Latest / Unfolding: a circular economy podcast / Episode 8 - Janez Potočnik
Transcript
- Iain Gulland: Welcome to Unfolding, a podcast which is going to unfold the circular economy. Wayne Hubbard: Exploring the current state of circularity progress and crucially how we can all be part of accelerating the transition and take action to combat linear lock-in, whether we are policymakers, businesses or citizens. Iain Gulland: And in this first series of episodes we will be focusing on the upcoming COP thirty one in Turkey in November, where the circle economy has been highlighted as one of the core focus areas for action in the battle to reduce climate emissions. Wayne Hubbard: and we will be talking to a range of experts with knowledge of the process who will give us their take on how national governments can incorporate circular economy principles into climate mitigation strategies. Iain Gulland: And then myself and Wayne will be going to COP in Turkey to try and put into practice what we've learned or what we've put into action what we've learnt in this series of podcasts and try and influence the COP outcome. Wayne Hubbard: So thanks for tuning in. Why don't you join us on this journey in the road to Antalya? Iain Gulland: I am Ian Golland, former Chief Executive of Zero Way Scotland, as well as past president of ACR Plus, a pan European network of cities and regions promoting more sustainable resource management and the circular economy. Wayne Hubbard: And I'm Wayne Hubbard, former CEO of Reel London and advisor to cities and podcaster now. And together Ian and I have well over a million years in circular economy. At least, at least a million years. Iain Gulland: At least a million years, absolutely. So myself and Wayne are, as you've heard, are going to be talking to a range of exciting guests to understand a little bit more about the COP process, what we could expect, what we should expect by way of agreements or implementation plans for the circular economy specifically, as well as getting into some wider discussions around the circular economy transition. Wayne Hubbard: As ever, there is an opportunity for listeners and viewers to feed in their thoughts and questions as we go along. Please leave a comment, like and subscribe. Send us an email at unfolding at unfoldcc.com. Suggest future guests we might like to include. We're keen for this to be as interactive as possible. Iain Gulland: So yeah, we are really pleased to welcome our guest for this episode, Janis Potokhnik, who was the former EU commissioner. And you were really at the start of talking about the circular economy from a European perspective. I think we could probably talk a little bit about that as well. Certainly over 14, 15 years ago, possibly longer, you were talking about the circular economy and you were instrumental in that very first Circle Economy package that came out that really, as I said, set the journey off for a lot of us in terms of the Circle Economy. But you're also now the co-chair of the UNEP International Resource Panel, which to be fair continues to produce the most significant evidence, I think, about what we're all facing in terms of... resource Janez Potocnik: Mm-hmm. Iain Gulland: impacts, resource depletion, but also how we can move things forward so we can actually escape from, some extent, some of the challenges that are in front of us. And I guess we can get into some of those reports as well. And you're also a partner at Systemic, which is a system thinking consultancy, is that right? I'm thinking about that whole system approach and really. challenging as much as anything else, which I think is another area we could talk about. So anyway, I'm going to let you introduce a little bit more about your work and maybe a bit of that historical journey to some extent. How did you kind of, yeah, that starting point in terms of being a commissioner and promoting the circular economy and then through to where you are now. And then we can get into the discussion around COP31 and the opportunity that brings us all. Over to you and welcome. Janez Potocnik: Okay, thanks. Thank you for the invitation. probably two things which before we go to the COP and climate change, one is about my journey and how we arrived where we are. And the other is what are the essentials which are coming from the research work of international resource panel. But let me start with the first. I'm a PhD economist coming from Slovenia. So I... I was actually director of the Institute of Macroeconomy in Slovenia. And somehow I actually don't know myself how I landed to be the chief negotiator. which was a super nice educational process through which, and also I was also at that time the minister without portfolio for European affairs in Slovenia. And that I landed then. being nominated for the first Slovenian commissioner. The first serious job which I was doing was actually related to science and research, which was quite important to be honest and tailor-made for me. And the second, so the first one I could not actually choose because I was quite young commissioner coming from a small country and you are not in a position to choose. But science and research was tailor-made for me. While the second one, environment, I was actually able to negotiate with President Barroso because he was also then extending his first to the second term. So we were colleagues already in the first term. And I was really trying to get environment. And I can tell you why. Because I have always believed that environment is the most... the most impactful economic portfolio which I can get. Because if you understand the environment in the right way, it's a lot about problems which are linked to environment, a lot linked with the famous quote which you know very well, it's about economy stupid. So Iain Gulland: You Janez Potocnik: that was my understanding at that moment. And actually, as you know, I got it. But what happened at that moment was for the first time there was a separation between climate and environment. Before everything was covered under the same commissioner and when I got the mandate for environment, this was separated. And my colleague, Connie Hedegaard, was responsible for climate, I was responsible for the environment. I think that was an interesting move in particular because prior to that, or majority of the attention of environment colleagues was going to climate. Now we were somehow forced to choose and find a new narrative for the environment portfolio. And we actually choose the resource management, natural resource management, because we believe that this is actually the best connection which one can do with the real world and with the economics. We have established at that time the... the group which was dealing with those questions at that time of course, Ellen McCarter, which was extremely active already at that time in those areas was a very useful and reliable friend, also helping us with some connections and advice. And through that, we then developed a kind of resource efficiency first program. And at the end of my mandate, we basically landed with the first circular economy proposal. This was late summer 2014. The unfortunate fact which happened after that is that that proposal was immediately removed from the table by the Junkers Commission who came into the power November the same year. I don't know what was the reason, to be honest. My assumption is that probably because Junkers Commission was course very much concentrating also on the competitiveness side that nothing which came from environment commissioner couldn't be really good for the business sector. And they were wrong because after the removal those who raised the voice were basically coming predominantly from the business sector. because they have simply misunderstood the way how we have prepared the proposal which I put on the table. It was prepared really by creating the ownership in advance by all important communities including the business community. And many were already understanding very well in the business community at that time that circular economy, it's a promising and needed option in the economic system. So... I think that as much as I was unhappy with the removal after some serious consideration and years I came to the conclusion that this was the best thing which could happen to circular economy because it actually triggered the debate. It was not any more environmental issue, it was suddenly also economic issue. And we started one year of serious debate which actually resulted at the end that the Junkers Commission at the end of 2015 put their own package on the table. which was pretty much similar to mine. And that's how the whole story of circular economy travel started. Wayne Hubbard: It's interesting, and I d I don't know if Ian would have the same experience as I did, but around this time in London, we were talking to the mayor's office about the concept of a circular economy and trying to get it into policy and strategy documents. And and I was in a separate organization, so I had this kind of once removed, kind of related governance relationship. But having the European Union. talk about it in a in in the way that it was being discussed and promoted in the way it was being promoted gave people like me the space and the justification to implement circular economy as a concept it at the city level. So without that, so even though that that particular package didn't get through, without that being there, I'm pretty sure it's it's debatable about whether we would ever have had the space to introduce these things. Janez Potocnik: I'm absolutely sure that this is the case. by the way, still, at the beginning, then the commission was a bit denying that there was something existing before the package, which which you because commission put on the table. But it was. actually, if I read and I did recently read our read our proposal from 2014, read it. It's it's probably more ambitious than proposals which we are currently seeing today. The process which on a political level started in the European Union at that time, of course, there was a kind of aspiration that we would somehow, that we would enlarge that approach also on a global scale. But it's quite clear that there was somehow the feeling of the countries, in particular, of Global South, because they were... use that anything what is coming from the global north is basically to protect their interest. They were a bit doubting the concept itself and it was not easy. But if you look at it to now, if you look for example, I was just a month ago participating in World Circle Economy Congress in India. Wayne Hubbard: In India, yeah. Janez Potocnik: There was 3,700 in-person participants there. it's becoming a really global concept. And if you look to the latest proposal from China, China is really intelligently putting the whole circular economy concept in a kind of strategic context of the challenges which their country is facing. And I think that in Europe we are not yet there, even if we are the ones who actually are looked at from many countries when the circular economy measures and direction is considered. Iain Gulland: Yeah, so it's interesting. then, yeah, maybe from that leading then into the COP, because it's interesting what you said about, you know, the European Commission separated out climate and environment. Wayne Hubbard: Mm. Iain Gulland: Ultimately, you then Janez Potocnik: Yeah. Iain Gulland: started looking at resources, management resources, the consumption, all of that, you know, demand reduction, circular economy. And now we're right. And that's, and I would argue that's very similar experience in Scotland to some extent. There was a climate Janez Potocnik: Yeah. Iain Gulland: climate team and government. I'm not saying we didn't speak to them, we were leading the circle economy was separate from that. Yes, people understood there was some relationship with carbon and climate, we weren't actually part, we weren't really part of that climate division. And here we are. that's, Janez Potocnik: I think. Iain Gulland: and cops have come and gone and we've all said, yeah, but Janez Potocnik: Yeah. Iain Gulland: on a minute. You're not talking about materials, the consumption, the extraction, production of materials, which is... We talk about your report in a minute, 50 % of the carbon impacts at a global level. But here we are. We're going to copter. Janez Potocnik: Yeah, just to clarify, think that was 2009. I think that was a clever move because it actually put the environmental people in the shoes of energy people that they started to understand that energy transition is not so easy thing to do. But on the other hand, energy people were forced to start looking into climate effects Iain Gulland: Yeah. Janez Potocnik: seriously and force them into consideration. And they actually started seriously to taking care of each other also. But somehow, as you say, we lost the material perspective in that process. So I think it's pretty critical now, even for the climate colleagues, that they take the material story, that they somehow embrace it better. than it is currently embraced because unfortunately, many times governments and commission and everybody, while they of course have the kind of coordination mechanisms which are clear, but those who are handling the pen are the ones who are decisive. And if in the structure itself that is not represented appropriately, At that point it simply does address the property. I think that today this is one of the challenges that the silo which we wanted to break with putting Iain Gulland: Yeah. Janez Potocnik: energy and climate together, it's now another silo versus the material story and we need to break it again. Wayne Hubbard: Yeah. Iain Gulland: Yeah. Wayne Hubbard: Yes. Iain Gulland: that's a way to let's be dramatic about it. But how do we break that? Because that's exactly what we were spoken to some others. Obviously, other guests have highlighted, you yeah, in some respect, this is a great opportunity. We're almost bringing that back together again, that climate and material. So that's the opportunity. However, you know, we're going into a court where leaders, particularly, so maybe just talk about the political dimensions of this, who are probably well-versed or understand the kind of climate emission, decarbonization, all of that sort of electrification, all of those sorts of stuff. But suddenly we're coming in with the materials argument or dialogue, which is very different for all the reasons that we all understand. So I guess part of it is how do we break down that? Janez Potocnik: Yeah. Iain Gulland: We don't have tight, mean, diplomacy is involved here, but in Janez Potocnik: It will. Yeah. Iain Gulland: some respects we don't have the 10, 15, 20 years that we've. it's not 1050, 10 years that we've missed out on this. We need to cut through quite quickly the political dynamics of this and get everybody on the same page. guess just thoughts on that. there a silver bullet here that we could all be using in this COP 31? Because it feels like a great opportunity, it's almost, yeah, it's a language thing as much as anything from the get go, isn't it? Janez Potocnik: we are far from language thing. It's a lot of real interests which are behind. But not mentioning, but we should a bit mention also the IRP related science. there is one paper which came recently out in July this year from its IMF working paper. And it's titled the generalized Jevons paradox and the future of energy. its conclusions are really, I think, fundamental because it's clearly saying one thing, we need to connect energy and materials better. Second, they were clearly saying that standard framework, which assumes replacing fossil electricity production with renewable electricity, suffices to achieve decarbonization. However, while renewable energy infrastructure would generate a relatively small amount of CO2 downstream uses good services infrastructure, which is powered by that low carbon electricity like industry transport, food consumption, entail material consumption that depends on fossil and create fossil effects. So, but their conclusion goes even further. What they are saying is this. Geoeconomic power, trade arrangements, financial factors are simply reinforcing each other and they generate a kind of, they call it very intelligently, systemic rebound effect and material Wayne Hubbard: Yes. Janez Potocnik: interdependencies. So with all the resource efficiency measures and technology centered approach, which is absolutely necessary, we got in the situation that due to this geoeconomic power, trade arrangements, financial drive, this is neutralized. And we basically don't get the results as we would need to get. And their conclusion is of course that we need to demand side policy frameworks that can help better allocate energy and material flows across sectors and across countries. And I think that's really important if this is coming from the IMF because that's Wayne Hubbard: Right. Janez Potocnik: the kind of different logic and breakthrough in the approach. That's exactly the approach which I would use. And that's an approach which international resource panel is constantly calling for because we simply believe that without combining these two stories. So we simply believe that when we talk about climate, one thing is certain that... climate breakdown, it's a symptom of ecological overshoot. And material footprint is in this context dangerously under discussed. So there are three combined effects. One is material usage, which of course includes also fossil fuels. Second is economic system where we still have a linear system at least. There are incentives which are supporting cleaner system, which are more present than the opposite. And of course, the human growth, because we have more than doubled on the planet in the last 50 years, which of course, it's putting us in a different situation and different responsibility. So all this is the problem of this, as they call it, ecological overshoot. And if you want to address it, just cleaning the supply side. just doing the energy transition and Iain Gulland: Yeah. Janez Potocnik: addressing CO2 emissions that as it is important, it's not enough. Why? Because energy transition will not make our economy system less wasteful and more just. And that's the core problem. The core problem is wasteful system and unjust economic system. So we need to ask, so we need to add to this supply side solutions. Also demand-side solutions, circular economy, it's a typical instrument of supply-side, of demand-side solutions. And of course, also nature-based solutions, which are many times the cheapest and not really used appropriately. So the COPs have been, till now, and you are right in that, very much concentrated on the supply-side solutions. And by the way, we are in COP 31. We are not in COP 1. So understanding that... that we are failing in addressing climate change, it's essential. And maybe the best would be the quote from my philosopher colleague from Slovenia, Slavoj Zizek, who basically said, I don't know if he said it in this context, but it's nicely in this context. In short, the truly courageous stance is to admit that the light at the end of the tunnel, it's most probably the headline. of the train approaching Iain Gulland: You Janez Potocnik: us from the opposite direction. So that's basically where we currently are and we need to be courageous enough indeed that we see that. And I think that this is one of the reasons that now material story is becoming, it will hopefully become more serious part also of the climate story because you should never forget that what is the essential message which is coming from International Resource Panel. It is that extraction and processing of materials drives all planetary crises, including Iain Gulland: Yeah. Janez Potocnik: climate, including biodiversity, including pollution. It's explaining one or another at a different level, but it's driving all of them. And if you understand that fact, then you understand also that you need to integrate that into solutions, be it in CBD COP or be it in Climate COP or be it in any pollution questions which you are addressing. Because that's somehow going to the drivers and pressures. And while of course Climate and Biodiversity COP are dealing predominantly with the effects, with the final results, We will never solve these problems not going back to what is causing them. And that's actually what Iain Gulland: Thank Janez Potocnik: the IRP is trying to constantly point the finger on. These are the reasons. And if you don't remove those reasons, dream on because unfortunately the situation will not fundamentally change. Wayne Hubbard: Yeah, that that was a beautiful articulation of the of the of the nub of the issue that Ian and I have just spent the last seven hours of podcast trying to get to the bottom of. So in in five minutes, thanks for that, Yanish. We'll we'll be able to put that on our on our website and say, This is the problem. Iain Gulland: You Wayne Hubbard: and just to go on to the I'd like just to go onto the report actually. Your I think it's called the twenty twenty four outlook report. Janez Potocnik: global growth outlook. Wayne Hubbard: And so in that report you've got this killer statistic that our our colleague in our in a in an earlier podcast referenced, around fifty percent of climate emissions are driven by extraction and use of of rheumatoes. So if you could just talk about that a little bit, and then in the report there's some kind of suggested remedies and it talks about food and other things. And I wondered if if you if you could just kind of talk about how you see we can address that fundamental issue. Janez Potocnik: Yeah, to start by our logic in the international resource panel. You know, if you look into the history, access and use of natural resources were always decisive element for the well-being of any country. You can remember all the efforts of many countries, including yours, to actually have access to land, water, gold, then oil, gas and so on. So natural resources in short. Unfortunately, this was also to a large effect then driving the stability, security conflicts, wars in those areas because there was a constant and still is geopolitical effort of consuming consumption countries to politically control the resource rich countries. The whole history, I call it of colonialization of nature, which was actually preceding colonialization of people with all terrible effects, was also the central question of the fairness and equity. So one of our clear messages is that the current economic model, which was championed by industrialized nations, is wasteful and it's unjust. it is clear that it's not ethically or ecologically sustainable. And we must simply set the order right, know. Economy was invented to serve human needs and not the opposite, which is many times today the case. So when we talk about materials and natural resources, I think it would be important for the listeners to understand that when we talk about materials, we basically talk about everything what we extract from the earth. which is biomass, fossil fuels, metals, non-metallic minerals. And if we add then water and land, we come to resources or if you want longer, natural resources. And this global material use, everything we extract from the earth has more than tripled in the last 50 years. And if you look to the impacts which you have mentioned, then up to 60 % if we include also the land use change of... climate change could be explained through extraction and processing of materials. Up to 40 % of pollution impacts and even more than 90 % of water stress and Wayne Hubbard: Wow. Janez Potocnik: land-related biodiversity use, which is mainly connected to the biomass use. one of the things which is also our research saying is that there is a clear need for a fairer and more equitable world. Why? Because high-income countries are using six times more resources, more materials per capita than actually lower-income countries and are causing 10 times per capita more climate effects. Middle-income countries in the last 20 years have really very quickly increased their material footprint and they are closing the gap with us, while the tragic part of the story are low-income countries and low-middle-income countries where actually nothing is... really happening concerning their economic development. Which if you take into account that we are already currently bridging seven out of nine planetary Wayne Hubbard: Yeah. Janez Potocnik: boundaries while an important part of the world does not have resources for meeting their essential needs, it is clearly pointing the finger on the higher income countries then that we need to lower the material footprint per capita. So it's quite essential. to understand the pure physics of that story. So Wayne Hubbard: Yeah. Janez Potocnik: our final call, it's basically we need to decouple well-being growth from economic growth, because at end of the day, what matters is well-being, not only well-being. So if you want GDP, it's a kind of measurement of the health of the economy, while well-being, it's a measurement of the health of society. And that's really what matters. we have to decouple both from the resource use and altogether from environmental impacts. And this decoupling, which we are, this is a kind of professional term of the scientists, is the best done through the circular economy, which is actually an instrument to deliver that kind of decoupling. If we understand it right, and if you want a kind of more, even more, in change of the overall understanding that basically you need that type of economy that change if you need to have an economy which is consistent with sustainable development goals with the COP commitments and so on. And of course, we are not there. Iain Gulland: Yeah, so I mean, I mean, it is easy to say that it's very different what you're talking about, because in a way we are trying to address global inequalities. Janez Potocnik: Yes. Iain Gulland: I mean, that's that's you could argue that's what really is at stake here or that kind of underpins what that work we're trying to do. We're all trying to do. So it's about a different economic system almost. And I guess that's one of the challenges. trying not to be negative, but I'm trying to frame it in that kind of COP discussion because, you know, obviously through a Scottish lens, we've seen a vast shift to renewable power, but that only came, you know, but that really only came about because somebody worked out how to make money from it. you know what mean, that will really, I mean, you know, the economy supported that shift, you know, investment and innovation and now deployment at scale. of renewables. So I guess this is the conundrum about circular economy, isn't it? How do we get that? How can we make money out of it? Or how can money be made? We're up against other ways of people, people can invest in renewables now, they can make money out of it. But as you say, that's not the answer, just investing in more renewables. we need to be investing in a much more circular approach. It's not just infrastructure, it's how the infrastructure is owned and designed and built as much as just deployed. Janez Potocnik: Yeah, just to try to explain you the circular story as a kind of really serious optimistic promise for the future of our economy and the planet. So the fact is, as you said it, that currently we are still more supporting with the market signals, the linear economy than the circular economy. And that... everybody who is basically in the circular economy business, it's in a way swimming against the flow of the river. And that's why Wayne Hubbard: Yeah. Janez Potocnik: they are constantly calling for this is our problem, this is our problem, this needs to be removed, this needs... And there it's clear understanding for me about that. But let me put it a bit, the whole story in a strategic perspective, what is actually happening with decarbonization of the energy sector. So with transition of the energy sector and with transition of the digital sector, we're actually moving from a fossil economy to the metals, minerals based economy. Fossil economy was by definition more linear because when you burn the fossils, actually, you know Iain Gulland: Cheers. Janez Potocnik: how the things end. While in this transition, to the metals, minerals economy, which will require also more of the use of biomass, but I'm intentionally talking about, so I could talk about all other materials, but fossil fuels. In that transition, we can organize it in a much more circular way than it was possible in the past. So circular economy, it's a kind of optimistic promise, which if we follow that path, that we can solve economic as well as environmental and hopefully also social problems. So that would be my plea for everybody who is struggling with circularity to understand it in that way. In the international resource panel, we actually put it or have produced some recommendations which would be needed. And with my colleague Isabella, Teshaira, Cochero, IRP, have actually released something which we named call to action. There are the essential message for which is coming from this call to action is this. A lot of nice examples of circular economy are needed and welcomed, but they will not make circular economy a norm. If I quote the, the Mario Quintana, a Brazilian author, who nicely summarized that in a sentence, don't waste your time chasing butterflies. Mend your garden and the butterflies will come. So what we have to do, it's exactly that. Mend our garden and the butterflies will come. And the garden as it currently looks, it's not attracting the circular butterflies. So there are, what we have mentioned are basically four essential missions. So the first one is set the resource use path. If you want, we need to establish some material related targets. In high income countries, for me, best way would be to basically say that we will limit our material footprint because we have to. That's material footprint. It's actually... consumption measure showing through the consumption how much of materials per capita you are using. And if we would set that kind of a target on the contrary in the global south, probably they would, because they need even more materials per capita still to meet essential needs, they would need to set some kind of resource productivity increase. Why? Because this would somehow align their efforts with the circularity logic. and drive. That's the first thing which we have recommended. Second is better measurement. We are currently not measuring circularity well. Circular, the current measurements are more downstream measurements Iain Gulland: Thank Janez Potocnik: of the circularity, which means that we are measuring more or less those things which are actually less welcomed in needed, but less welcomed in the circular Iain Gulland: Yeah. Janez Potocnik: economy logic. The third is then market measures, which are for me most needed. But if I'm honest, we are talking about those measures for 20, 30 years and nothing serious has come. It's for me a lot about, of course, about pricing, which is already happening and a lot of steps were done there. But the really not well used tool is of course the tax policy. Taxing more the things which you would want less, taxing less the things which you would want more. Using the state subsidies for exactly only transitional purposes. They are still very much used even for supporting the fossil economy. Then public procurement, so don't follow only the lowest price. to achieve something with an important part of GDP which is gathered in public procurement. Getting rid, if you want, of tax havens because they are escape rooms for rich people and rich companies. The understanding of the ministers of finance that they are not there just to keep their budget in balance, which is, of course, an important function, but that they are there to give the appropriate signals to consumers and producers, it's essential. It's in a way hypocritical to ask from a consumer on a daily basis, please behave more responsibly, but sorry, you will have to pay more if you do that. That's hypocritical because that's against our economic theory we are teaching at our universities. So we need to look at those. And the last, the fourth mission, it's the mission which is related to better transparency or if you want better governance of materials. While in the area of energy, we have the convention, we have international energy agency from 72. We have IRENA, which is coordination of policies. Tell me what do we have in materials area? Nothing. So that's why we are so, I'm very much engaged in one of the projects which we call Global Materials Data Hub. the kind of doors on which you could knock if you would need data which are reliable, which are trustable, reliable analysis, something like today it's maybe international energy agency but in the materials area. And that's why, and a lot by the way, there is a lot of calls from business sector, from financial sector that they need more traceability, predictability, assurance. about how to deal with the resources because in this transition from fossil to metals, we simply have to get prepared for that. And that needs also some of the appropriate steps and all that I do believe that should be part of the COPs, the COP also which we are mentioning. But more than part of the COPs, I think it would need to be part of the review of the overall SDGs story. and the Wayne Hubbard: Yeah. Janez Potocnik: review of the SDG number 12, it's 2027-28. And I think that's a great opportunity to integrate better the circularity logic there. Why circularity? Why not sustainable consumption and production? Ask any businessman, they understand circularity. If you ask them about sustainable production and consumption, they are lost because this is not concrete enough for them. Wayne Hubbard: Yeah. Janez Potocnik: And circularity, it's very concrete. And Wayne Hubbard: I I agree with that. Janez Potocnik: even more, I think that some kind of targets story and some kind of governance story would also need to be part of that review process. yeah, it's a lot of the things which would need to be on the table, but the moment it's right, I guess. Wayne Hubbard: Well, you know, we're we're Ian and I are c are are go are going to cop. and Janez Potocnik: So do I. Wayne Hubbard: we'll all meet up for a an alcohol free beer. or or maybe not. But yeah, we definitely should meet up. and one of the things we're we're kind of thinking of is, you know, what is the circular story that we can c you know, as practitioners come together. What can we what can we all coalesce around. And you've given us some absolutely golden ideas for that, for that circular story. I do agree on the SDGs. I remember when Re-Lundon published its Circular Economy Rootmap, about the same time as the SDGs came out, I think. So circularity was starting to emerge as a kind of in the public discourse at the same time as these SDGs came out. And it felt to me like the SDGs were slightly behind the curve at that point. So it's really good to hear that they should be reviewed. you've set out a load of tests there. And the the kind of the story arc of this podcast series has picked up on a lot of those themes around the need for governance, the need for transition brokers, the fact that we have these two aspects to COP and we need a kind of global transition broker that can feed through into N N D C's. And then create the environment in nations that citizen regions can start to develop so that we don't have these disconnected pilots that wither in the desert and the garden is tended so that those those can those butterflies can can can can grow if you like. I guess the challenge that we come across quite often is this challenge around consumption. The need to think about consumption emissions and the need to change the way in which we I guess consume to become more users and more consumers of of second life things. what it what do you think are the challenges there? Because the perception that I have is that that was a message that kind of had some traction around about 2019 or so. Then we had COVID. And s and there seems to have been a change in the way of that our politics is starting to be conducted. And messages around net zero and messages around consumption are really difficult political messages. So how do we how does the circular economy and how does governance help at at the kind of citizen level to deliver some of this? Janez Potocnik: Immediately when you start talking about consumption, are implicitly in the conscience of people pointing the finger on consumer. But consumer, it's actually the weak part of the economic story. So we are actually pretty much on a daily basis manipulated and we are constantly bombarded by more do this, do that. And it has not a lot of sustainability story which is behind those questions. So I think for me it's much better to talk about demand-side measures because demand-side measures are actually pointing a finger on both on consumer and on the producer. So in IRP we basically more talk not to limit, not to talk about the human needs, but how can we meet those human needs by using less materials and less energy? Because that's the real question. So don't try to somehow, now you will live worse. No, but you can still live well. And this is the famous debate which is always between the resource efficiency and resource sufficiency. And you know, Many are immediately scared when you mention resource sufficiency. But listen, think resource sufficiency in the first place, it's set of policies and behavior. So it is set of policies, it's not just behavior, but it's important to understand the essential difference, which also from the circular economy perspective, it's important to understand. If you talk about improving the car, fuel use, recyclability, blah, blah. You talk about efficiency measures. If you talk about the human need, which is actually not owing a car but mobility, and how you can Iain Gulland: Yeah Janez Potocnik: provide that also using car but also using other alternatives, then you talk about sufficiency measure. So if you look at it from a circularity kind of... line from the bottom to the top, efficiency measures on the bottom while sufficiency measure how to limit our use on the top. And these are sufficiency measures, Efficiency, I'm mixing it, it's a long conversation. Iain Gulland: Good. Wayne Hubbard: Yeah. Janez Potocnik: These are sufficiency measures, of course. So I think it's important to understand in that type of perspective. Because if you, then you will not be afraid of mentioning some things because we are already doing many of the sufficiency policies, but we simply don't name them sufficiency because people don't like, and politicians in particular, don't like that expression. They like the efficiency story. But on the other hand, if you are a consumer, I have heard a nice way because... we are always looking to all the things through our own human optic. We are the of the world, each one of us. That's our perception. Whenever in the morning, for example, you are complaining that you are caught in a traffic jam, you are wrong. You are traffic jam. Wayne Hubbard: You're part of the traffic, yeah. Iain Gulland: Yeah, yeah, yeah, yeah. Janez Potocnik: That's a big point of perception which unfortunately is many times present. But my advice in this consumption story would be basically talk about the man side because that's pointing the finger on consumer as well as on in particularly on the producer because producers can meet our needs in a much more efficient way while they can still have the profits and so on and the things would be organized in a different way. If I just, I don't know, if I give you one example. I'm currently the owner of the fridge which is here behind. The producers have actually no real interest that this fridge lasts long and they don't have an interest. So if need reparation, the new product is actually cheaper than the reparation, if I'm a bit exaggerating. So everything is actually incentivized of replacing. But if I would not be the owner, if I would just rent it, Believe me, it would last much longer. It would be much more robust. It would be made differently. Wayne Hubbard: Yeah. Yeah. Janez Potocnik: So there are possibilities and I would still be very happy to pay for renting that good fridge, solid amount of money, which I'm now paying for buying a new one. So there are examples of how you can basically bridge this divide and still keep the business side actually attractive and profitable. while on the other hand also addressing the sustainability and environmental and social issues in more appropriate way. Iain Gulland: Yeah. So that's, I'm very conscious of time, Chani, we've kept you a little bit longer than me. I know we could talk all day. I think, Wayne Hubbard: W we we could talk all day. Yeah, Nich, honestly. We could do that. Iain Gulland: but I think, mean, mean, cause that last point you're making about the sufficiency, yeah. Cause that's some building on your kind of four, think. There's a kind of, what's the word? We really need to create a much more innovative culture around that. Exactly that. And I mean, that's one of the things I, from my work, the challenges. you know, it's almost how do you create that real innovation in demand reduction for a better word or sufficiency, because you get into these conversations with manufacturers and all that sort of stuff, but you know, but you end up talking about efficiency, you know, product efficiency rather than, Wayne Hubbard: Hmm. Iain Gulland: and I think there's like, I mean, I don't know how you frame it. I completely get your point about language, but how do we frame a global charge for innovation in... demand reduction. So how can we actually exactly that meet human needs by using less? It's almost the global challenge that we need. We need to create some sort of like movement across our universities, our research, our industry, to really, really, because I feel a lot of the innovation that we see isn't, is really good innovation. I'm not knocking it, but it's more about that efficient, making things more efficient so I can. Janez Potocnik: But he isn't. Iain Gulland: I can make it cheaper or can make it do something faster so more people can use it and all that sort of stuff, but it's not quite what we need. Janez Potocnik: Isn't the logic of circularity, if you understand it in a holistic, broader way, actually exactly about the question how you can meet the human needs by using less energy and using less materials? So, Iain Gulland: Yes. Yes. Janez Potocnik: yeah, but of course you should not strip it on recycling and the things which are the easiest way to do. No, you need to keep it as a conceptual challenge. And as a potential answer, whenever I'm asked what is actually circular economy, my reply is it's actually the older concept on the planet Earth. Because all nature Wayne Hubbard: Mm, yeah. Janez Potocnik: is actually arranged in a circular manner, so nothing Iain Gulland: Yeah. Janez Potocnik: is lost, everything has its purpose. So the only serious question which we should ask there, and it's a very serious question, is are we humans part of nature? Because if we are part of nature, why are we not behaving accordingly? I think that these are nice ways how to actually come closer to a kind of layman understanding what we actually talk about and what we actually want to achieve. Many of the things in the way how our grandparents were actually doing the things were closer to circularity than we are today. Iain Gulland: Yeah, yeah. Janez Potocnik: And yeah, that's it. At the end the question is, are you happy or are you not happy? And happiness, not just sometimes if you don't have time to enjoy the things which makes you happy, you will not become happier because of that. Wayne Hubbard: Yeah. Janez Potocnik: So it's pretty Iain Gulland: Yeah. Janez Potocnik: important. So I normally, what we need to understand because I think geopolitically we are... currently in a really challenging situation. What we see Iain Gulland: Yeah, no, absolutely. Janez Potocnik: it's a kind of that we are moving from a rule-based to the power-based world Wayne Hubbard: Mm. Janez Potocnik: more and we should simply, we need two things. One is hope and another is compass. And we should not allow that the hope would be replaced by fear, which is actually very much a kind of strategy of the power-based. world and we should not allow that compass which is set by values, by the rule of law, Wayne Hubbard: Mm. Janez Potocnik: by science and cooperation to be replaced by turbulent future which is designed and actually kidnapped by the storm of power. So this is actually and by the way when we talk about for example global materials data hub or the governance in the materials area what do we talk about? We basically talk about how to protect the rule-based world, which we need if we want really to cooperate. We should never... So the core issue which we are not understanding is this one. We are actually the first generation ever which is living in socio-ecological space of planetary scope. None before us, even the Second World War was not a global war. It became a global threat when we invented the nuclear weapons. But now we have internet, we have... artificial intelligence, have, I don't know, climate change, have nuclear threats, have pandemics and so on. How will you deal with those issues if they are basically addressing us collectively? So knocking on the chest that I will protect your national sovereignty, it's get rid of those politicians because we need to protect our global sovereignty to protect our own sovereignty because that's the only way that we will live in in peace and harmony in the future. Unfortunately, you don't have many of the choices because we see it with the reaction of nature. Either we collectively agree and start to deal with those issues or we will be put in a situation which will be more dramatic like we see it today with climate change effects, like we see it in emerging wars, like we see it in emerging potential pandemics. Yeah, the nature will make the deal. And we have to basically decide as members of that nature, do we want to be on the winner's side or the loser's side of that deal? Wayne Hubbard: It's the kind of design or disaster scenario, isn't it? You know, we have the power, we can design Iain Gulland: Yeah. Wayne Hubbard: the system, and if we do nothing then we we welcome disaster. Janez Potocnik: We need to know that and admit that we are basically in-depth in future generations. Wayne Hubbard: Yeah. Iain Gulland: Yeah. Janez Potocnik: Financially by overusing, by depleting the nature, by overusing the natural resources, by the way we all know that is wrong. And apparently humans are the most intelligent species on the planet. So it would be high time to prove it. But more Iain Gulland: Yeah. Time to prove it. Yeah, indeed. Janez Potocnik: than a real technological or economic choice or question. it is actually an ethical one. That's actually behind. And I have always concluded my presentations with the most intelligent advice coming from the most famous Belgian, is Detective Hercules Poirot. Wayne Hubbard: Ha Janez Potocnik: When he was once asked why he is speaking about himself only in the third person. His answer was something like that, if one is such a genius like me, it's very important to establish a healthy distance to himself. So that's basically our main question. So are we able to, so we are not the first nor the last, nor the only one on this planet. And we bear the responsibility in this connected world. And we need to establish this healthy distance and understand that the The joy and the quality of life, it's not in a struggle for sometimes more, more and more, but it's actually in creating a kind of environment in which we will be all in a position to have a decent and happy life. Iain Gulland: Yeah, well, yeah, no, that's a great place to end our discussion, Tariq. I totally, mean, and I think for telling for me, probably me and Wayne, that opportunity, because we'd agree the circular discussion, the use of resources, how we play that out at the global level, all of that is at the heart of this, that opportunity. And the fact that it is on the agenda at COP would suggest that it's... Janez Potocnik: Yeah. Iain Gulland: That's starting point now. Yeah, we're going to try and make the most of it. And I'm sure others, including yourself, will do that because there is so much to gain from this from a humanity perspective. But you're recognizing all of the challenges that we're currently facing at a global level. But that surely is what the cops are about, is bringing these things to the fore and having these rich discussions. Janez Potocnik: Yeah. Iain Gulland: What's the word? Shining a light on a positive future. we take some really big steps, we can really make a difference here for everyone, not just for the global north. Janez Potocnik: By the way, my final message for the COP and you and everybody there would be the quote from Soren Kegard, from I think he's Danish, take a chance and you may lose, not take a chance and you have lost already. So I think this is absolutely what should basically drive us. Wayne Hubbard: Yes. very good. Iain Gulland: Yes, no, absolutely. Yeah, it's under... You've Wayne Hubbard: Yeah. That that that Iain Gulland: got to be in it to win it. Wayne Hubbard: that's our motto, I think, right now. It's like we're Iain Gulland: Yeah. Janez Potocnik: Yes. Wayne Hubbard: we're just we're just gonna take a chance. And you're right, unless we unless we use this opportunity Janez Potocnik: . Wayne Hubbard: to the the most that we can, well we've we've we've lost it, haven't we? It's gone. So yeah. Brilliant. Thank you so much, Shanech. Iain Gulland: And you're, Janez Potocnik: all the listeners, if they are maybe sometimes desperate and cynical, my message would be stay optimistic. For a very simple reason, optimists live longer and better. Wayne Hubbard: I mean I'm my I you know, I know I always say this, but I am literally I've had my mind bla expanded, I think. Like and and my brain is stretched. Literally so much Iain Gulland: I I know, I just, I was just. Wayne Hubbard: in there. There's so much content in there, it's difficult to Iain Gulland: Exactly, exactly. I mean, it's quite interesting, isn't it? Because we spent a bit of time writing these questions, thinking we were going to, you know, but we don't... We covered Wayne Hubbard: No Iain Gulland: about four of them in the first five minutes. So I think that's part of, you know, who he is. He manages to talk. Wayne Hubbard: Well, there was a section there where in, you know, that f five minute piece he basically articulated the problem and probably the solution. I mean, that was amazing. That was a master class really, wasn't it? I think I struggled to I struggle to find the the language sometimes to articulate some of these thoughts. But he's, you know, he he r Iain Gulland: I tell it, yeah. Wayne Hubbard: I particularly liked w and I think, you know, Jos had talked about some of this when he was talking about electrification and and the and the material impacts of that, which I've kind of now got this possibly what he was talking about was the thing that Yanich was referring to that in the IMF report, systemic rebound effect. Maybe that's what he was talking about. You know, so there's a there's a term for this. And I hadn't appreciated and he and he encapsulated this so perfectly. Of course, it's so obvious that we're moving from a fossil economy to a materials Iain Gulland: Yeah. Wayne Hubbard: economy. That switch to electrification means we're moving to this. what he described Iain Gulland: Yeah. Yeah. Wayne Hubbard: it as essentially a materials economy, right? Iain Gulland: Yeah, I think we said that in one of previous episodes, particularly our energy system is now moving from fossil fuels to a material-based energy system. I guess we're not really recognising that. As we said, where are all these materials coming from? What's the impact of those materials? And again, I guess it'd be great to see that graph that shows you there's going to be a moment where there's a rebound effect for all of that electrification. could, what do call it, wipe out the of, you know, the benefits, so to speak. So in a way, that's the kind of thing, you know, without having circular economy on the agenda, you would imagine the people who are talking about decarbonisation and electrification should be thinking about, they should have seen that, they should be thinking, hold on a minute, you know, all of this great stuff here, but actually downstream, all of this, or upstream and downstream, all of that carbon impact, so what are we doing about it? And then they should be... Wayne Hubbard: Yeah, but so i it it ref Iain Gulland: I don't hear that. I guess what I'm trying to say is I don't hear anybody in that side Wayne Hubbard: Exactly. Yeah. Iain Gulland: of the debate, which we all need. We do need electrification and all that decarbonite. So nobody's saying, but we're not talking about the impact of that. Or we are, but not these people. that's still as that as we've talked about conversations in different rooms, but we're not having it in the same room saying, hold on a minute. Let's think about the... Wayne Hubbard: We we were talking about this p prior to the pocketside. It seems relevant to bring this up. you and I were discussing and I was talking to a colleague last night who pointed out to me, and I don't know this is true, but you've got some experience of this, that in order to make that switch t from fossil to mud to to energy and the and therefore the materials that will we need to do that, we need to secure whatever the number is, thirty or so critical raw materials that will Would be part of that transition, metals, etc., and minerals. I think that's what Janich called it, the metals and minerals economy. So nobody, and I can't believe this is true. So if if if a listener or viewer has an alternative perspective on this, I would genuinely like to know. But the it was put to me last night that nobody has done an assessment of the quantity of materials that we will need to make that switch. and how they will be acquired. In other words, we're we're trying to move from rin into a renewables economy with a linear mindset. So the assumption is those materials would be available to us. But of course they are rare and they are critical and every major economy on the planet will be competing for those resources. So when we talk about resilience in the circular economy, there is a massive gap in our security because we don't know where those materials will come from. Now, I don't know if that's true. so I'm I'd love to be proved wrong, but that's what it was that was put to me last night. Iain Gulland: Yeah, I mean as I said, I mean think there are some pieces of that jigsaw for a better word. We've got a better Wayne Hubbard: Well you did a bit of work in Sarahway Scotland, didn't Iain Gulland: word on the offshore infrastructure in Scotland and what that would need in terms of materials. So I think there's some specifics like that that are out there. There was also something, I mean you just said that and I've got this terrible podcast thing isn't it really, but they also might have that. There was something, there was something a number of years ago, Wayne Hubbard: Making out Iain Gulland: something to told me that the UK, I think, I mean, there's a few years ago, previous administration, they'd done some work on something around that. And I think it might have been lithium. I'm just, again, it was one metal and they, somebody had said, a report stated that they needed, the UK needed 10 % of the global supply of lithium or a big figure like that. You and you kind of think, well, Wayne Hubbard: Mm. Iain Gulland: hold on a minute. How is the UK going to access that amount of lithium? when every other country in the world is trying to, you so it's that type of, I mean, that's just making numbers up here. But I think there are bits of that type of insight out there, but you're right. I think what you're talking about, you know, kind of global strategic assessment. Wayne Hubbard: Strategic assessment. Yeah. Iain Gulland: But then, you know, it comes back to what Janice was talking about in terms of that data, international material data hub. And that's what that is trying to do, isn't it? It is trying to kind of overlay that strategic level around. Where are the material? What are we needing in the materials? Not just in the current economy, because there's lots of probably information around what we're currently using. But you're right, what do we need in the future if our economy, because obviously, you know, I think Libby said that, you know, in her, they've done some assessments around the power of the circular economy in terms of reducing demand, you know, for electrification. But actually, that's all been, you know, kind of shift to AI and data centers is probably blown a bit that out the water. I think that Wayne Hubbard: Hm. Iain Gulland: analysis, but that's what, in some respects, we've talked about that. If we're serious about all of this, and I'm sure we are gonna be serious about all of this, we do need those types of data hubs. We need information, but we don't really track, we track outputs, waste, all of that sort of stuff, products and what we sell and flows of product and materials out of your system, but we don't actually. really measure, monitor and then forecast into the future, don't think, as much as we really need. The granularity is not there. Wayne Hubbard: No. I mean, it was interesting that so y Yanich had kind of i if we'd have had him on first, he would have foreshadowed everything that we were going to talk about in this podcast series, really, wouldn't he? You know. So he he hit on these key things. I suppose the good thing about that is that the things that we're talking about, with the the you know, the quality of the people that we've spoken to over the last few weeks and months, there is quite a lot of agreement about what needs to happen. You could you could put that together and maybe we will do in a kind of this is, you know, we've we're basically we have got some free consultancy which we're now offering to the world. And like it's it's it's it's quite humbling actually. But things like, you know, a key North Star a a key piece of data. That it's not downstream target, but an upstream target. And we were talking about that the other week about whether it should be waste, and you were quite rightly telling me it's why it shouldn't be waste. And so raw material use, you know, and and getting that percentage of raw material use down i is a key thing. And he also talked about Yeah, better measurement, better downstream measurement as well, Iain Gulland: I think that's a good question. Wayne Hubbard: market measures. I mean the whole thing around the incentives. So Joss talks about that as well. The incentives in the system that are linear. My pet one being capital. You're incentivized to invest in new stuff but not to maintain existing stuff. You know, and stu and things like that. Better governance. Iain Gulland: Yeah. Yeah. Yeah, all of that. I mean, I think, yeah, we've talked a little bit about that around, you know, in the fringes of some of the discussions, but he was very clear about that, the kind of four things. yeah, the market measures, I mean, that's a podcast series in itself, isn't it? It's like, how do we shift that whole thing about the garden? I mean, absolutely. I mean, it's very similar to the work that we did in Scotland around creating the right conditions. That's what we kind of... I'm sure that others have come to, I think we talked about that with other guests as well. We could talk about all of these examples and all of these businesses, but actually what we need to do is create the right conditions for more of those businesses or these businesses to scale as much Wayne Hubbard: Yeah. Iain Gulland: as we can. And that's not really been the focus of Circle Economy. So now it's been about supporting pilots or investing in business opportunities, but not actually tending the garden or not actually making the garden. And it comes back to my... forest management, you know, analysis and all that sort of know, trees. So yeah, I think that's, that, yeah, maybe that's the area we've got to really focus on. How do we create the right conditions? Which again, is that kind of global, global shift, you know, thinking about the economy differently as much as, you know, thinking about the technology. I mean, I guess, yeah, sorry, I was gonna. Wayne Hubbard: We had well as gonna say we had a conversation right at the start with with James about finance and he he was talking about finance and investment and it and it occurred to me then and and it's reminded me now that there is a there is a kind of assumption that if something is investable someone will invest in it. and that I think ignores I mean that's true obviously, but it also ignores the whole if the system is designed and set up to incentivise linear businesses, then they're the ones who will e more easily get investment than those Iain Gulland: Yeah. Wayne Hubbard: businesses that are reliant upon more circular business models. So we need to move to that in order to support this materials economy, but we're stuck in this fossil fuel linear way of thinking. And all of the incentives around the economy are still based as if it we were, you know, fifty hundred years ago. And that's problematic. So we can't more effectively make that shift. So there is a kind of rational economic case for it, but it does require I think you use the term rewiring the economy. It does require that more fundamentally Iain Gulland: Yeah. Wayne Hubbard: and structurally. And I don't see any evidence that this you know, that we are in that place as a as a society. There's emerging evidence in some places but it's Iain Gulland: Yeah, and I think that's, yeah, I totally agree. Wayne Hubbard: Is that too bleak? I'm didn't mean to be bleak. I There is there is hope. Iain Gulland: No, no, no, but I think, I guess the follow on is, yeah, there's hope. But then the follow on is how do you then do that? How do you do that rewiring? Do you do it in stages? Do you take everything in a series of steps? Or is there a much more fundamental discussion about how the economy should be rewired and it just, it moves there much more quickly? Because that's the point of the question I was asking around finance. Wayne Hubbard: That's it, there's my delivery. Finally has arrived. Kitty moment, I'll be back in a sec. Iain Gulland: back. Wayne Hubbard: Finance. Iain Gulland: No, think, yeah no, finance. Well no, it is about that, do we do it in stages, because I still think that, you know, the James Close interview, we still felt absolutely that finance can be used to shape the circular economy, absolutely, but you know, my experience to date has always been, you know, people say, well yeah, it can, but how do I make money out of it? It's still that kind of linear. head, you know mindset, isn't it? mean, ultimately what we're talking about is a completely different mindset is actually saying you might make money, but you'll make money differently to how you've made it before or the investment Wayne Hubbard: Yeah, yeah. The Iain Gulland: is going to have to come about in a different way. But then how do you go into people who run banks, people who are, you know, still, they're still in the linear world saying, you've got targets about investment, about return on investment. So they're not thinking, then I get this new thing. That's not how they're set up. They're not structured in that way. So there is a more fundamental thing about how the whole structure works, which I think we've talked a lot about. Wayne Hubbard: Yeah. I think at a very basic, very, very basic level, a lot of the individual circular economy strategies, the so called nine Rs or however many Rs you want to have this month, those nine R's are they're kind of like fairly sensible ways to save money as a business. You know, so at a very basic level, employ some of those nine R's and you'll save money. And I don't understand that it's gonna cost me more, 'cause it won't, right? I mean, obviously, it you know, that that I you can think of scenarios where you're adding cost on your business, but by and large, this save you money as a value proposition, so as a business model, that's when you start to think, Okay, well the the revenues that I generate might be distributed over a longer period of time and that's something that financiers just haven't got their head around really. And so, you Iain Gulland: Yeah. Wayne Hubbard: know, maybe some of the work that the UK government's doing with the Dutch government will help that, you know, maybe. But it's certainly n you know, it's certainly we know that the Square in the Circle report that the World Bank did that has some really good things to say about how this is imp implemented systematically through national governments. And also we know that if it was involved if it was in the NDC and there was a target, there's a better likelihood that would involve legislation and that would then have a trickle-down effect on the rest of the economy. And the fact that it isn't means that there's no hook, there's no legislative hook for any of this to happen. And until that happens, citizen regions and neighborhoods, whatever they do, it runs the risk of being an isolated pilot that will wither when the funding ends. That's always going to be the risk. So this is this is good work that we're involved in. Iain Gulland: thank you. That is the end of this episode. You have been listening to Unfolding, a Circle Economy podcast. I've been Ian Gulland, he's been Wayne Hubbard. and hopefully you will all listen again next week. Wayne Hubbard: Thanks, comment, like and subscribe.