What is the circular economy?
Terms that sound cool, but are actually quite shallow.
Every so often advertisements about “the circular economy” or “circular economics” pop up on my Facebook feed, interrupting my enjoyment of cat videos. On November 29 and 30, the University of Nuevo León, the university I work for, held a symposium in the Civil Engineering School:
The First Symposium of the Concrete Technology Consolidated Academic Group: The Construction Industry and the Circular Economy: Advances and Sustainable Strategies
(Primer Simposio del Cuerpo Académico Consolidado de Tecnología del Concreto: la Industria de la Construcción y la Economía Circular: Avances y Estrategias Sostenibles).
Nothing like a subtitle for the subtitle to drive home the seriousness of this issue. According to the article written by J. H. Carranza, for the university’s website, this event brought together experts from “Belgium, Brasil, Chile, Spain, Mexico, Portugal and Venezuela.” Apparently, this topic demands an important meeting of the minds.
What exactly did all of these people talk about? Actually, something which is great: how to reduce waste in production processes. I think we can all agree that a world with less waste is a better world.
They had me until they used the term “circular economy”. To their credit one of the participants, José Manuel Mendoza Rangel, even offered a definition for “circular economy”.
Wonderful, I thought. I will finally learn what all the excitement is about. So, what is “circular economics”?
“The circular economy is based on the premise that resources are finite and that we must look for ways to maximize their use and minimize waste. Applying this approach to the construction industry involves rethinking each stage of the life cycle of a project, from design to demolition.”
My colleague and friend Sergio Adrián Martínez put it best. In other words,
· resources are finite; so,
· we have to use them in optimal ways.
That sounds like the first two weeks of Introduction to Microeconomics. In fact, that’s what it sounds like because that is exactly what it is. I’m already hearing the rebuttals from the enlightened.
“No, Lorenzo,” they say to me, starry-eyed. “It’s radically different from anything economics has ever suggested. Because now, we don’t want to maximize profits but minimize waste through recycling.”
First, go tell that to the concrete industry. Go to the CEMEX executives here in Monterrey and try selling them a model where the priority is to minimize waste and not maximize profit. I’m sure they’ll take it well.
Second, who is going to recycle the inputs? Private firms. And those firms will want to maximize profits. Furthermore, recycling is an industrial process and will also generate waste.
The only difference between “circular economics” and the production theory we teach students is that the firm has an additional cost: recycling costs. Other than that, the firm will want to maximize profits, the difference between total revenue and total costs.
Now, I don’t want to disparage any of my colleagues from the Civil Engineering School or from abroad. I think it’s great academics get together and discuss how to best use concrete in order to reduce pollution.
So why don’t we just call it that? Why don’t we just call this event what it is?
The First Symposium of the Concrete Technology Consolidated Academic Group: How to Reduce Waste in the Construction Industry.
But what about “circular economics”? If the whole point of the symposium was about “circular economics”, then I’m afraid this university spent thousands of pesos on something they could have learned for free by auditing our introductory economics courses.
(I wonder when someone will come up with spherical economics. Because that’s the next level.)
References
Carranza, J. H. (2023, 30 November). Replantean ciclos de vida de la construcción con economía circular. UANL. https://vidauniversitaria.uanl.mx/campus-uanl/replantean-ciclos-de-vida-de-la-construccion-con-economia-circular/.
European Parliament. (2023, 24 May). Circular economy: definition, importance and benefits. https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits.