Hi, and welcome back to the MOOC specialization, become a sustainable business change agent. This is created by the faculty of the business school of University of Colorado at Denver. I'm John Byrd and I'm coordinating the program.. This is the second of six sustainability thinking lectures. In this lecture, I want to introduce the concept of circular thinking, or closing the loop. Earlier, we talked about how sustainability looks at the entire lifecycle of a product. In our example, the manufacturing system was linear. We extracted, we used, we disposed. Or said differently, take, make, waste. This linear cradle-to-grave system means that new raw materials are constantly being extracted, refined and transported to factories where they're turned into finished goods which are eventually thrown away. This type of linear system means that we have to continuously extract new materials and our waste pile grows and grows. Except some raw materials are finite or limited, this type of system cannot be sustainable. Sometime, we're going to run out of some important natural resources, where they're going to be so expensive to find and extract that we won't be able to afford the products made from them. The answer is to close the loop. This is a key concept in sustainable business. We'll see examples at three levels: companies and their products, groups of companies, and the entire circular economy. One of the neatest ways I've seen to think about this is, is a quote from Frederick Talbot. Waste is just raw material in the wrong place. What we're trying to do is turn waste into a valuable raw material by getting it to the right place. There's a wonderful book titled, Cradle-to-Cradle by Bill McDonough and Michael Braungart. It helped accelerate and popularize this closed-loop idea, though people were working on it a long time before that. This slide shows a circular or closed-loop system. It's actually not quite a closed-loop system because energy is being added to the system. But I didn't show that. And some byproducts become biological nutrients are leaving the system. Notice that end-of-life portion of the loop. We have two types of materials. They've been named biological nutrients and technical nutrients. Biological nutrients are anything natural that will compost or decompose, provide nutrition for the next generation of biological entities. These can be fibers, wood, leather, fur, bone, banana peels and so on. The other area shows technical nutrients. These are man-made or synthesized materials like plastics, metals, polymers. They can be recycled and reused almost indefinitely as long as they aren't contaminated. But it requires energy and maybe catalyst to reuse them. One of the keys to reuse technical nutrients is keeping things separated. If we mix biological and technical nutrients, they have to be easily separable or we can't do anything with them. Similarly, for technical nutrients, if we coat aluminum cans with plastic, it becomes really difficult to recycle them. We'll talk about strategies for designing products for disassembly and recycling when we talk about green design. If we manage these two types of materials, biological nutrients and technical nutrients properly, then we'll have an abundance of raw materials. We won't run out of resources and we won't have huge piles of waste. And we'll be able to upcycle materials rather than just recycle or downcycle them. Upcycling means using materials in more complex and higher valued products. Aluminium soda cans can become airplanes or cars, and plastic bottles can become soccer jerseys. We can make our aluminium molecules happy and proud by upcycling them. Downcycling mean shifting to a lower valued use, like glass bottles being crushed and becoming road base material like gravel. We'll look at some ways companies are closing the loop and shifting us to a world of abundance and away from a world of limits and waste. Shaw Industries makes carpet. It has a nearly closed-loop system. It has designed its carpets to be easily disassembled and recycled. It collects its old carpet or carpet tiles and it turns it back into yarns and back in for new carpet. Interface, another US carpet maker does the same. In the Danish city of Kalundborg, there's the world's first eco-industrial park. About 10 or 12 factories operate with waste from one becoming food for another. This is called industrial symbiosis. At the center is a 1,500-megawatt cofired power-plant. Surplus heat from this power-plant heats 3,500 local homes and a fish farm. Steam is sold to Novo or disc pharmaceutical companies, and the Statoil. Chips them from the pollution scrubber, is sold to a wall board manufacturer. These are just some of the connections are post to URL for a short video about Kalundborg. Now, we'll move up one more level. The Ellen MacArthur foundation in the United Kingdom has been working on developing a circular economy. They say that a circular economy would save companies 100 of billions of dollars a year. One of the ways to get a circular economy started is by having manufacturers be responsible for their own product. Europe has some policies like this. In the Netherlands, when people register a car, they pay a fee that covers the cost of collecting, dismantling and recycling the car at the end of its life. The Green Dot program in Germany is a packaging take back program. In California, mattresses, carpet and pesticide containers are all under producer, take back or extended producer responsibility programs. In many states in the US, you pay a small fee when you buy car tires to cover the eventual cost of disposal. If we can shift from a linear, take-make-waste model to a closed-loop system. We'll go a long way to reducing our needs from newly extracted raw materials. And all of the impact and energy cause associated with harvesting and refining those materials, closing the loop and creating circular production system is important. Next, we'll talk about long-term thinking. Thanks.
