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Is a Dutch circular economy a pipedream?

Keith Mulopo

Since 2020, the Dutch capital city of Amsterdam has made the commitment to be the first city in the world to build a circular economy - an economy designed to combat climate change by reusing, sharing, and repairing raw materials and products that would otherwise go to waste.

The economic model aims to reduce the damage the production of consumer goods does to the earth through its carbon emissions or the blockages and contamination caused by its non-biodegradable materials, for instance.

Recently, Amsterdam has made the news because their effort to realise a sustainable future is apparent. Shops such as the United Repair Centre (founded last year) have been turning “400 repairs a week” with the target being roughly 3847 a week by 2026, working with fashion brands such as Patagonia, Scotch & Soda and Decathlon.

From this it appears that the prospect of a sustainable future is promising - for Amsterdam anyway. For example, its fashion culture lends itself to sustainability: citizens tend to wear jeans because of its versatility and muted or monochromatic coloured attire. The demand to share or reuse clothing wouldn’t be too much for the population because there isn’t an emphasis on individuality or extravagance in this regard.

However, for this initiative to be pulled off in totality, we must consider the costs of it - transitioning from a linear economy to a circular one is far from easy.

Professor Willem Van Windem at Amsterdam University of Applied Sciences has stated that Amsterdam still functions mainly as a linear economy because it’s costlier to invest in businesses that stress sustainability. And this makes sense because products made to be sustainable would be more expensive to purchase, which slows down currency transactions, which would decrease the amount of profit being made by the businesses.

Thus, the government would have to pay businesses to get off the ground, and given that in 2021 the government spending was €22 billion more than its revenue, it’s doubtful the urgency will be there on their part.

Also, conceptually the circular economy poses challenges to the standard of living. For instance, the model - in its emphasis on recycling - would reasonably reduce the consumer options and rate of consumption. This is because products would be more sustainable (and expensive) and the manpower (and hours) would be diverted to repairs and repurposing rather than invention, with the potential of job creation and the creation of other goods coming at a cost.

Considering that it has been reported that last year the Dutch economy grew by 4.5% mainly because of household consumption, we have to wonder whether this is possible in a circular economy - the model requires people to enforce limits on themselves in this capacity.

For what it’s worth, there is a fervour towards sustainability in the Netherlands generally: over the last decade, the number of Dutch customers paying attention to the sustainability of products has risen by over 20 percent. But there are still a lot of hurdles to overcome.

In Amsterdam, the construction industry is responsible for more than 30% of the extraction of natural resources and 25% of solid waste generated in the world because the built environment requires a lot of materials and energy. To account for the development of buildings under a circular economy would require a major re-envisioning of how buildings are constructed - meaning heavy, heavy investment on the part of the government in the recuperation process of wasted materials and businesses that use environmentally friendly materials for construction.

There are talks about whether Amsterdam could lead the way in turning Europe’s economy into a circular one.

In my opinion (judging from the Amsterdam example), for a circular economy to work, it demands heavy investment from governments and the collective desire by their respective populations to accept the change in living standards it entails. There are signs that the Dutch people would be willing to live in such an economy, but whether it is enough to engender the realisation of such an initiative is debatable.

Although the EU debt to GDP ratio fell to 85% of GDP in 2022, employing the circular economic model across Europe will be sure to increase the debt to levels that cannot be foreseen just for it to have a chance to remain.

The short-term cost of that to our lives may be too great to bear, especially given the inflationary pressures we’re facing currently.

Image: Circle Economy

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