels a truly green economy (“good for the world, good for business”) has struggled to break through in more established economic environments because green products are too expensive. “Whats’s good for us should be cheap or free,” he insists. “What kind of economy is it if what’s good for us is expensive and what’s bad for us is cheap? This is madness, but this is also why business schools never invite me to give talks to their students, and they’re right not to because I exist to upset their way of doing things.”
The cheapest raw material in the world
Examples of the projects he is involved in at the moment include Novamont. This company, of which Gunter Pauli is chairman, based in Novara in northern Italy, has set itself the mission of developing materials and biochemicals through the integration of chemistry and agriculture, by starting up state-of-the-art biorefineries in agricultural communities. It wants farmers to be able to make the most efficient use possible of all their resources throughout the entire lifecycle, generating social, economic and environmental benefits.
Novamont refers to its biorefineries as “third generation”, which means they are dedicated to the generation of high-added-value products from biomass; Novamont has bioplastics firmly in its sights. One of these facilities is already in place at Porto Torres in the north of Sardinia. It’s on the site of a former petrochemical plant that was processing two million tonnes of petroleum per year to produce 700,000 tonnes of chemicals. “That’s not resource-efficient,” the Novamont chairman says. “Instead, we decided to use thistles. There are 360,000 tonnes of thistles in Sardinia alone because the European Union has been paying farmers there not to farm and what you get when you don’t farm is weeds, including thistles. The thistle is the cheapest raw material in the world: you don’t have to plant it, you don’t have use pesticides; the only thing you have to do is harvest it. Shale gas will never compete with us. Petroleum is a joke for us.”
Novamont’s thistles are yielding lubricants, natural herbicides that have a commercial value, but also polymers. Waste from the thistle-refining operations is 20% of volume, but, unlike the waste output from most chemical factories, it can all go into animal feed. The company has now taken over six former petrochemical plants in different parts of Italy; it’s raising the investment it needs to transform them all into third-generation biorefineries that will bring benefits to all, while employing people at unionised European chemicals industry rates. Its costs are a tenth of those of other industrial biotechnology companies.
Rock, paper, valueAnother venture is stone-paper, which, as the name suggests, is paper made from stone: it’s 80% stone and 20% polymers that Dr Pauli is working to make from thistles. A factory in China (“Europe wasn’t prepared to play along”) will make one million tonnes of stone-paper there. He wants this figure to reach 25 million tonnes a year; this would offer substantial savings in water compared to conventional paper production, which Dr Pauli says requires 60 tonnes of water for every tonne of paper manufactured. His new process uses no trees, no water and the paper is recyclable for ever. “People say this is fantasy,” the innovator explains. “They simply don’t believe it’s possible: that’s how stuck we are in the business models of today.”
Coffee is another passion: not drinking it so much but rather using the waste to farm mushrooms. ZERI has helped set up 3,000 farms producing mushrooms in coffee waste. The network’s founder says he thinks this is a failure. “We should have 500,000 of these farms,” he insists. “Nestlé produces millions of tonnes of waste from its instant coffee production. That would make millions of tonnes of mushrooms.” Nestlé could generate 600,000 jobs from this, he continues. By the end of October this year, he says ZERI’s open-source approach and commitment to sharing its science and practice has taken the total number of Blue Economy mushroom initiatives around the world to 3,500.
He is an admirer of Singtex, a Taiwanese technical textiles manufacturer that launched S-Café in 2009, a yarn that includes recycled coffee grounds, which the company says imbues textiles spun from the yarn with odour-control, quick-drying and UV protection functionality. ZERI projects that S.Café has inspired include coffee-enhanced nylon 6 for carpets to make rooms odour-free, because the coffee absorbs bad odours. It’s also going into polyurethane in refrigerators to make refrigerators that absorb odours and into paint to make paint that scatters UV. Adidas, Puma and Patagonia are big brands that have switched on to the possibilities here, he says, of putting coffee-enhanced yarns into their clothing and possibly footwear. Automotive companies can do something similar with their car interiors, he believes.
Chemicals from thistles, paper from stone and food from coffee waste are all examples of what can happen in a circular economy. ZERI is working on plenty of others.
Change the worldThis autumn of 2015, Dr Pauli accepted an invitation to address the Tesla World event, an unofficial conference organised not by Tesla Motors but by its fans and owners in Belgium, Dr Pauli’s home country. He was happy to take part because he feels he and Tesla Motors chief executive, Elon Musk, share a desire to be involved in things that can change the world. Dr Pauli admires many of the products that the leather industry contributes to, calling bags, for example, humankind’s greatest invention ever. Not because bags now constitute an industry worth billions, but because having bags fashioned from animal hides in which to store food enabled our early ancestors to collect and transport (hands free) 15 times more food than it’s possible to eat in one day. He likes silk too and wants to push global production to one million tonnes per year from current levels that are closer, he claims, to 100,000 tonnes (up-to-date figures are hard to come by but during the United Nations Year of Natural Fibres in 2009, it said global production levels had been at 100,000 tonnes in 2000 but had risen to 150,000 in 2006). “This has nothing to do with Hermès or fashion,” he points out. He admires silk’s renewability and natural antimicrobial properties and bemoans its substitution by synthetic materials derived from petrochemicals.
“We need artisans,” he says. “Sometimes people say there is no demand any more for what artisans can do, but let’s generate demand. It is just a question of communicating. Let’s regenerate a culture of artisans using natural materials. Consumers can be transformed into agents for change.” He wants consumers to get behind a new initiative he supports in Peniche in southern Portugal, using ultrasound on specially equipped fishing boats to pick out from every catch any female fish carrying eggs and returning them to the sea. The boats produce air bubbles that make fish in the vicinity float towards the surface, where they are pulled into the hold by suction.
The boats are energy-saving and employ twice as many people as before and make three times as much money, he says. Extra jobs have come from carrying out filleting, quick-freeze processing and extraction of most value-add products on board. Saving skins for making fish leather is not part of this yet, but could be one day. “Fish skins make great leather, of course,” Dr Pauli says, “however the key is to save all females with eggs.” He insists that the fishermen of Peniche will only ever be at sea for 12 hours at a time and will always sleep in their own beds. “You never meet a fisherman with a son who wants to be a fisherman,” he muses. “That has to change. We need fishermen, but we can’t consign people to a life that feels like slavery.” The European Commission refused to give his Peniche proposal the time of day, saying that all it wants is to put in place quota policies that work, but he says the king and the government of Morocco have shown substantial interest.
The circular (or blue) economy has ethics at its heart, Dr Pauli concludes, but it also points towards better productivity and cash flow, jobs growth and innovation. “It’s got everything,” he says. “When people carry out projects of this kind, they feel good. We need the transformation. We cannot have an economy in which 40% of the people on earth have to subsist on $3.50 per day or less. We are fooling ourselves if we think that’s enough. We need a re-industrialisation. We need to rethink industry. We need industries that have the capacity to create value with what we already have around us. We don’t create value by hedging foreign exchange risk, even if there are people who can make $10 million in a split-second by doing that; it does nothing to circulate money in local economies, which is what we need if we are to change the world.”