What is the full potential of seaweed as a climate solution? We produce 30 million tonnes of seaweed a year, and it only takes up 2% of the carbon released by deforestation in one day! The possibilities are great: it could be used to produce things like energy, chemicals, pharmaceuticals, ingredients for food. So why haven’t we jumped at this opportunity?

We’re on a mission to find out why seaweed remains the largest untapped biomass resource in the world. We met with Olavur Gregersen of Ocean RainForest to explore the challenges we face in increasing the value of seaweed, and how to extract the maximum benefits in a safe and sustainable way.

Resources:

Ocean Rainforest website

Made of Courage video series

Made possible by:
	The Nordic Council of Ministers is the official inter-governmental body for co-operation in the Nordic Region. Representatives of the Nordic governments meet at the Council of Ministers to draft Nordic conventions, etc.

Produced by Camille Duran
Published by Eleen Murphy

Music Credits: License by Ins. Green White Space.

TRANSCRIPT FROM THE EPISODE

Camille Duran [CD]: My friends, welcome to Green Exchange, today we are launching a new series – from COP24 in Poland. This is not an episode you need to listen to during the COP necessarily. It will still be true and interesting in the years to come.

In the years to come? Are we that slow to change a system?

I don’t know I have shared feelings – what’s for sure is that things are not moving fast enough on climate. You probably followed the concerns raised by the latest IPCC reports and all the buzz since October about how screwed we may be.

It feels like we had this biiiig party on Planet Earth since the 20th century – we had fun, felt no limit – it was loud it was crazy, so crazy we completely trashed the venue.

Ok, now the party is over – time to go home. One more song. The DJ is packing up, most people get the message. Tomorrow’s hangover is going to be really bad. You know what I mean. People start drinking those huge glasses of water to mitigate the effects of all that heat coming up.

But no – wait! there are still those guys dancing… dead drunk in the middle of the dance floor, annoying everyone else. They are holding on to the next song like there is no tomorrow. What?! They actually just forced the DJ to put another song. And another one.  When is this going to end?

Who invited them in the first place? Oh they invited themselves…

You know who im talking about right? Is it time to call the police? Security?

[Aside] Come on cookie – bite! Attack!

How are we going to handle this? Tear gas?

2:16

CD: Ok let’s get to it. As the year ends, we are going to cover a couple of climate-related themes – including an update on climate finance – but for now, we are publishing a three episode series about Bioeconomy.

A bit of context: at Green Exchange, we have been following and contributing to the bioeconomy discussion for a couple of years now. You may remember, especially in relation to sustainable fashion.  

Bioeconomy is in a strange place right now. People in the climate community and environmental policy tend to reduce it to one process, one value chain that was very promising at some point: biomass to fuel. Turning biomass into energy.

As we know this went kind of bankrupt due to the evolution of energy markets. But many people stayed stuck with this idea that this is it, this was bioeconomy, and it’s not worth much attention anymore.

Big mistake. Big. Biology has much more to offer to our economy, much much more.

This is the main reason why we are launching this series. To review examples of bioeconomy solutions that have tremendous potential to provide valuable resources to a ten billion people planet.

I hope you will enjoy digging into this as much as we do.

3:56

CD: So the big question is – how can we replace fossil and artificial resources by bio-resources and how does this look like on a ten billion people planet?

This series is made possible by the Nordic Council of Ministers, who keeps on being an accelerator, supporter and important stakeholder of the bioeconomy agenda in Europe.

Thank you very much for your support and for letting us dig into this with our own… [honking noise].

SEAWEED VS. CLIMATE CHANGE: REPLACING FOSSIL FUELS WITH ALGAE

4:27

CD: This episode is about something green/brownish that grows in the water and that has many interesting properties.

Seaweed. Algae.

Yes we can replace a lot of fossil and artificial resources with algae.

But how far are we from scale? Is it really a sustainable alternative? To what point? Are we getting too excited about seaweed? Or not enough?

I had a chance to go explore this first hand with a couple of production facilities across Europe.

I had long discussions with experts, sometimes around a beer after a long day, or sometimes at 6am in a taxi on my way to the next train. I tasted seaweed, met the people who cultivate it, saw their processing facility. Saw the passion in their eyes, and the rough environment they operate within.

Long story short – it’s fascinating.

To tell you all you need to know about seaweed in 2018, I invited one of the most prominent entrepreneurs in the field to join me on the microphone. His name is Olavur Gregersen, from Ocean RainForest. This was a couple of days ago at COP24 – I asked him a few important questions, you know me…

CD [To Olavur]: Now, do you like science fiction?

Olavur Gregersen [OG]: No.

CD: Okay, before we find out where this question led, let’s go with chapter one: seaweed for dummies.

CHAPTER 1: SEAWEED FOR DUMMIES

6:14

CD: So seaweed is growing in the sea, in the ocean using the light. It grows on a substrate, this can be a rock or a rope for instance, and it is preferably cultivated offshore – this is what Olavur is specialising in and we’ll talk more about it.

What is very interesting is that seaweed takes up carbon from the atmosphere and also absorbs nitrogen & nutrients from the water – which we have too much of as well – because of the runoff from intensive agriculture and aquaculture. So it’s a bioremediation tool.

Today there are 30 million tonnes of seaweed cultivated around the world – weight wet. Which is a lot – a lot more than the salmon industry for instance – but it’s only a 6 billion dollar industry. So the value of the product is fairly low.

It’s quite popular in Asia where you find it in food – it’s actually referred to as a superfood because of its properties for the gut system, for it’s probiotic effects. If it’s better for us it’s also better for animals, so it’s really taking off for animal feed – whee as you know we’re trying to reduce the use of soya. We’ll talk about this further on in the series.

Now think about this for a second: there’s a species of seaweed that’s growing in Australia that can reduce the methane emissions of cows by 70%. Put it in the animal feed and reduce the methane emissions of cattle. We also use it in the pharmaceuticals, cosmetics, health products.

So long story short, we have something here that has a huge range of possible applications and climate benefits that are very important to consider in the mix of climate solutions. 

8:14

OG: We can compare that with plants in the tropical rainforest: seaweed is actually more efficient at taking up carbon if you measure it in grams per square meter, than plants in the tropical rainforest. And this is what I find so fascinating: we can create forests in the ocean that can take up carbon, and at the same time we get a biomass that we can extract compounds from that can replace fossil-based products. So it’s a win-win, both in the production process, and with the products we produce from that production process.

CD: Think about this for a second…

CD: Right, I know! But it’s too good to be true. There is a trap, there must be a trap, no? Because that would be the silver bullet.

OG: I thought I could come here with a silver bullet, to the COP24 [laughs]. The trap at the moment…I would say rather that there’s a gap at the moment. The big gap is that we have to understand much better than we do today, how to extract different products from this biomass and do it in a commercial and sustainable way.

CHAPTER 2: THE PROBLEM

9:52

CD: So yeah, in practice the key problem seems to be this knowledge gap Olavur is talking about. How do we start extracting and marketing the different compounds in a way that is sustainable and doesn’t undermine the value of other by-products extracted from the same algae?

Let me explain. You want to make sure that from the same batch you are able to produce various products for various applications – and not just produce food or feed like it’s mostly the case today.

This is what refining means. We do this in the fossil fuel industry, Here it’s same story – but it’s biorefining. So how do we biorefine seaweed to increase its value and use ALL of the biomass for maximum benefits.

10:46

CD: So that’s the reason why we don’t have this huge industry and biorefineries yet, there’s still research to be done?

OG: Yes. That is the explanation as far as I can see it. Because we know…I mean, earlier on it was a bit of a challenge: how can we produce enough biomass? But at Ocean Rainforest we deployed in 2010 a cultivation rig offshore in the Faroe Islands in open ocean conditions. And that has survived now for eight years, and it’s scaleable. So we are very confident that we can produce the biomass needed. And everybody agrees on the benefits that are related to seaweed and seaweed products, and the potential they have.

But the big problem is this processing. How can we set up a production match of high value products with high volume  (typically for cosmetics, nutraceuticals, for high-end food), and low-value products with high volume (typically feed, fertilisers). So today I am able to set up a business case for if we had a biorefinery producing between fifty thousand and one-hundred thousand a year, which is not crazy numbers. If you look at total wild harvest in Norway of seaweed, it’s around one-hundred and fifty thousand tonnes a year. The wild harvest if seaweed in France is around thirty to forty thousand. Iceland around thirty thousand.

So we could cultivate around fifty thousand tonnes of seaweed, and based on the projects we’re working with – and especially Macro Cascade and the results we see there – I think we could set up a production that could be commercially sustainable with an annual production somewhere between fifty and a hundred thousand tonnes. And for me that is a huge step in the right direction and also enables us to basically outline and say that we can set up a pilot plant and test this on, say, five thousand kilos of wet seaweed per day, run that through, and try to produce four or five different products from the same biomass.

And that’s where we need to go. We need to take the results out of the lab and test them in real conditions as you have seen in our plants. Because there’s a difference when you’re in a lab, where everything is under control and ncie and works normally – and then when you bring these procedures into a real situation, or scale it up. And we have proposals for that, we know the cost of it, we know the people for it, we have industrial partners for it…so we are ready to go into the biorefinery area. And I was not ready to do that two years ago. But over the last two years we’ve made, I would say, very good progress in understanding how we can do extraction of this mix of high and low value products.

CD: As you can hear now is time for larger scale pilots! Getting into biorefining on a larger scale to learn from bigger operations outside the lab.

14:36

What’s worrying me is how little talk there is about seaweed in the climate community and why governments and investors are not jumping on this to boost and enable the markets. So here’s our last chapter: what’s needed right now? What are the next steps?

CHAPTER 3: WHAT’S NEEDED

CD: Now, do you like science fiction?

OG: No.

CD: Okay. Well, that’s not an easy setup for my next question, but I will still ask it! What’s the danger? Like, imagine artificial intelligence is coming, the robots are taking over your operation, and things go wild. What’s the worst that can happen to an extremely fast growing seaweed industry? And behind the funny part of that question, there’s a real danger: can we grow this into a monster if we’re not careful?

OG: My biggest fear is actually that we will be able to produce some compounds that are useful, and then somebody comes along and says “Well yeah but we can do the same function” with some kind of synthetic product instead of the natural products which we will have from seaweed.

CD [to audience]: Oh no, you remember those guys who don’t want to stop dancing? Here they are again…

OG: We have big players in the market, and what we’re talking about here would either require – and I would hope – is that they say, “Okay this is interesting, we would like to pay interest into this and learn more about it, take part in it, and make the world a better place”. Or they will say “No, we would like to stick with what we do and put our interests in the way of for you accessing the market”. Because at the end of the day, everybody who has a role in this has to go into different market segments and sell their products. And if you have standards or procedures, or decision makers that are saying that they are not really interested in changing how they work today, then this is not only a technical challenge, it’s also a market challenge. And in many ways, even on a simple dried food product, that is almost the case today.

So I’m very much aware of market standards when talking about food and feed, and how in some cases already now, they should be adapted to accommodate seaweed as a product in the market, rather than putting it to the side and saying “Well, we really don’t have standards for seaweed so we’ll have to apply other standards that are not made for seaweed but apply to something similar” . And without going into details, but sometimes we run into these kinds of challenges in European markets.

CD [to audience]: So – same challenge as usual my friends: how do we enable and boost markets for products that are climate solutions, and tell the Kool and the gang that the party is over. Actually I should call them Fuel and gang – fossil fuel and the gang, that’s good!

Climate policy and investment frameworks need to take all this into account so we can change market structural forces, and I would add internalise the cost of externalities into the cost of production. You heard that before.

There is also some work to be done by ocean nations on how they want to use the water.

18:58

OG: And talking about hindrances and challenges, another aspect of this is of course also that policy makers have to take this serious to allocate certain areas of the ocean to producing this sustainable biomass, and this is marine spatial planning, as I call it.

CD [to audience]: One more thing I find very interesting is this vision whereby bioeconomy comes and stimulates the rural areas which are suffering from job loss and decreasing economies. Seaweed cultivation is good example of how to create jobs and resources in coastal areas in a way that is not centralised, but more like a distributed system of highly replicable local economies, right?

I ask one more question to Olavur about his growing industry.

CD: I think what’s going to happen is that the climate community is going to start paying attention to this, and in a couple of years I will see you on your yacht in Monaco  with all the money and success that this operation will have generated. And we will have a vodka seaweed cocktail with a straw – but a straw made of seaweed as well. And we will be very healthy. How does that sound?

OG: The straw sounds good. The straw made of seaweed, that’s perfect. And you can already have that. The part about Monaco? I don’t know. I mean the main driver for me is this possibility that we can use the ocean and we create a new source. I mean, we don’t create it more than that, the seaweed is already there. But we can create it in an industrial manner that is not bad. Usually when you start to create on an industrial scale, you start to destroy as soon as you get over a certain size. But when we’re talking about cultivating seaweed offshore, I find it very difficult to see any negative aspects, or impacts of this.

CD [to audience]: That’s a good way to wrap it up ! The future will tell what the human race will make out of seaweed. Right now I can’t really think of a resource we have not over exploited in the name of power and greed, but maybe I am being too radically realistic…

What’s for sure is that with the huge challenge we have on our plate, we should really start using seaweed as an ingredient to our recipe for survival.

Thank you Olavur Gregersen and the team at the Nordic Council of Ministers, we will put a few links in the episode notes for those of you who want to dig deeper – including the link to a 4-episode Video series we produced this year about people at the forefront of the bioeconomy.

Here is the soundtrack of the trailer. It’s called Made of Courage – because in the end, that’s what it’s about: courage!

Next time we talk about courageous decisions around proteins and grass cultivation. Keep up the good work in the meantime!

[Trailer for Made of Courage].

END

Change takes hard work, dedication, sweat and sometimes even tears. Oh, and lots of patience. Just like running a marathon. Camille spent time with one incredible marathon runner, Jonah Chesum, to find out what it takes to be the best, and what lessons we can take with us from the track to our own work in change making.

A Paralympic distance runner from Kenya, Jonah was hired as a pacesetter, and he’d never completed a marathon before. But in 2017 he sped past the top performers and won the Barcelona marathon, surprising everyone and himself. And that’s only one part of his story. We talk mental toughness, rural life, corruption in Kenya, the importance of respect, and social change.

Green Exchange Labs
We interview remarkable change makers and those who help shape our world via their art, mission, projects or enterprises. Through our discussions we study how change happens in society, talk about the future, decrypt stories and brainstorm ways we can accelerate social & environmental change.

EU Ministers forgo moral scientific and legal obligations on fisheries management – and that’s not ok. We go to Brussels to understand the problems of fish quotas AgriFish Council meetings and governance of the commons. With this simple story, we highlight a part of our EU institutions that doesn’t work and discuss what we can do about it.

#3 things you can do to help end overfishing:

1. Support NGOs working in that space (they know exactly what to do):

www.our.fish 

www.seas-at-risk.org 

www.pewtrusts.org

2. Try the fishes that are different! Reducing the demand for most popular fishes will help balance the quotas (check out www.fishisthedish.co.uk)

3. Spread fish stories: subscribe & share!

The Commission has just released the first ever Europe wide strategy on plastic. This text lays out the vision for tackling plastic pollution, with its main aims to reduce disposable plastic use, limit micro-plastic use, and make manufacturing packaging fully recyclable by 2030. Big news. But is it bold and ambitious, or more politics as usual?

In this episode, we review and discuss the content of this strategy together with Coordinator of Rethink Plastic, Delphine Lévi Alvarés. Big topics on the table include: the absence of clear target for recyclable packaging, possible upcoming legislation on single-use plastics, how to prevent unintentional microplastics, possible oxoplastics ban, and the plastic tax surprise.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Camille Duran [CD]: Eleen before we start: Last time I met with Paul Rose,

Eleen Murphy [EM]: From the Guns N’ Roses?

CD: No that’s Axel Rose! Paul Rose is the National Geographic explorer & TV Presenter from the UK…

EM: Ah yes, you never know with you…. Great, what did he tell you?

CD: I asked him what’s the one plastic story that stands out for him. Have a listen.

Paul Rose: For me it’s the Arctic. I know the Arctic very well. I used to go out there, and when you’re on an Arctic beach, it’s a funny old place even in summer, because the ice – the fast ice, as they call it – is stuck to the land. But you can have a bit of trouble working out where the sea begins and the land ends and where you are on the tidal cracks, and are you going to fall in the sea and everything! And you’d never see any plastic, because the ice edge was so far out there, even when the ice is loose it creates a massive barrier around the arctic. We’d never see any plastic, because it would come up and butt against the ice edge. We didn’t know that at the time, but it was.

But now with climate change, all that ice around all those islands is gone in the summer. So the beaches are stone, pebbly and rocky beaches. And what’s on them? Plastic, of all kinds. So that’s a real shocker for me, to see that. You know, we sort of get used to seeing it on a beach in temperate zones, but to find that in the Arctic…man, that’s a killer. You know? That hurts me.

[01:36]

EM: Ouch.

CD: Yeah that’s just to remind us how big and how urgent the plastic issue really is.

EM: In case any listener is still in doubt.

CD: Direct transition: the EU Commission just released its plastic strategy, we started to talk about it in the previous episode.

EM: Anything ambitious?

CD: That’s what we are going to talk about in today’s episode: what can we expect from the EU exactly?

EM: Good question.

CD: First V.P. Timmermans and V.P. Katainen dropped in on the Parliament for the announcement and addressing a couple of questions.

EM: And?

CD: Well, I don’t think anyone expected bold moves. This Commission is entering the last part of their mandate, they say they have budget limitations and even if Timmermans’ introductory speeches show conviction & determination, we are going to need a lot more than what is outlined in the text.

But… some interesting developments!

EM: Tell me more…

CD: I unpacked the content of the plastic strategy with an organisation that is very active in this debate and which I knew would be one hundred percent aligned with the interests of the Planet and communities worldwide.

EM: Like aligned for real, you mean.

CD: Right, it’s a coalition of NGOs that is following the plastic debate at the European level. They are called Rethink Plastic and I debriefed with their Coordinator, Delphine Lévi Alvarés.

EM: Let’s hear it!

[03:24]

CD: Hello Delphine, are you there?

Delphine Lévi Alvarés [DLA]: Yes I’m here!

CD: Thanks for making some time. It’s an important week; we’re going to about the plastic strategy and what’s in the text. Can you first tell us about the purpose of this plastic strategy. What was expected?

DLA: So, it’s a document where the European Commission lays out their vision for tackling plastic pollution in the future. It’s an action plan more than anything else, it’s not a binding document.

CD: At Rethink Plastic, what is the overall feeling of your group after the release of this plastic strategy?

DLA: The overall feeling of our group is that it’s quite a positive strategy. It’s not complete: there are always things to improve, but it’s a good declaration of intention from the Commission, and now what we want to see is action.

CD: I bet. I suggest we just dive in: I want to talk about a few of the subtopics that the strategy covers. Do you feel that there’s one theme in particular that has been dominating the discussion, or has it been an even mix of themes – when it comes to, you know, microplastics, oxo-degradables, single use, recyclability, and so on?

DLA: I think it’s been a pretty balanced debate. A lot of topics have been discussed during the year and a half that has preceded the publication of this strategy. A lot of focus was put at the beginning on recycling, and the role of the Coalition and other environmental NGOs was really to stress the need for reduction. The topic of single use plastics in the latest month has been occupying the scene, and we are quite happy to see that the Commission is already taking a step and consulting European citizens and stakeholders on what kind of legislative measures we could implement at the E.U. or national level to reduce single-use plastic items.

[05:39]

CD: Yes and let’s start with that theme then on single use plastics. A directive that was mentioned a couple of times was the single-use plastic bag directive, which was very successful in the countries that implemented it. I think you are pushing for replicating that directive for other single-use plastic items?

DLA: Yeah, we could imagine the same kind of mechanism for other single-use plastic items like [indistinguishable], disposable cups, lids and straws, and cutlery…

CD: Service wear?

DLA: Yeah, service wear, exactly.

CD: What do you expect on the single-use plastics front in the year to come?

DLA: We expect legislative proposals to be tabled by the Commission, and discussed by the European Parliament and the Council. That should come before summer, because you probably know that it’s the last active year of this Commission, because next year we’ll have the European Elections. And we will have a new Commission taking over in September next year. So it’s the closing down of the mandate of this Commission and I think they want to finish with a solid legacy. I hope that they want to finish with a solid legacy on single-use plastics.

CD: Okay. moving to microplastics now. So, those are the pieces of plastic that are less than five millimeters, I think, that are found in the environment because they were intentionally added to products, like cosmetics, detergents, or paint. Intentionally added, by opposition to the microplastics resulting from the degradation of macroplastics. So there’s this sort of intentional versus unintentional debate, which I think is interesting. What are your takeaways on this chapter?

DLA: On this chapter we are welcoming the step taken by the Commission to ban them, and to ban them for a wide variety of products – not only cosmetics, which was the low-hanging fruit in a way. So now the scope is open, and it’s going to be dealt under a very technical process called Rich (nothing to do with money). And it’s going to look at the different kind of products in which we have intentionally added microplastics.

[08:12]

CD: So it covers only intentionally added microplastics? How about the other side of the problem: the microplastics that are in tire dust, in textile microfibres and so on?

DLA: Yeah, so for these ones it’s going to be about working at the product level: how do we improve the products themselves to prevent the release of microplastics or microfibres into the environment. In the case of textiles, it could be also how do we improve the washing machine and wastewater treatment systems so that we prevent the release of these microfibres. So for all of these topics that are more recent, and for which there are no silver bullets, there are discussions amongst the stakeholders, and the Commission is planning some research on this to find appropriate measures to prevent them.

CD: Okay. Oxo-degradable plastic, which is also quite a technical area. It’s a type of plastic that is designed to break down into small pieces that most often remain in the environment later on. I think something happened there as well?

DLA: For oxo-plastics, we got a good signal from the Commission about their intention to restrict their use under the Rich process again – the same process as the one that is going to regulate microplastics. And here it’s real good news because these plastics have been seriously damaging the environment and the recycling system as well, and a ban was urgently needed. We don’t know how long it’s going to take, and we don’t know if it’s going to be a full ban or only restricting the use in certain sectors, but we’re going to engage in this process and make sure it goes in the direction that we want. That is to say, a full ban.

CD: One more thing I wanted to talk about. A few days ago, the Commissioner for Budget raised an interesting idea around an E.U. plastic tax – a European-wide plastic tax. It was a little bit of a surprise, no?

DLA: It was! It was a surprise, yeah. I think it was a surprise as much for the NGOs as it was for the people in the Commission working on the plastic strategy. And everybody asked us what our opinion was, and I think it’s a very good question. We are in general in favour of using any economic mechanisms to reduce plastics, in particular single-use plastic and over-packaging. On this tax specifically, we are cautiously optimistic. One thing is sure, that we definitely need more information about what he had in mind and how it could be turned into something operational at the E.U. level. And for us, this tax should really be designed to drive-down the use of single-use plastics and over-packaging in general, rather than being primarily a source of income for the E.U.

CD: Right. And Jyrki Katainen was asked was asked about this, after the presentation…let’s have a listen.

[11:33]

Jyrki Katainen: In a way one could say that it would be a good way to create our own resources for the E.U. because at the same time while we are taxing, it addresses our environmental objectives. But the better plastic strategy implementation we have, the less income we can collect. This is another side of the coin. Second point, I have been working with environmental taxes, and I like them if they are done well. But we have not yet found a way to introduce a European-wide plastic tax. As I said in my introductory remark, we are ready to look at fiscal means or fiscal solutions for incentivising recycling or reducing plastics, especially single-use plastics. But it’s too early to promise anything. Some of our member states have used tax measures or fiscal measures to reduce single-use plastic bags, so it has functioned well on the national level. So in this same spirit, we will look at all the opportunities, but whether we manage to find a well-functioning, European-wide tax on plastic…I have my doubts.

[13:06]

CD: So yeah, he was not super comfortable about this idea, but probably there’s some discussion going on backstage. Any closing words? What’s next for you guys?

DLA: Work, work, work. We need to ensure that everything that is in this strategy is turned into action – and action aiming at tackling plastic pollution and at operating the changes in the system we need to tackle plastic pollution in the future, in Europe and globally. So most of our key topics were addressed, and were more or less in line with what we wanted to see in the strategy, but we are aware that there are a lot more topics that need to be addressed to really tackle plastic pollution. And that some areas were not covered enough – like chemicals and toxics in plastics. This is a key area if you want to build trust in the recycled material market in the future, and make sure that we use more recycled plastics than virgin plastic. It will have to be addressed soon.

CD: Thank you for being with us!

DLA: Thank you for inviting us!

[14:24]

EM: Interesting. I see what you meant earlier. There seems to be a lot of “intentions to investigate”, or, “develop a measure to…” but nothing that bites hard enough.

CD: Yes I mean, it’s going in the right direction. Well hey, I hope it’s going in the right direction, right? Back to what we were saying in the previous episode about making history, the small stuff versus the real stuff, passing on the baby to the next Commission, etc. I don’t think anyone in this Commission will be remembered as someone who drastically changed the game.

EM: More like E.U. politics as usual?

CD: Yeah.

EM: Okay, what’s next?

CD: What’s next? Well we keep up the fight! the problem is not going to solve itself and every single joule of energy we can mobilise is vital. Every gram of plastic we can avoid consuming, reuse or in last resort send to recycling

EM: True recycling-

CD: -Indeed, is a step in the right direction.

EM: Yeah but who else can we mobilise? Who are the people or organisations that have real leverage in the story?

CD: Uh…industry you mean?

EM: I don’t know…. Yeah, like, a company like Procter & Gamble puts X billion products on the market everyday, what are they doing? And the oil industry? Isn’t plastic production their new brainchild now since they know that oil for fuel is going to disappear eventually?  

CD: Shhhh Eleen, be careful, you’re going to get us in trouble. We can tell the truth but not too loud. Because you’re putting your finger on the real problem here.

EM: Yeah but it feels no one wants to talk about this?!

CD: Should we?

EM: Aren’t we supposed to go to the root of the issues we investigate?

CD: Okay,, so we should go and see what industry has to say then.

EM: I think we should

CD: Can we try to do this with an open mind and no preconceived ideas?

EM: No preconceived ideas? You mean as if our industry and our societies’ economic model are not the real root cause of all this?

CD: I mean, like trying to understand how those guys are thinking, for real, without judgement. Then we let our listeners draw their own conclusions.

EM: Sure! But you’re going to need to double up on meditation.

CD: What do you mean?

EM: It’s going to be way too tempting for you to make spicy comments.

CD: No, I’ll be fine. It’s part of the game, we need to be open to all perspectives out there. We cannot say we know better why and how, just like this.

EM: Alright!

[17:31]

EM: Whew! I really feel like we’re not done solving all this.

CD: But we are patient, Eleen. Good things take time.

EM: Yes! And to all our listeners: you should know this series is going to keep unfolding during the year, sometimes other themes will be published in between,

CD: We publish when we have something solid.

EM: Yes, so stay tuned – hopefully we can help you look at all this in a new way.

CD: We’ll be back soon with more green knowledge, inspiration and hopefully less plastic. Keep up the good work in the meantime!

END

This is the fifth episode of our series about Climate & Finance. Missed the three first chapters? You may want to go there first: Episode 1 // Episode 2 // Episode 3 // Episode 4-1 // Episode 4-2

Today we get practical. Earlier in the series we clarified the role of asset owners in helping us stay below the 2 degree goal of the Paris Agreement, and talked about how they should benchmark the performance of their investment portfolios. But how does this work in practice? Good news: Models and tools are under way and some of the biggest EU asset owners have accepted to disclose their data and put their equity portfolio to the test bench.

The tool we discuss is an assessment on forward-looking scenario-based metrics conducted by WWF and the 2° Investing Initiative in 2017. We talk to asset owners who have been through the exercise and discuss challenges to overcome, the TCFD recommendations released earlier this year and review what’s coming up in 2018. Happy listening!

Guests:
• Magnus Billing, Alecta
• Andreas Stang, PFA
• Paddy Arber, Aviva
• Sebastien Godinot, WWF

Resources:

Paul Simpson was taken from The Financial Stability Board ‘s Taskforce on Climate Related Disclosures, Paul Simpson, CEO, CDP [Video]

Task Force on Climate-related Financial Disclosures [Website]

Recommendations of the Task Force on Climate-related Financial Disclosures Final Report Introduction – Task Force on Climate-related Financial Disclosures [Report]

Recommendations of the Task Force on Climate-related Financial Disclosures Final Report – Task Force on Climate-related Financial Disclosures [Report]

Biggest EU investors are partly aligned with Paris Agreement but more efforts needed – WWF [Article]

MADE POSSIBLE BY:
	WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature.

Produced by Camille Duran
Senior Editors Eleen Murphy
Published by Eleen Murphy

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Coming soon.

China doesn’t want our plastic waste anymore. This sent a shockwave throughout the plastic recycling industry and left all of us wondering: where do we go from here? Will new markets open up, or will we (finally) have to deal with our own problems at home? Will the EU Plastic Strategy save us?

In this episode, we discuss the current thinking and upcoming trends on this issue. It’s challenging. We also debrief on the recent live Talk Show in Brussels about European plastics, global markets & China, and set the stage for our next episode where we dive even deeper.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Eleen Murphy [EM]: Are we in China yet?

Camille Duran [CD]: Hong Kong actually.

EM: Ah okay. Maybe we should remind our listeners how we got here, while the crew throws the anchor?

CD: Sure. In episode four and five of this series about ocean plastic, we reviewed what happens to post-consumer plastic, after you put it into the recycling bin.

EM: We did some GPS tracking internationally to follow shipments and better understand where – and in what conditions – plastic scraps are taken care of.

CD: Not sure you want to know really, but if you do, take it from episode four.

EM: We clarified a fundamental idea: The plastic that’s in the ocean comes from the western world too.

CD: even if much of it gets into the ocean from just a few asian countries.

EM: Yes, a lot of the plastic disposed of in those countries is plastic that we in the west exported there in the first place.

CD: Basically the whole plastic scraps market is…

EM: A race to the bottom.

CD: A race to the bottom.

EM: And we left it at?

CD: Waking the dragon.

EM: Right, it’s getting hot.

CD: Is it really?

EM: Well if I understand correctly what you told us, China, which imports more than 60% of the world’s plastic scraps –

CD: – which we don’t want to deal with at home…

EM: – has decided to ban those low-value imports as of January 1st, 2018. In other words very soon.

CD: Millions of tons of low-grade plastics are going to be blocked by Chinese authorities starting now, pretty much.

EM: Big shake on recycling markets.

CD: Big, big shake.

EM: Conclusion?

CD: Conclusion: you have one more plastic Christmas to go, and then, we have to stop sending our trash plastic to China. Okay?

EM: What happens after Christmas?

CD: Well, there is New Year’s Eve, and then usually people go back to work?

EM: No, I’m talking about plastic…

CD: Ah yeah, right… Well that’s what we are going to discuss today. What is the future of plastic scrap markets?

EM: And what is the right thing to do!

CD: [Laughs] The right thing to do?

EM: What?!

CD: Do you think people care about what’s the right thing to do?

EM: Uh…I think some people, yes!

CD: [Laughs more]. Okay, okay, we’ll talk about what’s the right thing to do, in case anyone cares.

EM: Our listeners care about the right thing to do, I’m sure!

CD: Okay, okay, I know, I know. Actually I should say: if you are not here to do the right thing, better go live on Planet Mars, I think there is an expedition leaving soon.

EM: We can get you a ticket.

CD: Yes, we’ll pay for it actually.

EM: ok, back to the dragon.

EUROPE REACTS TO PLASTIC WASTE BAN – NEW MARKETS ON THE HORIZON?

03:28

CD: So you know we had a live talkshow last week in Brussels where we talked about just this. European plastics, global markets & China.

EM: Yes! Tell us about it, who was there?

CD: A nice mix of people that are dealing with the issue first-hand. It was co-hosted by the Rethink Plastic Alliance, which represents the voice of European NGOs in the plastic debate, and Plastic Recyclers Europe, which represents a large group of European recyclers – actual recyclers, those who operate infrastructure and produce secondary raw materials.

EM: Oh so not the brokers who trade materials on global markets?

CD: No. They were in the room as well, but yeah, it’s another culture and other business objectives.

EM: This is good to clarify actually. The recycler’s objective is to develop domestic capabilities for plastic recycling. The brokers are more interested in finding destination markets for materials, wherever they are… and whatever happens next.

CD: Complete different job and mission.

EM: Right.

CD: We also had representatives from Asia, who were in Brussels that day to highlight the impact of European Plastic on Asian Waste Management, and so they passed by the talk show to share a few points. Froilan Grate, Dharmesh Shah…. You know who else was there?

EM: Martin Bourque?

CD: Yes, our recycler turned spy, from our previous episode. And his Chinese contact Liwen Chen. She is an activist & researcher, the one who went on site to inspect the plastic final destination that Martin’s GPS tracker revealed.

EM: Wow, what a panel!

CD: It’s not over. I won’t name them all but worth noticing that a representative from the European Commission was here as well – Anna Ablazevica Policy Officer at the DG GROW – they cover Internal Markets, SMEs, Industry, Entrepreneurship etc.

EM: Mmh?

CD: And Nadine de Greef from FEAD, which is the federation representing the waste management industry in Europe. So yeah, it was good.

EM: Nice!

CD: So I am not going to redo the whole talkshow here but try to give you the highlights.

EM: Yes and we will post the link to the full briefing. The session was livestreamed and documented, so look for the link in the episode notes.

CD: So there was some discussion about why this ban is happening, did we see it coming bla-bla-bla. And some saw it coming from far (a few recyclers for instance), and some didn’t.

EM: Like the Commission.

CD: Right, and if you don’t see that kind of shake coming, you really can’t adjust in a timely manner.

EM: I see.

06:18

CD: Which takes us to the discussion of what is going to happen.

EM: What is going to happen if more than 60% of the market for low-grade plastic disappears?

CD: Well is it going to disappear? or shift to somewhere else?

EM: Oh, you mean that plastic will go to other countries instead?

CD: It’s difficult to predict exactly what is going to happen, and in what amounts but let me put it like this:

Some are worried this low-grade plastic that has no value what so ever is going to go to other asian countries, where the processing standards are often lower than they are in China.

EM: Really?

CD: Yes, except for Malaysia maybe. But yeah, that’s a concern. Actually there are many Chinese families that are already moving away to set up shop in bordering countries. And I heard a few times that Africa is going to be the next destination for the trash. Countries like Nigeria seem to be ramping up as a destination for plastic scraps.

EM: No…

CD: Now let’s be clear, no country can take what China was taking in quantity. Far from it.

EM: So…

CD: So yes, probably a good part will spread on new markets.

EM: And the rest?

CD: And the rest is probably going to be dealt with in Europe.

EM: What do you mean?

CD: [Coughing] Incinerated.

EM: Sorry?

CD: [Coughing] Burnt.

EM: Ohh, so we’re going to burn what we can’t export…

CD: Yes, our good friends the cement kilns and waste to energy plants may have a couple of years more work before we can close them down.

EM: Well, at least this way we will be breathing our own plastic from the air of our own cities, instead of sending our trash around…

CD: Yeah, some of it at least. Martin who runs a recycling program in California says that the price per tonne he has to pay to export it is reaching the price of landfilling it in California.

EM: So maybe that’s going to force us to go from “not in my backyard” to “in my backyard?”

CD: At least for a part of the stream.

EM: Okay so in the next couple of years, some will probably reach new markets, and some will probably be burned here in Europe?

CD: Some millions of tonnes, yes.

EM: Ouf. Hey, what is the likeliness that other Asian countries will follow the Chinese policy, and ban plastic scrap imports too?

CD: It is a possible scenario and some even call it an upcoming trend. Difficult to say at this point, but yeah, it could happen.

EM: And so then what?

CD: So if all those contries start to refuse all this low grade plastic coming from Europe and the U.S….I let you imagine.

EM: We’d finally have to deal with our own sh*t at home!

CD: You mean like internalising the impact and cost of our plastic? [Laughs].

EM: It is really that far fetched? I mean, isn’t the EU setting up it’s plastic strategy at the moment? This Chinese ban is a huge opportunity in the long term. Perfect timing for integrating ambitious measures that avoid this low-grade plastic being put on the market in the first place!!!

CD: Haha, Eleen, you’re funny. Okay. So you want to talk about the EU Plastic Strategy, right?

EM: Yes!

EU PLASTIC STRATEGY AND LEGACY BUILDING – WE’RE TIRED OF THE SMALL STUFF

09:47

CD: Sorry to spoil it, but we are not talking about a weapon that could kill a dragon just yet.

EM: Tell me more.

CD: Let’s bring our container ship back to Europe then.

EM: Can we take the Suez canal this time? It’s shorter.

CD: Not afraid of pirates?

EM: I am one of them, remember?

CD: Ah yeah, how do you do it again?

EM: Yaarrrrgh!

CD: Ah yeah right. Back to Europe then.

CD: Ok, so those of you who have been following our series on the Circular Economy know that the European institutions are currently cooking a Circular Economy policy package which is supposed to take us to a resource efficient Europe.

EM: Yes, we have seven episodes about this.

CD: Now as part of that process, it was announced that the Commission would come up with a Plastic Strategy by the end of the year, to lead the way, bla-bla-bla.

EM: And?

CD: And it’s a process where industry and brands are perceived as very influential, I should say?

EM: Hm, and why do you say that?

CD: There was several versions of the draft that were leaked over the last few weeks, and you can see the evolution of the text.

EM: Evolution in what direction?

CD: Well, there are some measures that are being weakened as time goes by.

EM: Measures like what?

CD: We are going to talk about it, it’s a bit delicate. But first…But first:

Something that struck me many times since I follow this discussion of circular economy, plastics and change in general.

EM: Oh no, i know you, you’re warming up for a punchline somewhere…

11:43

CD: Have you ever thought about your legacy, Eleen?

EM: I’ve never thought about it ever in my entire life, Camille.

CD: Really? How you will be remembered, what trace you left on society, on the planet, what was your impact?

EM: Um, maybe I should think more about this, yeah.

CD: You’re doing great by the way.

EM: Heh. Where do you want to go here?

CD: Some people care about their legacy more than others. But politicians and brands do care. Very much.

EM: That’s for sure.

CD: Brands care because it is directly connected to their equity, to their value on markets and to their survival even. Most politicians care about their legacy too. It is the fuel for a political career.

EM: Yes?

CD: Ask yourself: who do you remember a few years down the road?

EM: Oh no…he’s going to transform, I just know it… Sorry guys, this happens sometimes.

CD [Transformed]: Ask yourself: who do you remember a few years down the road?

The people who did the small stuff, the shy policies, the soft measures that do not make any waves? The incremental game that no one wins in the end?

Or the people and brands who got on their horses,  jumping ahead of the curve, those who drive change without fear, the real innovators that make the world measurably better?

Which one?

EM: The second one…?

CD [Transformed]: Which one:

The people and brands who are on the defence serving consumers and voters the bullsh*t that everyone can smell from kilometres away? Playing the clock, the mandate, the quarterly results?

Or the people and brands who show real passion, conviction and who dare attacking a problem at the source. Even when it’s risky, when it’s early, when others are still talking?

Which one?

EM: The second one again. The real problem solvers!

CD [Transformed]: That’s who you remember. You want to be the first-mover into a future that’s already there. You want to lead and inspire, not cheat and conspire. You want to go beyond intentions. Beyond just a vision. Leave the small stuff to others. You’re here for what really matters. You want to be the one people talk about, or tomorrow you’ll be out.

EM: Right!

CD [Transformed]: Once and for all. The one people look up to because you have big ba- um…

EM: Big ideas!?!

14:44

EM: Wow, are you back? You okay? What was that?

CD: Yeah, you get the point. We are tired of the small stuff.

EM: I feel you. So that’s your introduction to the EU Plastic Strategy chapter?

CD: That’s my introduction to being a human being on Planet Earth. We deal with change everyday.

EM: So this applies to the debate on plastics.

CD: I think so. And that is what we are going to cover in next episode. What is the small stuff, what is the ambitious stuff we can hope for? Where will we fall, and how do we go from there?

EM: What legacy is this Commission going to leave behind? Coming soon on Green Exchange.

CD: Share the podcast with your friends and colleagues. We are going to start talking about lifestyle, movie stars, and real solutions to the ocean plastic problem.

EM: You know where to find us!

CD: We’ll be back soon with more green knowledge, inspiration – and legacy checks. Keep up the good work in the meantime.

END

Martin Bourque was suspicious about where the plastic from his recycling facility in California was going. He put a tracking device into a plastic bale and tracked it all the way across the world to a rural recycling facility in China. What did he find there? This is part two of Martin’s story, and it’s an eye-opener.

This episode brings up an important point: this is not just an American story – we share some facts from Europe that show we’re in this too. There is way too much plastic being produced that nobody wants. We’re paying to get rid of it, and the price is way too high.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

Picture credit: South China Morning Post.

EPISODE TRANSCRIPT

Camille Duran [CD]: Hey Eleen, you got your cup of coffee?

Eleen Murphy [EM]: Just tea actually.

CD: Oh you don’t drink coffee?

EM: No, I don’t like coffee. Strange fact!

CD: Alright. So in previous episode we started a story that we did not finish.

EM: Yes, because you like cliffhangers!

CD: Everyone loves cliffhangers!

EM: Hmm, I don’t know. They make me arrrghh! Hulk smash!

CD: Woah, okay…

EM: I’ve been watching too many Marvel movies, sorry…

CD: Okay, just hold on a few more minutes. For those of you joining us just now, you probably want to rewind a little bit to the previous episode.

EM: Episode four.

CD: So you can fully understand what we’ll talk about today.

EM: At this point in the series, we are talking to Martin Bourque who is telling us a story we got in exclusivity.

CD: Martin runs a collection service for recyclables in Berkeley California. His facility is sorting the materials collected from residents and sending them to recycling markets.

EM: He was worried lately because he didn’t know where his plastic was going to end up.

CD: Berkeley residents trust that their plastic is going to be recycled in proper conditions.

EM: Which no one is really sure about lately.

CD: So he put a GPS tracking device in one plastic bale – you know those big cubes of compressed plastic – to see where it would end up.

EM: And here we are, right?

CD: Yes pretty much. The shipment had disappeared from the map two weeks ago.

EM: The tracking device could not pick up any signal,

CD: Or there was a technical problem, battery was dead or device broken, couldn’t really know.

01:30

Martin Bourque [MB]:  But suddenly, one day – bingo! It’s in Hong Kong.

EM: Hong Kong.

CD: Kind of expected, no? But really, looking at recycling markets after the crash in 2015, every thing was possible. But yeah, Hong Kong.

MB: And there it is. And clearly at this point it’s picking up a cell signal because it’s got to still be in the shipping container. So it can’t see the sky, it can’t see a satellite, so it’s picking up a cell signal in Hong Kong. [It took] about two weeks to get there. And it sat in that port for a few days, and then it went up the South China sea, into the mainland of China to another port.

CD: I pause here just to mention it’s quite common for containers to go through different ports before destination, or to be brokered on the way. That’s why the data from the customs or whatever you can get from harbours is usually not very telling.

EM: Well I would disagree with that, you can still draw a few conclusions.

CD: You have found something! I know you.

EM: Haha..well, let’s just say I put my hand on three years of plastic export data in a European port.

CD: Oh yeah? Which one?

EM: I don’t really want to tell, I am not sure it’s public information.

CD: North or South?

EM: Benelux.

CD: Okay, there are two main-

EM: No, no, no. Stop. I’m not going to tell you.

CD: Okay. One port in Benelux. What does it say?

EM: It shows a breakdown per type of plastic scrap per destination port, and exact amounts that were shipped each year.

CD: And how much?

EM: Let’s finish Martin’s story first maybe?

CD: Ugh…Eleen!

EM: Haha. Hey, now you know how I feel!

CD: So where were we?

EM: South China sea after the first stop in Hong Kong.

CD: Ah yes.

MB: And then we could track it and it went to a few other locations: it went to a primary sorting facility, and at this point we’re pretty sure it came out of the sea container.

EM: How do they know the bale came out of the container?

CD: Well, from the GPS location they can go on Google Maps and see in satellite view what the area looks like…

EM: Ah, smart.

MB: We could see that there were sea containers, or shipping containers, at this facility. And we could also see from the mapping, from the satellite imagery, that there were bales of plastic in a yard. But then from that place it went to another location-

EM: Another location?

CD: Yep.

MB: – and probably went as open bales or maybe they had even cracked open the bales and started to sort. And it moved from there to a secondary facility where it finally died, and I don’t know if it died because of the battery, or because they dismantled it, or somebody found it and they crushed it – we just don’t know.

EM: So at this point we have no tracking device anymore.

CD: The device is dead.

EM: But?

CD: But, luckily it seems like this was the final destination!

EM: Tell me more!

INFORMAL RECYCLING FACILITIES TAKING OUR PLASTIC WASTE

04:57

MB: So it’s in Southern China, and in a rural community in – not a backyard facility but a pretty informal sector industrial area in a rural community. So there’s lots of little sheds and shacks…

CD: So not crazy rural, not crazy industrial,

EM: But informal?

CD: Informal.

EM: And that’s all you can see from the imagery, right?

CD: Yes, but it’s not over…

MB: So we then connected with some partners through the Global Alliance for Incinerator Alternatives and a colleague of our s who is a specialist on plastics in China went to visit the facility. But this was months later when she got there. It was very interesting; she got photos of the location and got to talk to people there.

EM: Wow…

MB: [She] could see, basically, everything was sorted on the ground. They had one washing facility and the water from that went straight into the river – there was no environmental controls on the washing.

CD: So just to put things back in perspective: plastic that was put in the recycling bin in the western world, is now on the ground in South China in an informal facility with no environmental control. That’s what we’re trying to prove here.

MB: So, they would take a bale of this plastic which probably has maybe seventy thousand pieces of plastic in it. Everything from strawberry containers to take-out containers, to yogurt tubs…all kinds of little things that get in there like caps, lids, forks, spoons, plastic utensils. Different colours – you’d have clear, black, green, yellow…. And each of those have those have to be sorted. So they’re probably sorting into thirty or forty different categories of different resins of plastics that can be put together for recycling.

EM: What? Thirty to forty categories?

CD: Yes, so those workers have developed skill to recognise what kind of plastic they have in hand, which is quite tricky to be honest.

MB: Different colours of plastics, different grades of plastics – whether it’s flexible plastic or really rigid plastic with different kinds of additives in it. And so all that’s being just on the open ground with people squatting on it. Sometimes, to figure out what kind of it is, they’ll burn a little bit of it and smell it, which is really horrific and very toxic.

EM: What?

CD: Yes you haven’t seen this in the documentaries?

EM: No.

CD: Smell is a great way to identify plastic, yes you need to burn a little bit of it first but hey – it’s recycling! Actually it reminds me of the old days – I used to do this as well at school, um….not for recycling, but…[laughs].

MB: But that’s the way the categorisation of some of the plastics is done if they can’t figure out what it is by sight, or sometimes by tapping it for the sound it makes. And so they’re touching everything, and it’s all food contaminated, it’s pretty dirty. It’s got a lot of grime on it.

EM: Ugh…

MB: So that’s being sorted into bags or bigger baskets or buckets, and then those get aggregated into larger bags, gaylords, or some kind of container. Then once they’ve got enough of one kind of material, they’ll put it through a grinder that chops it up into the size of a quarter or maybe half an inch in diameter.

CD: That’s about one centimetre.

08:39

MB: And then they put that into their washing tub and they wash it and get it all nice and clean. And then they will dry it. That dry [stuff] is called flake – when it’s all chipped and clean. And that flake would either be sold as is (depending on the kind of plastic), or it would be taken to a nearby facility where they melt that down and extrude it out into long strings – they look like spaghetti noodles. As those cool, they get chopped up into tiny little pellets that are called nurdles. Then that gets put into bags and then those bags are sold.

EM: Wait wait wait: from those bags with thirty to forty different categories, to grinding in small one centimetre pieces, to melting, to…

CD: …to spaghettis….

EM: That are then chopped into small pellets…

MB: …that are called nurdles. Then that gets put into bags and then those bags are sold. And in China, mostly that goes for low-grade domestic manufacturing goods you could think of, like cheap kids toys or hair combs, things like that. Semi-durable plastics that probably end up in the garbage pretty quickly.

CD: Yeah basically, since we can swear on the show, I would call this: all the sh*t plastic that is really the last thing you want in your home.

EM: Okay…so this is what Martin’s colleague saw when she got there, or?

CD: No, so this is how this kind of operation is running when they receive plastic bales. The thing is…

MB: She’s not seeing any imported plastic there, she’s not seeing anything from the U.S. So she asks them, “Well, do you get import-grade materials?” And they said, “No, no, we haven’t got that for several months. That market is totally shut down. We wish we could get that stuff, but we can’t get it anymore”.

This was a big concern for us, because first of all we had a facility that we felt okay about. It wasn’t great, it wouldn’t be permitted in California.

PLASTIC RECYCLING MARKETS – IMPOSSIBLE TO CONTROL

11:22

CD: So here he is talking about the facility they were working with at the very beginning, before the market crashed.

MB: But it at least had some water quality and air quality controls, and decent labour standards. But now we don’t even know where it’s going, because our last tracker made it to China, and now somebody goes to look at the facility, and they say, “Oh, we can’t even buy that stuff anymore”.

CD: So that’s one first thing to learn from plastic scrap markets in Asia. They are impossible to control, you think you know where your stuff is going, but it’s changing all the time.

EM: I see.

MB: And what’s happened in the meantime is while the amount of stuff that we’re collecting keeps going up – every month we get more and more of it – but the price of it keeps going further and further down. We used to get twelve dollars a tonne for it, which is not very much at all. And then we weren’t getting anything for it, we just had to give it away. And now we have to pay to get rid of it.

We’re starting to pay almost as much as it costs to send something to the landfill. It takes about sixty dollars a tonne to send garbage to the landfill in this area.

CD: And we’ll get back to this debate about shipping it to pseudo-recycling versus landfill, versus incineration, because it deserves its own discussion.

EM: Okay.

CD: I stay on markets because then they found out their stuff is not even going to China anymore.

MB: When we heard that our stuff wasn’t even going to China anymore, that gave us great pause. Because we know that in Southeast Asia there are a lot of countries that don’t even have the level of development and the regulatory context or infrastructure capacity that China has. So when you’re paying to get rid of it, you’re paying somebody to take your scrap, there’s an incredible incentive for them to get paid to take that scrap and then just get rid of it in the cheapest possible way.

That sounds to me like a race to the bottom.

CD: This is fundamental. You don’t need to be a Harvard economist to understand that if something is put on the market, has no value (actually the contrary), you are paying someone to get rid of it, and this negative value chain is not controlled – then you have a serious problem.

EM: And we are talking about millions of tonnes every year.

MB: And so that made us even more concerned. So we sent out another tracker. Actually, we sent out a few, but one of them succeeded.

14:04

CD: I stop here.

EM: No don’t do that!

CD: Not only for the pleasure of the cliffhanger. But also because there are quite a few conclusions to unpack here and I want to make sure we look at this with a constructive mind.

First of all – if you are interested in tracking stories: we were invited to host a live talkshow about this in a few days. A few partners coming together, and Martin may even be with us in person to tell us how this ended. This will be in Brussels on November 6th, it’s coming very soon, link in the episode notes.

EM: I can’t wait!

CD: Next point: imagine a properly funded research program that could deploy these trackers at scale…

EM: Yeah…?

CD: That’s all, just imagine.

EM: Not sure people want to know where their plastic stuff is going….

CD: Something else I wanted to mention at this point:

I hear a few sceptical voices: “this is a U.S. story, who is telling me the same may be happening with the European plastic recycling?”

EM: In the previous episode we shared some public numbers about all the plastic that is going to Asia.

CD: Right.

PLASTIC EXPORT TO CHINA – JUST AN AMERICAN PROBLEM? WHAT ABOUT EUROPE?

EM: And in case it’s not enough, maybe now is a good moment to share some of the figures I got from this port in Benelux that I can’t name.

CD: Please!

EM: Well thanks to our in-house spreadsheet consolidation capabilities, we can say that…

CD: Drumroll….

EM: Out of all destinations for exported plastic scraps, almost 60% was going to China,

CD: Surprise.

EM: 18% to Hong Kong.

CD: Probably before going somewhere else.

EM: Yes. And if you sum China and Hong Kong, it’s more than a quarter million tonnes of plastic. Just for 2016, just from that one port in Benelux. I’ll let you imagine.

CD: Hmm.

EM: And then smaller percentages go to Vietnam, Malaysia, India…less than 5% each time.

CD: So it’s safe to say that our plastic scraps probably receive the same treatment as Martin’s plastic bales.

EM: Yes, definitely. Why would it be different?

CD: The only thing that matters is what’s in the container. If it’s in a container to Asia first of all it’s that it makes financial sense to send over there.

If it’s clean material and is a valuable type of plastic on asian markets, it will probably be recycled in some way.

EM: Downcycled, actually.

CD: But impossible to know how, where, in what conditions, following what standards.

If it’s not that clean and valuable, then first of all you are probably paying to get rid of it rather than selling it for a good price. And secondly, you can imagine what happens to it when it reaches Asian megacities where they won’t know what to do with it.

EM: That’s the part you see in documentaries and YouTube videos.

CD: So take all that plastic that has no value whatsoever, and that we basically dump on Asian waste markets every year. Add all the low-grade plastic that other western countries send over there. Add up all the post-consumer plastic scraps produced within those asian countries,

EM: By their own population, you mean.

CD: Right. You get millions and millions of tonnes of plastic every year that recyclers don’t want, that informal waste pickers don’t want and…

EM: Hey, wouldn’t that correspond to the millions of tonnes ending up in the ocean every year from those five Asian countries we named in last episode?

CD: I feel like Sherlock Holmes.

EM: Well, millions of tonnes of worthless plastic dumped on the shore or river sides, and millions of tonnes of worthless plastic enter the ocean every year.

CD: There must be a connection?

EM: I would think so…

CD: Well, some stakeholders do not want to see it.

EM: No?

CD: Yeah we are going to have to tell the truth… again.

EM: Another annoying journalist telling the truth, eh?

CD: At this point we just wanted to demonstrate that what you see in the ocean is actually western plastic waste. Not only asian plastic waste.

EM: I think this is very clear by now.

CD: In the next episode, we are going to keep climbing upstream and start talking about what European industry and policy makers can do right now to face this reality.

EM: It’s now clear that this is where actions are needed.

CD: Not in pretending we are going to help asian countries fix their problem.

EM: It’s also about what’s going on in our continent.

18:52

CD: Eleen, I forgot to tell you one detail.

EM: What?

CD: It’s a little parameter we should take into account…

EM: Come on, tell me.

CD: China doesn’t want our plastic anymore.

EM: What?

CD: Millions of tonnes are going to stay at the Chinese border as of January first 2018.

EM: I’m sorry!?

CD: Official order. All that trash woke the dragon, as we say. The Government announced late June that they are banning imports for twenty-four categories of materials, including all the plastic crap we have been sending for years.

EM: I can’t believe it.

CD: This is a huge shake on recycling markets.

EM: They are tired of being the trash pile of western countries maybe?

CD: Maybe…. So that’s something we are going to talk about in next episode.

EM: I bet.

CD: And most importantly what we can do about it, or what we should do about it!

EM: How do you fight a dragon right?

CD: Coming soon on Green Exchange!

EM: In the meantime, don’t forget to sign up for our live talk show in Brussels on November 6th. Link in the notes.

CD: And you can tell the truth to your neighbour about his yogurt tub floating in a Chinese river, but just make sure he keeps being a good citizen. Separating your waste at home is important.

EM: Even if the system is still far from perfect

CD: Thanks again to Martin and everyone who is helping us with this series.

EM: A lot of research is going on right now

CD: We’ll be back soon with more green knowledge, inspiration – and dragon moves. Keep up the good work in the meantime!

END

Millions of tonnes of plastic enter our ocean every year. If we’re going to stop this flood, we need to know where the leak is. Is the in countries where huge amounts of plastic enters the sea? Would that explain how a plastic wrapper dropped in a recycling bin in England ended up on a Chinese beach thousands of kilometres away? No, it is more complicated than that – time to cast a wider net.

We’re not the only ones looking for answers. In this episode, we share the story of Martin Bourque: the man who put a GPS tracker into his plastic bale in California, and found out the truth about where his plastic was going.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

Picture by Ed Dunens. CC/BY.

EPISODE TRANSCRIPT

Camille Duran [CD]: Hey do you like facts?

Eleen Murphy [EM]: I prefer stories.

CD: I tell you a short one, it’s the story of human society dropping four hundred kilograms of plastic in the ocean every second.

EM: Yes I heard this scary number. From our EU First Vice President at the Ocean conference in Malta, right?

CD: Yes. Should we double check his calculation by the way?

EM: I don’t think it’s necessary.

CD: How many seconds in a year…?

EM: Come one….

CD: Help me out!

EM: Okay fine…I would say 31,536,000.

CD: Okay so he is on twelve million tons a year, which is a bit above what we’ve found out. But yeah, let’s say everyone seems to agree it’s more than eight million tons of plastic a year that end up into the ocean.

EM: Who cares about the exact number. It’s millions of tonnes, it’s way too much, let’s fix it!

CD: Right. Welcome to our ocean series, a fifteen episode investigation where we tell the truth.

EM: That’s your tagline?

CD: Uh, a fifteen episode investigation where we tell the truth and talk to interesting people.

EM: Wow. I think our listeners are really impressed by now. Why don’t you tell us what’s on the menu for today?

CD: In the previous episode, we got to the conclusion that the best thing we can do to solve plastic pollution is working upstream. Making sure no plastic enters the ocean in the first place.

EM: Never ever again.

CD: So for the rest of the series, I am taking you upstream. Starting now.

EM: Okay?

CD: On the menu for the upcoming episodes: we’ll look at a map and point fingers; then we’ll realise we’re are pointing fingers in the wrong direction; we’ll follow plastic upstream, all the way up to your kitchen.

EM: What? My kitchen?

CD: We explain why recycling markets will have a big, big big problem starting January first, 2018.

[News Audio Clip]: China has notified the World Trade Organisation that it will ban the import of twenty four different types of garbage.

CD: Which means we will all have a big, big problem as well. We discuss how the EU Commission is integrating (or not) this big, big problem into the upcoming Plastic Strategy. But before that, I will tell you a story we are the first ones to break:

Martin Bourque [MB]: This is the first public interview, and I figured; a podcast within the industry is a little different than the New York Times [laughs].

02:47

EM: Oh that’s the story of the recycler who hides GPS tracking devices in his plastic bales.

CD: Yes, we should call it a guide actually: how to find the final destination of your plastic bale if you are on a tight budget?

EM: I love it.

CD: We’ll make a few episodes out of all this.

EM: Let’s get started I can’t wait.

CD: Where does ocean plastic come from?

CHINA, ASIA, EUROPE, USA – WHERE DOES OCEAN PLASTIC COME FROM?

CD: So Millions of tonnes of plastic enter the ocean every year. I am sure you will agree that the first logical thing to do is looking at where this is happening?

EM: What countries let that plastic fall into the ocean you mean?

CD: Yes, and how exactly? Rivers, shore, how the hell did we get to such big numbers?

EM: Yeah, it’s not like a small leak into the system. Good place to start!

CD: Well… let’s get to the point, no need to drag it out. It seems that 80% of ocean pollution comes from land activity.  

EM: So the rest comes from maritime activity,

CD: Yes, and we’ll get back to this later in the series. Looking at land: China, Indonesia, Philippines, Vietnam, and Thailand are the countries where most plastic enters the ocean, accounting for more than 60% of the total.

EM: Wow,

CD: Now those stats usually don’t include what’s coming from rivers. There is some discussion at the moment about how to account for rivers, we’ll get back to this later on in the series.

EM: Okay so the problem mainly comes from South East Asia?

CD: Right. That’s what people tend to think “Ocean Plastic? It’s because of the Chinese. At home I separate my plastic waste and then it gets recycled”.

EM: Okay, are you saying my plastic doesn’t get recycled?

CD: Less than 6% of your plastic gets recycled, Eleen.

EM: What? Less than 6% What happens to the rest of it…!?!?

CD: Hmm… Let’s take it step by step so we don’t lose anyone. And this way we can also be precise and accurate.

EM: Man, I can’t believe it.

CD: Let’s break it down. What we can say for sure is that in Europe, roughly 45% of our plastic is exported to Asia. This is public data. Links in the episode notes. The US also exports massive quantities of plastic to Asia, we’ll get back to that.

EM: So if most of the ocean plastic comes from China, Indonesia, the Philippines, Thailand, and Vietnam, and we export millions of tonnes to those countries, then chances are…our plastic ends up in the ocean too?

CD: Chances are, as you’re saying. Actually, it’s more than “chances are”. China, for instance, imports at least 55-60% of the rest of the world’s plastic. It’s not like if there was a sign on Chinese beaches and rivers saying, “Asian plastic only, European plastic gets recycled according to human rights and planetary boundaries”.

EM: No, I get you. From the point plastic enters those markets in the first place it’s difficult to track.

CD: Difficult but not impossible.

EM: I see you coming…

CD: Yes?

EM: Wait before we look at final destinations for our plastic, could you explain how things for post-consumer plastic? For those who may not be aware.

CD: Yes sure.

EM: Let’s say, all I know is…I buy products at the supermarket, with all their beautiful packaging, and now it’s in my home.

CD: Well, all this single-use plastic probably ends up in the bin shortly after…

EM: It does…

CD: Okay, so let’s take the scenario where your city placed a separate bin for plastic, or a bin for all recyclables. Then you sort your plastic and throw it in there.

EM: Right

CD: You did the job, you’re a good citizen. And regardless of what happens after and what I am going to say now – you should keep being a good citizen, it really matters even if only 6% gets recycled, tomorrow it may be seven, then eight, etc.

EM: Hm yeah?

CD: So you’re plastic packaging is in the bin, useless.

EM: Useless.

CD: It’s at this very moment that the real adventure starts.

07:37

CD: It starts there, in this street container, with all of the other unhappy plastic packaging items

EM: Unhappy?

CD: Yes, because they have been used for a few seconds only, and we already call them waste.

EM: Ah.

CD: They get picked up by a truck. This is where they meet a lot of other unhappy friends, unhappy because they too-

EM: -have been used a few minutes only. Okay, keep it moving…

CD: Ok, they all travel together for a few kilometers to a sorting station, or what we call a MRF: A Municipal Recycling Facility.

EM: Ah that’s where all those trucks go.

CD: Yes. Trucks enter the yard, get on a huge scale so the station can track how much material is coming in, and then they go drop all the materials in a pile. From there the materials get sorted into different fractions, sometimes using automated systems. Sometimes with human workers that separate by hand the different materials from conveyer belts.

EM: Okay…

CD: From there plastics are regrouped by types. Typically they are compressed and tied into plastic bales to optimise their handling. You can just imagine big cubes of compressed plastics, of various qualities. From there, each type of plastic is going to take a different road.

EM: Where do they go next?

CD: Well, it depends on a number of parameters, like where is the sorting station located, the shape of the regional markets for materials, disposal options etc.  To make it simple: the plastics that are easily recyclables in Europe will go to a European recycler if it makes economic sense to recycle them. That’s often the case for the PET for instance, which is the plastic type one.

EM: Plastic type one? What’s that?

CD: If you look under a plastic bottle for instance, there is small triangle printed on the plastic with a number inside it.

Number 1 means it is PET – Polyethylene terephthalate.

EM: So that’s easily recyclable.

CD: Let’s say it’s what has most value on European recycling markets today. Typically water bottles for instance – which by the way do not get recycled into other bottles. But that’s another story.

EM: Okay so type one is the most valuable. What happens to the other plastic types?

CD: Well there are the ones we don’t really know how to recycle. All the multi-layer packaging for instance, you know? Where plastic is mixed with layers of other materials

EM: Right, I hate those.

CD: Well now you hate them more, because they cannot really be recycled and the sorting station is either going to send it to a landfill, to an incinerator – not to say a cement kiln – or ship them to Asia.

EM: So the plastic that is not recyclable goes to Asia…

CD: We are generalising a little bit here. Let’s say it has no value what so ever, so you are going to pay someone to get rid of it. If your local landfill is cheaper than sending it to China, then you will landfill it. If a cement kiln is offering to burn it for fuel and you don’t mind the illegal part, that is what you will do. The thing about shipping it to Asia is that it’s extremely cheap.

Ships come from China to deliver goods in Europe or to the U.S., instead of going back to China empty, they fill the containers with plastic scraps and make a business out of it.

EM: Some people would call this carbon emission reductions…

CD: Right. There is also the plastic that we could technically recycle in Europe if it made economic sense,

EM: But it doesn’t,

CD: So they are getting the same treatment as the ones that are not recyclable. This is how your little friend the plastic packaging ends up in places where you don’t really want to send it in the first place: a Chinese dump, a landfill, an incinerator, the ocean, a dirty beach somewhere.

EM: I don’t know what to say. Is there a positive side to the story?

CD: Uhh… no. Basically, the conclusion is that European plastic scraps enter a commodity market. So typically sorting stations and recyclers are in touch with brokers who will coordinate the shipping of those plastic scraps all around the world.

EM: Okay, so basically if I run a Municipal Recycling Facility, I’m looking for what is the best value I can get for my plastic bales?

CD: Right.

EM: And there are brokers specialising in finding destinations for those materials.

CD: Right.

EM: So the brokers should know where it’s going, no?

CD: Sort of. You get a destination port and you don’t know what’s happening next.

EM: Damn!

CD: This is where Martin comes in.

EM: Martin? Oh yeah the man behind the GPS tracker story…

12:49

CD: Yes. [Movie trailer voice] “Coming next, a recycler puts a GPS tracking to find the final destination of the plastic bales he is exporting every week.”

EM: Okay, keep it moving!

CD: That’s Martin. Just to recap before we switch to spy-mode:

• We started from the countries that are dropping most plastic into the ocean.
• We looked at the contribution of European plastics to their recycling markets – if we can call them as such.
• We now understand the basics of recycling markets in Europe, we are able to track the containers back to the first destination ports.

I think that’s not too bad for a start!

EM: Yes and we we stuck at the destination port.

CD: Until I heard from that man.

MB: My name is Martin Bourque, I’m the Executive Director at the Ecology Centre in Berkeley, California.

CD: He found a way to track some of his shipments, all the way to their final destination.

TRACKING PLASTIC BALES – MARTIN’S STORY

13:43

CD: And in Berkeley they have been recycling since 1973.

EM: Wow!

CD: Martin and his team are deep into the recycling mindset. He operates an organisation called Ecology Centre, which among other things collect the recyclables in Berkeley. I think I actually met Martin and visited the station in 2013, when I was starting to get interested in materials…

EM: Wow you’re an old man!

CD: Right. Anyway, I want to thank him because he is not public about this story and he accepted to talk to us and let us publish it.

MB: This is the first public interview, and I figured; a podcast within the industry is a little different than the New York Times [laughs].

EM: Yes but New York Times is listening and is going to chase him now!

CD: It’s s an exciting story.

EM: Let’s get to it.

MB: Hey there!

CD: [To Martin]: Hey Martin, how are you?

MB: I’m good, how’s it going?

CD: Yes so first i asked him why he wanted to track his plastic bales, why was he suspicious about their destination?

MB: In 2013 we started collecting mixed “recyclable” plastic, and I say recyclable in quotes. At that time we had a pretty clear line of site to a facility in China where our broker out of the port of Oakland was sending the materials. And we had actually worked with partners in China, the Wuhu Ecology Center. And those folks had gone over and inspected the facility in China, and found pretty good labour standards and pretty decent environmental controls on the plastics recycling facility. They were actually making export-grade pellet and flake.

CD: But market crashed a couple of years ago, you may remember that?

EM: Yes, I was still young but I remember. And?

CD: And…

MB: We found out that our materials were no longer going to that facility at [indistinct], and that raised a lot of concerns for us. We had recently encountered the filmmaker of Plastic China and seen some pretty horrific footage of the informal sector in China.

CD: Plastic China is a film to watch if you are interested in those questions.

EM: Link in the episode notes.

15:15

MB: Where materials are being sorted by hand in backyards in pretty horrific conditions. They would pull out whatever was valuable and then the rest of it would just get dumped onto the side of the road or pushed into a canyon. So we were very concerned, as an environmental organisation that pioneered recycling and was the first kerbside recycler in the U.S.. We were very concerned that things we were telling our residents were being recycled, might actually be contributing the problems of ocean pollution and problems with air and water quality – as well as some horrific labour standards.

CD: Imagine a world where everyone in waste management cared the way Martin cares? About where materials go I mean!

EM: Yeah…it takes courage to face the truth, and not everyone is courageous.

CD: This is the least we can say.

EM: So, they knew and controlled where their plastic was going, market crashes, big mess, they don’t know anymore?

CD: Correct

MB: So, when we found that out, we started thinking: how can we find out where our stuff is going? Because, basically, the way it works is that we collect the stuff at the kerb; it goes to our sorting and processing facility and it gets baled up into these big bales that get put into shipping containers. Then, those shipping containers are sold as units and they get brokered by a brokerage firm here in California, and then they get sold to a broker in some other port in Asia.

Historically that had been Hong Kong, and from Hong Kong they’d be shipped to the mainland in China. But we couldn’t tell where it was going, we had no way of tracking. Once it left our broker’s line of sight, there’s no chain of custody that made it possible for us to see where it actually ended up.

CD: Same problem that everyone has, you don’t know what’s going on beyond the destination port.

EM: Tracking is difficult.

CD: Difficult, but not impossible.

MB: So we started looking around for some kind of GPS tracking device that could locate a bale of this plastic at its final destination.

CD: And they finally found one that matched their needs.

MB: So we really needed something that had satellite GPS location as well as an international cellular plan so that it could locate itself and send out a signal to be picked up and put on a map.

18:30

CD: So yeah, we won’t get too technical but basically there are two ways you can locate a tracking device: using GPS (the satellite), or using cell phone towers, which the devices connect to when they are in reach and the exact position is triangulated. It’s important for the rest of the story.

MB: We were inspired in part by the work of the Basel Action Network, who had recently done a very extensive tracking program with electronic waste. It turns out they found a lot of U.S. electronics recyclers were actually exporting into some pretty bad situations in Asia, which they claimed they weren’t doing. And so that was inspiring to us. We looked at a number of devices. They actually worked with M.I.T. to build their own platform, but we found a private provider out of the San Francisco Bay area called Tracking The World.

It’s just a small company that has developed a GPS tracking device – if you remember what a pager looked like, it looks like that. It’s a small black plastic box that’s about two inches, by three inches, by an inch. Inside it has a SIM card and GPS tracking technology. We worked with them to make sure it would only ping, or send out a signal, when it moved, and/or once a day.

CD: That’s important. It sends a signal only when it moves and/or once a day.

EM: Oh ok, so you can stay tuned to what’s going on.

MB: And that way you could really conserve the battery, because we knew we needed at least a couple of months of battery for it to get through the ports and end up at its final destination.

CD: Yes, I asked how much they cost.

MB: They run about 250 bucks with a three-month plan, and we thought, let’s just try out a few of these. We got some individual donations from our members to support the work-

EM: Wait $250 with a three month plan?

CD: Yeah for the communications, like a SIM card. That’s pretty affordable no?

EM: Yeah! I was expecting a bigger investment.

CD: The thing is you probably need a few of them because it takes some trial and error.

20:45

MB: We tried a few different approaches. We discovered that getting them through the processing facility basically destroyed them. So we had to attach them to the bales after they’d been processed and baled – we couldn’t threw them in through the processing bin and expect it to end up a bale and still be alive.

CD: Those good learning lessons for our listeners who I am sure are going to try this at home.

EM: Disclaimer message?

CD: Please try this at home.

EM: Or at your recycling facility!

CD: Here is how exactly:

EM: All you need is a plastic bail.

MB: The bales are pretty dense, so the plastics are crushed really tightly and then they’ve got baling around them. These are big blocks of compressed plastic. They’re about four or five feet long, by three feet wide and four feet high, something like that. So we had to actually wedge them into the side of the bale. I thought initially we might need some kind of adhesive to hold them in there, but just the pressure of the bale, if you can get it wedged in there, they’re not coming out.

We also wanted them near the surface of the bale so that they could get a better GPS or cellular signal. Some of the limitations with the technology is that to get a satellite GPS location which is really accurate, the device needs to see the sky.

CD: It’s a bit like your children, they need to see the sky sometimes.

EM: Yes it’s a bit like children, if they don’t see the sky they start to triangulate.

MB: They can’t be under a roof, or inside one of the shipping containers. So they’re not very accurate unless they’re seeing the sky directly. And if they don’t see the sky and can’t see the satellite, then they start trying to figure out where they are by triangulating off of cellular towers. So if there are cellular towers nearby and they get a cell signal, they get a pretty close reading in terms of their location, but they could be as much as a couple of hundred yards off when triangulating off of cell towers. And if the cell towers are further away, it gets less and less accurate. But, once they’re in the sea container, they lose the satellite and so then we’re locating off of cell towers, and it gets a little less accurate.

EM: I feel like in a spy movie.

CD: Yes that’s exactly what I told him…

MB: Yeah, it felt pretty stealthy, like, okay we’re actually going to see where these things go. And more than feeling like a spy, there was a real curiosity to where is this actually going to end up in the world. Because we just see it for that minute between the recycling bin and when we send it to the brokerage firm. And then it’s off to the port of Oakland and we don’t see it anymore. So, to be able to see a longer life of where this stuff actually goes was pretty exciting. I know it sounds a little nerdy, but…

23:50

CD: How exciting is your morning coffee now right? you have this tracking device somewhere in the world, opening the computer to see where it is.

EM: I want one!

MB: At first I didn’t want to share it too widely. So it was just me and a couple of people. We had a link from the provider that took us to a map, like a Google-style map on the desktop. And I could see it sitting there in our recycling yard, and it would ping once a day and get a little signal. I could download a table and it would show me the GPS locations and the times that it located. And for about a week I’m just sitting there watching it sit in our yard, and then when the shipment was going out and suddenly it starts pinging in a storage yard near the Port of Oakland, getting ready to get on a ship. It’s sitting there for a good week or two weeks, and I’m checking it every day – when I have a little break I take a look and see.

And then, one day it’s just gone. And I’m like, okay that either means that it’s broken and it’s no longer working – and we had a number of them that failed for a number of different reasons. So maybe it just stopped working, maybe the battery went dead, maybe it got moved around and crushed – or it’s on a sea container on a ship, out in the middle of the pacific. I just didn’t know, so I keep checking everyday, and nothing new, nothing new, nothing new.

Frankly, we didn’t know where it was going. We suspected it would be going back through Hong Kong and into China, but it could have gone to India for all we knew, you know? We had no idea. And, frankly, we didn’t know how long it took a ship to get across the pacific ocean, or if it made multiple stops, or if it would stop in, who knows, Honolulu and get put on a different ship. We just didn’t have any idea.

CD: So at this point, Martin doesn’t know if the tracker is dead, broken, without battery. Or somewhere out in the ocean where the satellite or cell towers cannot get the signal….

EM: …And…but?

CD: but suddenly

MB:

CD: But suddenly I think it’s time to close this episode.

EM: Noooooo!

CD: We’ll find out soon, Eleen.

EM: This is mean!

CD: This is fun! And remember we said we would try to keep our episodes short.

EM: Okay, okay….

CD: If you have any questions, if you need tips for your own GPS tracking experiment, please don’t hesitate to get in touch,

EM: hello@greenexchange.earth

CD: We’ll be back very soon with more green knowledge, inspiration & GPS tracking. Keep up the good work in the meantime.

One main reason cleaning up the ocean is not going to work: so many of us underestimate the wrath of the sea. The many technical challenges are so much bigger than we realise, and while we all desperately wish the magic-bullet solutions will work…the cold hard facts tell a different story.

That’s what oceanographer Kim Martini tells us in this episode. She’s one of the only people to do a scientific peer review of the Ocean Cleanup Project’s feasibility study. The results are very interesting. The main questions we ask her: what exactly are the challenges we’re facing? And is there any hope for cleaning up the ocean, or will we have to live with this plastic soup forever?

Check out the Oceans series page for complementary resources & bonus materials.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

Picture credit: Plastic Oceans Foundation

EPISODE TRANSCRIPT

Camille Duran [CD]: Eleen are you ready I am launching the mythbusting machine.

Eleen Murphy [EM]: Sure, go for it!

CD: It may get loud.

EM: Okay.

[Voicemail]: Hello my name is Aimee and I would like to know

Can we really cleanup the ocean?

CD: Hi everyone! Today we are going to answer one important question: can we really cleanup the ocean? Is this really possible? Or how much of it can we clean?

EM: Yes! Well done on the song adaptation by the way! I didn’t know you’re able to sing.

CD: Really? Can’t you hear how much I fake it? Studio tricks baby that’s all!

EM: Well,it works!

CD: Good!

EM: Camille has been squeezing researcher Kim Martini – or her knowledge, I should say.

CD: Haha.

EM: We introduced her in the last episode.

CD: I have been challenging her, like everyone who comes on the show.

EM: You’re the man for that alright!

CD: We fight hard to bring you the truth, beloved listeners.

EM: How’s about we jump right in?

CD: Let’s do it.

CD: Can we really cleanup the ocean? We said it’s more of a good-to-know question, really. For those who are just joining us: we believe the real answers to the ocean plastic problem are upstream but yes, we should also consider the feasibility of cleaning up what we can so here we are.

EM: You have a disclaimer message?

CD: I do. The following views can sound a little bit critical. I want to say that we praise the existing efforts of everyone involved in someway in environmental actions. It is important to mobilise engineers, innovators, entrepreneurs and anyone who is interested in giving a hand to find solutions and cleanup what we can of ocean plastic.

EM: Those efforts are very important, keep it going.

CD: What we are challenging with this myth busting episode is the fact that ocean cleanup has been occupying a large majority of the mainstream media space – mainly via the work of Boyan Slat and the Ocean Cleanup Project. This is sometimes steering the debate in the wrong direction, even in most specialised circles.

Together we are going to find out what is possible today – and what we can expect for the years to come.

Spoiler alert! You are probably going to get disappointed.

EM: But! that’ll be productive for the investigation as a whole.

CD: Actually, I’ll go ahead and save your time right now, because you’re busy: if you just want to know if we can cleanup the ocean, the answer is much closer to the no than to the yes – you guessed it. And things are not likely to change anytime soon. Why? because it’s not only a technology issue.

EM: What a spoiler you are Camille.

CD: It’s more productive, that’s all.

EM: Now, if you want to understand the nuances and dig into this with us… stick around!

CD: If by now you know enough, just move on, we won’t get offended, I promise.

EM: So, why did you pick Kim Martini. Who is she? Why should we trust her?

CD: Ok, good question. First because she is an oceanographer.  

Kim Martini [KM]: How do I introduce myself? Well, first: hi my name is Dr. Kim Martini. I’m an oceanographer, which means I study the physics of the ocean, and to do that I’ve spent a lot of time deploying instruments in the ocean. Right now I work with how to get the best data from these instruments. But on my side-time, I like to tell people about the ocean, so I do a lot of outreach through blogging or Twitter.

CD: She blogs at Deep Sea News which is a nice channel if you want to follow ocean topics.

KM: I would say that we’re not your normal ocean bloggers, because we like to use popular culture and humour, and cold hard scientific facts to tell people what’s going on in the ocean.

04:01

CD: Cold hard scientific facts, humor and pop culture, written by scientists. That sounds like a blog you’d want to read right?

EM: And people I’d like to hang with.

CD: Worth mentioning: she really wants to find cleanup solutions. And that’s an important qualifier for this interview. She wants a clean ocean tomorrow. Like you and me.

KM: I wish. I want to in my heart. I’m on the page with them – I want to see a solution. I want to see something that works. I’m horrified! When I go to the beach, when I go out and there’s stuff everywhere.

EM: Fair enough. She’s not the naysayer we sometimes see in those debates.

CD: No, she hates the idea of being part of that myth busting, but she felt it’s her duty to tell the truth.

EM: And she studied the Ocean Cleanup Project specifically right?

CD: Yes, in great detail. Because when the Ocean Cleanup Project went viral and Boyan Slat finally released a comprehensive feasibility study back in 2014 – hundreds of pages of technical stuff no YouTube viewer would understand – she was asked with her colleague to do a scientific peer review of the study, common practice in the scientific community. But no one else was up for it. So she took care of the engineering part, and her colleague Dr. Miriam Goldstein took care of the biology part.

EM: Okay.

CD: And you know, before we jump into the technicalities, I want to look at this from a change management perspective because there is something that comes back all the time:

We, human beings, have a big talent for oversimplification. When I look at a question – such as can we clean up the ocean – I want to hear yes or no. I don’t have the time nor the interest to understand the nuances. I just love the story of this young champion that seems to have a plan and that’s what I feel like standing behind.

And this is a classic case with change management stories. Now the reality is ,more complicated than this and we need people to do the homework and look into the details of this (that’s number one). And number two: we need to start getting used to nuances, conditions, variables – and looking at the big picture.

EM: People like Kim help us understand the nuances.

CD: Exactly.

EM: So thank you all, people like Kim.

CLEANING THE OCEAN: ENGINEERING & LOGISTICAL CHALLENGES

06:42

EM: So what did you cover first

CD: We started talking about the disproportionate visibility of the Ocean Cleanup Project because it’s probably the most prominent solution to date. It now received millions of dollars of funding and I wanted to ask Kim what we can hope from it.

EM: Yes actually our colleague Sorenza found out that if you go on YouTube and go through the first twenty videos for the search “ocean pollution”, 50% of the views go to the Ocean Cleanup Project.

CD: I am not surprised, the way people responded to Boyan’s narrative is a great illustration of this oversimplification syndrome media audiences are victim of. Here is how Kim puts it:

KM: It’s so compelling because it’s such a simple narrative. “I will use the ocean to clean itself”. It’s a problem because now he’s framing it as: all we have to do is throw a lot of money at the problem, and it’ll solve itself. You don’t have to do anything to change, you’re not personally responsible. It’s so easy. He just frames it as this very easy problem that is solvable with engineering, and I would disagree with that.

CD: General rule of thumb for you busy people with no time to check the feasibility of a solution: when it’s too good to be true…you probably want to keep reservations.

EM: Or call the myth busters!

CD: Right.

EM: Can we get into the engineering challenges now?

CD: Sure, that’s Kim’s expertise. Do we have the technology? And will we have it in ten years, fifteen years, etc? I always thought, there must be something usable in the work of the Ocean Cleanup Project, behind all the glitter, there might be stuff we can actually apply today or short-term.

CD [to Kim]: Can you note any substantial progress in the previous years? What is the pace of innovation, and is this going to get somewhere?

KM: I think they’re doing a good effort of trying to address the engineering challenges. I think they’re finally trying to address the bio-fouling challenges. So it seems like they’re moving in the right direction. Those were the two major challenges that we outlined in our review which we wrote four years ago. But I would also say that in our review as well, one of the main points we said is that making deep ocean moorings is really hard.

CD: I pause here for a second. If like me you were wondering what is a deep ocean mooring – it’s like a collection of devices, connected to a wire and anchored on the seafloor. Deep. Really deep in the ocean.

KM: Just to even engineer the structure; so they were going to make the world’s largest ocean structure, to pick up trash. And we said that that’s really hard. That’s a hard technical challenge. We’ve never done that from an engineering standpoint as humans, we’ve never made something that large.

And it was really interesting because we said that moorings are hard four years ago – and it was just this past spring when the Ocean Cleanup Project had a press release that said “Oh yeah, moorings are really hard! We’re going to do this other floating idea”. And I thought, well we already said that four years ago. So it’s like, okay, they are moving forward, but how far forward have they moved on if we said that four years ago?

And I’d also like to point out that having freely floating structures that are freely drafting is another huge technological challenge that has its own incredibly complicated problems.

CD [to Kim]: It looks easy on the slide-show.

KM: Oh, it does look very easy on the slide-show! But it’s not. And I think they really over-simplified the engineering that’s going to be involved in that. They simplify everything. And I mean, that’s what you have to do – if you want to tell somebody about what you’re trying to do and it’s highly technical, you do have to simplify it. You have to make it easy to understand, but you also have to be realistic about the challenges and I don’t think they’re doing this. Because it looks like they have a lot of really technical people, but the ocean is a really mean place. It is really hard on your instruments, it is really hard on anything you put in there. And I think sometimes they really underestimate the wrath of the sea.

11:20

CD: So Eleen, here is the first punchline: there are real engineering challenges that tend to be greatly underestimated, and it sounds like we are really far from a solution someone like Kim can really believe in.

EM: How about solutions other than the Ocean Cleanup Project one?

CD: Good question. I asked her what’s the potential of any solution out there?

KM: Oh boy. So it’s a really hard problem…

EM: I like how she calls you boy when she says, “Oh boy”.

CD: Oh yeah? here it is one more time.

KM: Oh boy. So it’s a really hard problem, okay? There’s a lot of plastic, it’s all over the place and at different levels, but it’s also really scattered. So how are you going to do something that’s efficient enough to pick up a lot of plastic, but also pick up a lot of useable plastic and not pick up everything else too. So that’s something people have to think about. You’re scooping up stuff that’s been in the ocean, but you’re not just picking up plastic. If we use a fishing term – there’s by-catch.

CD: That is the problem all technical solutions are confronted with. By-catch.

EM: Yes because it seems plastic is really everywhere, in the arctic, in the deep oceans, at the surface, everywhere really.

CD: So punchline number two: you can’t really pick up plastic without picking up all the other stuff as well, it’s a real fish & plastic soup out there.

EM: Mmmh. But wait, I can go with the idea that we can’t pick up everything, but at least all the big pieces that lie in the patches? That stuff Charles Moore is standing on in his famous videos?

CD: That is exactly what I asked. That stuff should be easy to remove.

KM: I’m not sure that we can. In my limited view – so I wouldn’t say I have a hand on every single type of technology that’s out there –  but I really don’t see a good feasible way of going out and picking that stuff up that’s going to work. There’s just so much trash in the ocean!

CD: Something we forget is that the Great Pacific Garbage patch for instance is about the size of Texas.

EM: Actually I’m looking at estimates here and you’re talking about the low range estimate, some estimate fifteen million square kilometers – and that’s around 8% of the ocean surface.

CD: You get the idea. Still I didn’t want to take no for an answer I asked her about the different systems out there, there might me something promising…

We reviewed together the main ideas that have been put forward.

TRASH WHEELS & LOCAL CONTEXTS – SOLUTIONS THAT MIGHT ACTUALLY WORK

13:56

KM: For me the ones that I think are the most successful so far are, like, the Baltimore Trash Wheel.

CD: So the Baltimore Trash Wheel is a system that is placed at a river catchment, powered by the river current or solar power, has a big wheel like on the old boats or mills, and it actions a rail that brings up the trash that is floating around, dropping it into a container. They picked over half a million tonnes of trash over the last three years – including nine million cigarette buts, and half a million polystyrene containers.

EM: Nice

KM: And it does a really good job!

CD: But …

EM: Oh no there is a but?

KM: But, again, this is a really great solution but it’s only limited to places where you have river inputs, and places where you can actually put it. You’re not going to be able to this in the middle of a shipping channel. So, how are you going to block off the flow? Are you going to do it in a small area? So that one’s limited as well.

CD: It’s limited. But it’s great, that’s where efforts should go towards, developing a multiplicity of local solutions that work for a specific context.

EM: I see. And that’s often on preventing more plastic from getting in the ocean in the first place.

CD: That links to our next punchline: there is no silver bullet. Like with everything, there are so many different situations that the engineering challenges are humongous. You can develop a solution that is tailored to a specific situation like they did in Baltimore but the claim that we can clean up the ocean is just too big.

EM: That makes sense.

CD: In case you are still not convinced, there is another argument that she brought up: collateral damage. By-catch is one of them, as we discussed. But also:
KM: …and because you’re using a net you’re going to catch other fish, or harming things. So there’s always that possibility. I do think that’s a good way to do it, but if you’re going to do that on a large scale, that has it’s challenges too. And also you’re going to use a lot of gas chugging around in two boats, and so you have this other collateral damage, right? So you really have to think of what the cost-to-benefit ratio of all this is.

EM: Yeah, I hadn’t thought about that, all the pollution from such large scale operations. We just have no idea of the size of the problem.

CD: And the financial cost! The capital expenditures from all this. That’s an important point. First – is there any money for this? And if yes…who is going to pay for this? The plastic producers? They don’t even want to hear there is a problem at all.

The business model is very unclear, because a very large majority of this plastic – even if we could collect it – has no value what so ever, which is why it ended up here in the first place. And now it’s degraded and there is a mussel on it. Nothing you can do with that. So that’s another nail in the coffin for the cleanup narrative.

PREVENTING THE PLASTIC LEAK: UPSTREAM SOLUTIONS AND CELEBRATING SMALL VICTORIES

17:07

CD: If there are millions and millions of dollars available right now to solve the ocean plastic problem, it should go into preventing the leak.

EM: Yeah, making sure nothing else ever gets in the ocean starting now.
CD: Because right now we are talking about Millions of tonnes every year.

EM: At least eight million tonnes a year actually, that we will probably never be able to catch back.

CD: That’s a good way to put it. And here is the big idea, the more upstream we put our efforts, the more impact, and the cheaper it is to solve in the end.

EM: Upstream. And that’s what we are going to cover in the rest of the series.

CD: But you know I don’t like to give up, I hate to feel we can’t do anything.

EM: I feel you.

CD: I thought that I would ask Kim a different question then. Instead of “can we clean up the ocean”, I asked her how much she believes in a workable solution for reversing the trend – technically reversing the trend. I asked her to score from one to ten – ten being the strongest chances. You know what she told me?

EM: Oh boy?

CD: Exactly:

KM: Oh boy. I’m going to put on my cranky pants for this one. I don’t see a lot of this. I see that we can make a lot of change on how much is going in, so I would say a four. But I would say that what has gone in and what is going in there is so high…and even the future estimates that this might be doubling in ten years are so high that I don’t see how we’re going to get rid of this problem – unless we’re cutting it off from getting into the ocean. Especially since we can’t even get any of it out yet.

EM: Okay, okay. Can we end on a positive note please?

CD: Yeah, let’s try. You are making me think of another point she made, just looking about the efforts to date.

KM: To be fair, these are all projects that have taken a lot of prototyping. They’ve taken a lot of work and iteration, and that’s where we’re at. We’re at the small-scale stuff. We do need bigger scale stuff, but we have to work up from these small victories too. And so I think the Ocean Cleanup Project should think about these type of models in the prototyping they’ve done, because the reality is that the Ocean Cleanup are five years in, and they’ve not removed one piece of trash from the ocean yet. They are twenty million dollars in. The Baltimore Trash Wheel has removed tonnes and tonnes of garbage and they’re only eight hundred thousand dollars in, so a fraction of the cost. And so, that’s a solution that’s working at removing plastic from the ocean. The Ocean Cleanup Project? They’re not yet.

EM: Working from the small victories.

CD: Local specific solutions…

EM: …to prevent plastic from leaking into the ocean in the first place. I see.

CD: You got it!

20:22

CD: Conclusion:

EM: Can we clean up the ocean? Not really. What’s already there is there and it’s going to be a sad reminder of how pathetic we are.

CD: Boyan Slat cannot save us. Although he is a remarkable entrepreneur with a lot of talent, which we hope he starts deploying towards preventing the eight million tonnes a year that reach the ocean in the first place.

EM: Basically, if you want to go to a beach cleanup on a weekend, or develop a local solution for your city, a student project, that kinda thing – you should. You really should. It’s important.

CD: But technological solutions should really focus on preventing plastic pollution not cleaning it.

EM: For the rest, all the money, media attention and human efforts are better off focusing on upstream solutions.

CD: The people who can really save us work in industry, product and service design, and last but not least policy makers can save us. They need to create the environment for the world to take another direction…but that’s for another day…

EM: Myth number one busted!

CD: We’ll be back soon with more green knowledge, inspiration and entertainment-

EM: And less plastic pollution!

CD: Keep up the good work in the meantime.

Check out the Oceans series page for complementary resources & bonus materials.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

Picture source: The Telegraph

EPISODE TRANSCRIPT

Camille Duran [CD]: Ok Eleen are you ready?

Eleen Murphy [EM]: I am!

CD: This is real now, we said we would start this ocean series with a theme many human beings are talking about right now.

EM: Yes.

CD: It’s something we humans are ingesting on a daily basis, without even knowing it.

EM: humans & animals actually

CD: Right. Not only do we touch it and eat it, we also put it on our body all the time, it’s in our clothes, in our cosmetics…

EM: It’s everywhere in our lives

CD: And it’s also everywhere in the ocean.

EM: Plastic

CD: Plastic. Ocean plastic, Eleen. We promised we would tell crazy stories, we would investigate, infiltrate, hide microphones sometimes even – all this with the mission to bring clarity. Clarity on what needs to happen right now to solve this planetary emergency.  And Here we are, chapter one.

EM: Chapter one, baby!

CD: You know, I feel we should have picked a subject a little bit easier to deal with to be frank.

EM: Hm?

CD: A subject like.. Ocean Plankton for instance.

EM: Right….Not sure it would get the same interest…

CD: Hi everyone and welcome to episode thirty-three of our series on Ocean Plankton. I am your host Jimmy Shrimp-

EM: Okay okay, let’s get started now, we have a lot on our plate.

CD: Right, Sorry. Yes, so some of you have asked how many episodes we are going to dedicate to ocean plastic and actually we’re not sure. We do not know. It could easily go up to 10 or 15 episodes. Who knows how far the wind of change will take us.

EM: Yes, because we have a lot of stories already!

CD: Like the story of how plastic in the sand makes baby turtles turn from female to male.

EM: What? really? haven’t heard that one.

CD: Yes true story, or the story of the hidden GPS tracking device following a plastic container across continents all the way to… A place you will uncover.

EM: Nooo

CD: Or the dark side of something we cannot talk about yet otherwise they are going to cancel our upcoming meetings.

EM: Okay, okay, the point is: you’d better push that subscribe button.

CD: Yes, open your favourite podcast app, search ‘Green Exchange’, subscribe and share with your friends and colleagues.

EM: It’s not even physically hard.

CD: It only takes one finger.

EM: Or…two at the most…

PLASTIC SOUP: HOW MUCH POLLUTION IS LEAKING INTO THE OCEAN?

02:44

CD: Now, time to get our hands dirty

EM: I guess we can just put them into the ocean then?

CD: Yeah…the problem is, I am in Brussels.

EM: Ah, that’s right, how is it going by the way?

CD: We’ll talk about it. In due time…again.

EM: You don’t want to share anything.

CD: I don’t want to get anyone lost, that’s all. As you know, we are going to unpack the European debate later on in the series, in relation to the upcoming Plastic Strategy to be put forward by the EU institutions. All I can tell you is that the European Commission staff is being bombarded with meeting requests, invitations, papers etc. mainly from industry who is trying to defend its interests I suppose.

EM: Right.

CD: So it’s hot at the moment.

EM: I can only imagine, can’t wait to unpack all this!

CD: Let’s go then!

EM: Where should we start?

CD: I thought we should start from the visible part of the problem.

EM: Millions and millions of tons of plastic are dumped into the ocean every year.

CD: Good place to start. Because this is what we see in the first place. That’s the story we are all usually starting from. The albatros with plastic caps in the stomach, the big plastic gyres in the ocean.

EM: At this point I think everyone has seen images or videos of what’s going on.  

CD: Yes, and in case you need more material on this we prepared a few links for you in the episode notes. But let me ask you this: what is the first thought that comes to mind when you see all that trash in the ocean?

EM: That we should clean this up.

CD: Right, logical reaction. Cleaning up. But here is the thing: we said we would not talk about cleanup remember?

EM: Yes.

[Audio segment from Episode #1]

EM: That’s still the plan right? Focusing on closing the tap?

CD: It is, but I realised one thing over the last few  weeks. There are a lot of people who think we actually can cleanup the ocean.

EM: That’s true.

CD: Including policy makers and industry professionals, there is a lot of confusion on this. And most importantly, it’s taking too much attention away from the most productive areas of action.

EM: Like working upstream, on where all this plastic waste is coming from.

CD: Exactly, so then I thought, if we want to be comprehensive in our approach and truly advance the discussion, we should cover this issue once and for all. Can we cleanup the ocean?

EM: I don’t really know actually, technically I mean… how much can we clean…? So we should spend a bit of time on this today?

CD: I think so.

EM: Then we can focus on closing the tap without any regret.

CD: Yeah, let’s do this. And you know what? I scanned through 7.5 Billion people living on Planet Earth and I found THE person we need for a solid answer to this cleanup question. Someone who studied hard this very topic. She’s called Kim Martini and we’ll talk to her later on.

Kim Martini [KM]: And members of the Journal of Science community said “Look, can you do an independent review of this, because we really want to know whether this is real, because this is promising a lot”.

06:38

EM: I can’t wait, and what do we start with ?

CD: I was thinking of taking you up on a balloon. High up in the sky – figuratively. Just so we can take a bit of perspective before we put our head back in the water.

EM: Oh man, I’ve always wanted to take a ride on one of them! And yes, may be worth doing some contextualising.

CD: Let’s go, you want to pull that rope thing?

EM: Sure!

[Air balloon launches].

CD: Wow, my hair!

EM: Woah!

CD: I haven’t asked you if you’re afraid of heights.

EM: Well it’s too late now!

CD: I guess we’re trying to understand where this plastic problem stands among all the challenges we have to solve on this poor Planet.

EM: It’s a good idea, sometimes I don’t think we realise how big the issue is, or its implications. When did we start talking about ocean plastic by the way? Obviously it has become a hot topic now, but how long have we known this for?

CD: Well, it’s been about 20 years i would say. Actually, it’s been exactly 20 years that Captain Charles Moore has found the Great Pacific Garbage patch.

EM: Charles Moore! I love that guy.

CD: Yes, for those of you who don’t know him, Charles Moore is an oceanographer and racing boat captain. Since his first publications in 1997, he has become an icon of the movement, drew tons of media attention to the issue of ocean plastic, millions and millions of views on YouTube. He also conducted years of research, drove campaigns and more.  Of course, many other people have also been active on the issue since then but, yeah, he has been a prominent voice on the subject matter.

EM: So we have around twenty years of awareness. It feels like a lot.

CD: Yes, and in twenty years, Charles Moore has not gotten more optimistic. I talked to him last week actually

EM: You talked to Charles Moore?

CD: Yes, I thought it would be good to exchange a few thoughts.

EM: And?

CD: Hah, he is a real Captain.

EM: What do you mean?

CD: Well, tone of voice of a captain, he behaves like a captain, he uses captain words…

EM: Haha, really?

CD: Yeah. Like, I asked him what’s the weather like in California today… just to small talk for a second… and here is what he replied.

09:17

CM: It is tropical, but Southern California weather for summer, with a little bit of tropical moisture, but warm. The clouds are clearing, they’re mostly inland, and people got some rain. But yeah…basically clear and sunny.

EM: That is a real Captain answer!

CD: Yes, no doubt I was talking to Charles Moore.

EM: Good.

PLASTIC POLLUTION: STOP TALKING ABOUT CLEAN UP

CD: So I started by telling him about what we were planning for our investigation, and he cut me right away and said:

CM: Are you going to look at the causes for all that in a more deep manner? I mean, I’m getting tired of the beach cleanup, plastic bag ban mentality. We’ve got to attack the cause of the entire peking rationale of the current system. It’s losing its rational.

CD: I was not expecting this comment from him,  and so we got into a big picture discussion, basically.

CM: The human condition is not improving anymore under competitive economic scenarios. The alternative energy sector has developed faster than the petroleum industry expected, which means they’re going to be focusing on other uses of petroleum other than fuel. And it’s becoming plastic as that alternative. And that alternative means that the junk we create – that lasts for seconds, gets discarded and has no afterlife or take-back infrastructure – is going to be the salvation of capitalism.

EM: Wow…

CD: Yes, this can come out as strong words, but we’ll talk more about it and you will connect the dots. For now, the only point I want to make here is that once you start looking into plastic, you arrive very quickly at systemic discussions that touch on economic models of our societies, world trade, biology, health, human rights etc.

EM: I see.

CD: And those bigger picture challenges are very difficult to ignore.

EM: I think I see where you’re going with this: we easily fall into band aid solutions because we don’t want to address the bigger picture.

CD: Exactly. You know the drill. And that’s why everyone like to talk about cleaning up the ocean for instance. Because this way we don’t have to change anything, we can just hope for cleanup technology & people to fix it.

EM: Right.

CD: Anyway, back to Charles Moore, we talked for a few minutes about this and then got into other questions. Like, I also wanted to get a sense for how fast the amount of ocean plastic is increasing – since he has been following this from the beginning.

12:23

CM: We have a fifteen year timeline in the northern hemisphere, and in the stations we monitor in the North Pacific garbage patch, we’ve seen a sixty-fold increase in fifteen years. We’re just getting ready to publish this. But that’s by count. And it’s in the several hundreds by weight. It’s exponentially increasing in the North Pacific. Like I said, it looks like a polluted harbour, a dirty beach, out in the middle of the ocean for hundreds of kilometres.

EM: Sixty times more than fifteen years ago?

CD: Yes, by count. And in the hundreds by weight.

EM: Wow so it’s a biggie.

CD: Yes. That’s not a small issue.

PLASTIC POLLUTION: AS IMPORTANT AS CLIMATE CHANGE?

CM: There’s tremendous parity there between what’s happening with the planetary disruption by climate change, and the disruption of the marine environment by plastic. The marine environment is much larger than the land environment, it has much more habitat, and that habitat is completely being very insidiously penetrated by these synthetic polymers of every shape, size, colour and type. And it’s mimicking natural food and it’s acting like a predator – so it’s both predator and prey. As predator it tangles and it kills by making it impossible for creatures to move – it strangles them.

And as prey it kills by being consumed, absorbing all these pollutants and blocking digestive tracts – it’s basically putting the ocean on a plastic diet. It’s killing the albatross with plastic bottle caps, who are feeding them to their chicks, and the chicks die with plastic bottle caps in their stomachs. For that reason, I think we have to have this plastic conversation.

15:29

CD: And as you, we are going to reach a point where there will be more plastic than fish in the ocean. Industry is telling us we should expect production to increase threefold by 2050. So it’s not only what’s out there already but it’s also looking at the trends.

EM: So do you think that although ocean plastic is getting a lot of coverage at the moment… it’s not enough?

CD: I would say It’s probably not getting the amount of constructive discussions it deserves.

CM: It needs to be ranked as a planetary emergency along with chemical pollution, climate change, and nuclear proliferation.

CD: I don’t think this is overstated, actually.

EM: No probably not.

CD: So, on the framing part, that’s the first point I wanted us to make today. Ocean Plastic is not a small issue that is killing a couple of turtles and birds.

EM: It’s a planetary emergency.

CD: Yes. The theme is definitely getting more and more traction, a lot of us are talking about it, producing media, films, etc. But still, it’s far from being enough. Industry and public authorities really need to put their sh*t together, and quick.

[Landing the balloon sound]

CD: Alright we’re going to land now!

EM: Do you actually know what you’re doing?

CD: I am usually better at take offs than landings…

EM: Ohhhh god.

CD: Alright so, hang on…. There you go, nice and soft.

EM: Nice one, you may have a career as a balloon pilot!

CD: Right, I’m actually thinking about it.

EM: So, where to start? Shouldn’t we start by cleaning the ocean?

CD: [strong French accent]: You’re pulling my leg???

EM: [Laughs]. Yes I am!

CD: Okay, let’s demonstrate once and for all that ocean cleanup is the wrong battle to fight. Period.

EM: Alright, convince me. Hey, I feel like a Myth Buster!

CD: A myth buster…Oh, you give me an idea. One second! That’s right…just wait one second…

[Ghostbusters theme plays].

EM: Oh no…what have I started? I’ve created a monster.

17:59

CD: Okay, here is what we’re going to do. Thanks for the idea! I see it now

Through this investigation, Eleen, we are going to dismantle a lot of harmful narratives. Okay? That’s the plan. Like the plastic eating bug story, or oh, plastic helps us fight climate change or … we can cleanup the ocean. All those are myths we are going to bust.

EM: Yeah…?

CD: We are myth busters.

EM: Yeaaah?

CD: Well here it is:

[Ghostbusters music plays]

CD: That’s the new jingle for our myth busting episodes. Come on let’s practice a couple of times.

EM: Camille, people are going to hate us.

CD: Everyone loves this song!

[Eleen and Camille sing the song].

EM: Okay, let’s get this over with. Onto the myth busting now!

CD: No, no, no, we are going to close that episode and start a new one called: myth busting: We can cleanup the ocean or something like that.

EM: Alright, a new episode then…

Good luck and happy hunting!

Check out the Oceans series page for complementary resources & bonus materials.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Camille Duran

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Camille Duran [CD]: Eleen do you know why mussels never donate money?

Eleen Murphy [EM]: Uh… no

CD: Because they are shellfish.

EM: Wow, ok let’s get started!

CD: Yes, today we are starting a big investigation. Before we introduce this new series, should we run an equipment check, very quick?

EM: Sure.

CD: Pen and paper?

EM: Check!

CD: Telephone with battery?

EM: Check!

CD: Fiber-optic internet?

EM: Check!

CD: Snacks?

EM: A lot of them, check.

CD: Fast computers and software?

EM: Check!

CD: A time machine?

EM: Check!

CD: Problems to solve?

EM: Check!

CD: All access to international experts, celebrities and leading voices?

EM: Check!

CD: Listeners and partners with questions?

EM: Check, I think!

CD: A critical mind with an appetite for strong sustainability solutions?

EM: Check!

CD: Microphones?

EM: Check!

CD: Alright, it sounds like we are ready to start a new series! Eleen, would you do the honours and tell us what this investigation is about?

EM: We re going to talk about…

CD: No need to drag it out, they have read it in the title of the episode

EM: Oceans!

CD: Wow, what a surprise. So before we push the button, I thought you could tell us why oceans matter?

EM: Well what matters most is that there are a lot of dirty secrets out there around oceans. There’s a lot of stories we never hear about. But I think we should.

CD: Have we been misled? Again?!

EM: You’ll find out soon. But to answer your first question, I think oceans matter because:

We live on a Planet called the Blue Planet, covered by around 70% water. Each year, oceans produces almost the same amount of biomass as terrestrial habitats – around fifty0 billion tonnes.

CD: What?

EM: We just don’t see it!

EM: If you take the ocean-based industries… and look at their contribution to economic output and employment each year… it’s a big number. There are different sources but we’re talking about around two and a half trillion dollars per year – that’s like the economic output of a big country, like Brazil or the UK.

CD: Wow!

EM: Back in 2010 these industries were already contributing to thirty million jobs and the OECD tells us it could grow another 30% by 2030!

CD: That’s a lot of jobs!

EM: And of course, there are big, big challenges ahead of us that are far from being solved: ocean pollution, overfishing, permanent crime like human or drug trafficking, all the economic issues around the ocean, energy production, resource management in general…the list goes on and on.

CD: Wow, I think we all agree that ocean is a theme that deserves its own series at Green Exchange. If after that you still think oceans are not that important, please write us an email.

EM: We’ll reconsider.

CD: Eleen it is safe to say that this is our most ambitious investigation to date, we will have very special guest, tell you all the stories, even the ones we are not supposed to, we will podcast from underwater, hop aboard big boats…

EM: And small ones.

CD: Live podcast from big events, etc…

EM: And small ones.

CD: And go after big fish…

EM: …and small ones!

EM: Now that we know about the theme why don’t you tell us who this series is for Camille?

CD: Good question, I think a lot of us could benefit from this investigation. First, anyone who is keen on spending a good time, hearing crazy stories, and learning something along the way. You will be able to explain to your friends and colleagues what’s going on with our oceans.

EM: Without getting them bored.

CD: …Or you can also keep all the knowledge for yourself.

EM: That’s right!

CD: This series is for you if you want to clearly understand the root cause of the challenges we are facing on the blue side of our Planet. And what are the big investment and policy decisions we need to make as a society.

EM: Policy-makers?

CD: Yes, they should definitely follow our investigations. Many of them are lost in the deep blue. They have industry, NGOs and Facebook videos pulling them in all directions and they are the ones behind the big influential decisions.

EM: We’ll invite a few of them on the show maybe?

CD: All policy-makers are invited, let’s see who picks-up the phone…

EM: Who else?

CD: Journalists, media professionals. If you are getting started on this issue for an article or other piece of content, you are welcome to use this series as a source of ideas and cases. Or if you have stories or sources to contribute, send us an email at hello@greenexchange.earth.

EM: Journalists are an important part of the story here because those stories are so complex that it’s hard to get a quick overview.

CD: Then anyone with an interest in oceans really, whether on ocean pollution, overfishing, crime, money laundering via the ocean, economic & industrial issues… Welcome aboard!

EM: If I want to learn about animals, conservation, and the more traditional oceanography topics?

CD: Yes well then we will connect you to our favourite publications because that’s the part we won’t get into here.

EM: Alright.

CD: Eleen are you ready to get this party started?

EM: I am ready.

CD: Do you see the blue button in front of you? It’s time to press it.

EM: I’m excited!

CD: Let’s go!

CD: You know what’s one good thing about this topic? I am finally going to be able to use a voice effect that I created a while ago.

EM: Oh no…

CD: It will make us sounds like we are talking under water.

EM: No please…

CD: [Under water] What? Eleen? Can’t hear you if you are staying at the surface!

EM: Alright.

CD: [Under water] Hey here you are. See, now we can see what’s really going on here.

EM: Wow.

EM: Okay let’s keep the special effects for later. Can you detail what are we going to talk about in this series instead?

CD: Right. Good question. I am sorry to inform you we are not going to be able to solve all of the oceans problems with one podcast series.

EM: No?

CD: No, so we picked three topics to start with. Plastic Pollution, Crime and Nutrition.

EM: Plastic pollution, crime and nutrition. That’s already a lot to deal with.

CD: Yes, and I will tell you more in a minute. But before that I would like to clarify a couple of things about this series and our approach to investigations in general – for those who are not familiar with Green Exchange.

EM: Mmh

CD: Point one, we are producing this series as an umbrella investigation.

EM: An umbrella investigation?

CD: Yes, it means it encapsulates other investigations and stories. Basically we are doing some cleaning. Because tons of content have been produced already. Some of it is good, most of it is incomplete, and some media out there is actually harmful to the Planet and society in general.

EM: Green Exchange cleans the house!

CD: That’s right, our mission here is to help you articulate your thoughts in a constructive way. We ask bold questions, we challenge everything and everyone –

EM: – all the time.

CD: Point two, we are going to talk to experts, policy makers, activists, other journalists, intergovernmental organisations and citizens, maybe a few celebrities are going to join us as well.

EM: Celebrities? Exciting.

CD: Well we have you already…Eleen…

EM: Aw, right, can’t get out of the house right now because of all the paparazzi.

CD: Just wear sunglasses and a cap.

EM: I’ll think about it.

CD: We’ll try to stay pragmatic and practical.

EM: Some philosophy may be necessary as well though.

CD: Yes, philosophy Green Exchange style. If the result of your actions hurts anyone, violate human rights or damages the environment, there is probably a better way.

EM: Probably yes. Now, I want to talk more about our three topics – plastic pollution, crime and nutrition – because you haven’t said what we are going after for each one. And I have seen a few crazy stories going around the office.

CD: True. Really Crazy stories. But before that…

EM: Noooo!

CD: I would like to suggest a little audio interlude that is going to help us visualise how people from around the world interact with the ocean. What is your relationship with the ocean? view from the shore, from a fishing boat? scuba diving? Let’s get in the mood….

[Audio Interlude].

EM: wow that was cool. You can really hear how different people use the ocean in different ways.

EM: Now can we please get to the crazy stories.

CD: I never said I would tell them right now.

EM: Ehh, I think you did Camille…

CD: Nope, you told me you saw some crazy stories circulate in the office and I said yep but you were asking me about our three topics.

EM: Alright. Moving on

CD: Okay back to our three topics?

EM: Yeah sure.

CD: Topic number one: Plastic Pollution. Whoever you are, you probably heard a lot of different things about how to solve plastic pollution. There is what industry tells us, what policy makers tell us, what NGOs tell us, the people, one video goes viral and we feel we solved the case.

EM: Yes like for instance the video from the young Boyan Slat who apparently found the magic solution to clean-up the ocean from plastic.

CD: Yes we are not going to talk about so much about that because that is just distracting people from the real problem.

EM: What do you mean?

CD: Let me ask you this Eleen. You get home and your house is flooded because you left the tap open. Everything is a mess. Water everywhere. The tap is still open. Water keeps flowing. What is the first thing that you do?

EM: I close the tap.

CD: Right. So that’s the only thing we are going to talk about in this series. How can we close the tap? In other words, what are real solutions to stop plastic from leaking into the ocean. And how much plastic do we actually need?

EM: Industry is telling us they are planning on increasing plastic production three-fold by 2050.

CD: On the other side, NGOs and researchers tell us that by then we will have more plastic than fish in the ocean.

EM: So let’s close the tap!

CD: We will do some myth-busting so experts can tell us what we should believe in or not? We will talk about the role of celebrities, in an episode called “The Hall of Shame”.

EM: The Hall of Shame? Can you explain?

CD: Yes, we are going to go on YouTube, and research the commercials featuring celebrities that have been promoting excessive plastic consumption.

EM: George Clooney comes to mind.

CD: We will call those celebrities via their PR agents and ask them to tweet something nice for the planet to show how guilty they feel now that we know the impact of those products.

EM: Exciting. You think they will?

CD: If they don’t they enter the Hall of Shame. It’s their last chance, Eleen. It’s their last chance.

CD: So anyway, regarding the investigation at the policy and investment level, we will focus on what needs immediate action.

EM: Looking forward to it.

EM: Our second topic will be crime?

CD: Yes, the ocean is stage to a lot of nasty business: crime in the fishery sector, human trafficking, drug trafficking, piracy (as we talked about in our last Mixtape), it enables money laundering and fiscal evasion, illegal fishing, dumping of pollutants (other than plastic). A lot to talk about here.

EM: Yes, this theme has become high on the agenda for a number of intergovernmental organisations.

CD: Here you can already feel the craziness of the stories we’re about to investigate.

EM: I do! How about our third topic?

CD: Nutrition from the ocean. This one is pretty straightforward: What’s the role of the ocean in feeding a ten billion people planet?

EM: Wow , a lot to unpack there as well.

CD: On all of those topics we will also get on the road, we are going to attend a selection of events, conferences, workshops and podcast from there, host debates maybe, so there will be some field action as well.

EM: Great!

CD: Is that enough detail to make you want to dive in, Eleen?

EM: I think we are all super excited at this point.

CD: Alright. One last word:

EM: Subscribe.

CD: It’s free, all you need to do is press that one button on your favourite podcast app and you will get notified every time one episode is released.

EM: Don’t forget to share Green Exchange with your friends and colleagues so they can start this adventure with all of us.

CD: Facebook, Twitter, Instagram, email, fax, telegraph…whatever you need, we’re here to serve and we’ll be back soon with something blue.

EM: That’s it? That’s your closing line? Really?

CD: Ok, sorry it still needs some work. Let’s just say Ciao for now

EM: Yeah…Ciao!

CD: Ciao!

END

Check out the Circular Economy series page for complementary resources & bonus materials.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

Music Credits: License by Ins. Green White Space.

Picture by MUSE – Science Museum of Trento in cooperation with Wikimedia Italia.

MADE POSSIBLE BY:
	The Nordic Council is the official body for formal inter-parliamentary co-operation. Formed in 1952, it has 87 members from Denmark, Finland, Iceland, Norway, Sweden, the Faroe Islands, Greenland and Åland.

Thank you to our media partners:

EPISODE TRANSCRIPT

Camille Duran [CD]: July has definitely started circular at Green Exchange, and we’re still hungry. Today we talk about cooperation. Not that kind of cooperation… More like voluntary cooperation, collaboration, working together.

We touched on this earlier in the series, but I think it’s time to dig deeper and work out some guidelines.

You’re listening to GREEN EXCHANGE, Circular Economy in Practice episode seven: Cooperate or Die.

Eleen Murphy [EM]: Wow, really? Cooperate or die?

CD: Wow, who is this?

EM: Surprise!

CD: Eleen! good to have you, I like it that you are coming on the show more often.

EM: You need some help, I can sense it /I thought you’d appreciate the company.

CD: Yes, I do.

EM: So…you were saying… cooperate or die?

CD: Let me explain… Of all species, the homo sapiens became the most powerful on the Planet. Have you ever thought about that

EM: The most powerful. Like even over cockroaches?

CD: Yeah, I can prove it. The international Union for Conservation of nature maintains a red list of endangered species and we, humans are ranking last on that list. So what does that mean?

EM: We rule the Planet?

CD: We dominate baby!

EM: That’s right!

CD: Don’t mess with us, you dolphins.

EM: Yeah, not sure how proud we should be about all that.

CD: You’re right, let’s calm down and think about this. It’s a good thing to meditate from the golf course.

EM: Yeah, in between two swings…

CD: Look around and ask yourself, how did we get to that level of domination of our environment?

EM: Well I’m interested actually, how on earth did we get this pathetic???

CD: Experts are still busy agreeing on the details but there are a few conclusions we can draw. Should I tell you the story?

EM: Well, that’s what we’re here for.

02:42

CD: There is a fascinating man called Yuval Noah Harari.

EM: Yuval Noah Harari?

CD: Right. And he writes fascinating books. One of them is called “Sapiens”. It explains how the homo sapiens came to dominate other species, to end up where we are today.

Homo sapiens go way back. Actually it’s the most recent evolution of the genus Homo. But still, we are talking about more than 150,000 years ago. You were not born Eleen.

EM: Yeah you might be right about that…

CD: So let’s rewind to 150 000 years ago: There is archaeological evidence of homo sapiens back then, their brains were the same size as we have today, even a bit larger.

EM: Yeah they were probably way smarter.

CD: We had a lot more hair though, overall.

EM: Moving on…

CD: Right. At this point we were clustered in East Africa, and we were living at the same time as other human species such as Neanderthals or the homo erectus.

Basically co-habiting. Nothing fancy happened. Picking berries, eating mushrooms, normal life with the crew.

Until 70,000 years ago. This is when we began to observe a real rise to power.  The homo sapiens started taking over. It starved to extinction all the other species around,

EM: Wow.

CD: We started dominating everyone, including our bro the homo rectus that had been around for over a million and a half years. Can you imagine?

EM: A million and a half??? How did that happen!?

CD: Well, Harari talks about an evolutionary flash, a superpower that was given to the homo sapiens by evolution – and that superpower was…

EM: Come on, don’t drag it out…

CD: Can we get a drum roll? Right. So this super power was: The ability to cooperate in very large numbers.

05:23

EM: Cooperation

CD: Other species could cooperate as well, but only up to a few dozens, like animals do. We started cooperating in hundreds, and then thousands, millions. Today if you think about it we cooperate in billions.

EM: Oh, that’s true.

CD: So How did this become possible? Because we don’t have an instinct for cooperating on a large scale,

EM: Right, for sure.

CD: This ability to cooperate had to be based on imagination. Harari says that we can cooperate with large numbers of strangers only if we believe in the same fictional stories. Fictional stories such as, “this tribe is trying to take our land, we should kick their ass”. Or, “this is the religion that will give you peace and protection, follow it and pray to this God, not to that one”.

“This is the man to vote for, because he is going to protect us from this happening. “

EM: That sounds familiar.

CD: Right? or stories such as “Circular Economy is the next mega trend and we need to make it happen before we run out of resources”.

EM: This is super interesting.

CD: Right? it’s this ability to follow a same vision and to cooperate around it that gave us the chance to dominate on a large scale.

I will stop here on the evolution part and the stories around it because i would really like you to read that book or listen to Harari – his work is fascinating and you’re probably going to understand many things about the world we live in – and about yourself as well.

EM: All right, I can’t wait to check this out!

CD: We put a few links on the episode page. So the point you’re trying to make here is that cooperation is at the core of how we operate as humans. And we tend to forget how important it is.

EM: Cooperate or Die, now I get it.

COOPERATION IS MORE PRODUCTIVE THAN WAR

CD: Now back to circular economy, I talked to someone who works with cooperation everyday. Her name is Annika Rosing, She is heading a department at the Nordic Council of Ministers, the Nordic cooperation, and together we discussed the role that international cooperation can play in helping drive sustainable production and consumption. Countries working together towards a Circular Economy, challenges and opportunities.

EM: Let’s have a listen!

08:19

CD: Annika, I pushed the record button, now is the official start of the interview, you cannot escape anymore.

[Laughter]

CD: Ok, just to set the stage before we dive in, Nordic countries consume way too many resources, way too many planets – and we have only one.

Annika Rosing [AR]: Yeah

CD: Fortunately, the Nordic Council of Ministers is on the case. Or?

[AR]: We have a large footprint and we need to find way to reach a more sustainable production and consumption. And I think all the Nordic countries agree that this is one of the challenges for the Nordic countries.

CD: Okay, good so Sustainable Production & Consumption is and important focus point in the Nordics – SDG 12 for the SDG nerds out there. So zooming into cooperation now: Why do Nordic Countries cooperate?

[AR]: I think it’s several different things. One is the geography: we’re close, or sort of close, and we’re in the outskirts of Europe. Secondly, we are all five very small countries in a global context. And thirdly, we have a similar welfare system and a similar system when it comes to taxation, etc. So I think it’s many different things that enables us to work together, but it’s important to mention that we have been constantly at war with each other for many hundreds of years. I think the last war was in the end of the 1700’s. So we have a history of constantly fighting with each other, and then finally after hundreds of years realising that it’s much better for all of us if we cooperate.

CD: Oh yeah? Cooperation is more productive than war? We should tweet this to a few people, no?

[AR]: [Laughing] No…

CD: Okay so the factors you mentioned are geography, a common welfare and taxation system, neighbouring cultures, and the fact that you are small countries that can not always face globalisation alone.

[AR]: There also has to be a good idea – a reason, a win-win context – for strong cooperation to start.

CD: Are you going to take Scotland if they break free from the UK?

AR: [Laughing].

INTERNATIONAL AND EXPORT MARKETS – COMPETITION IS HOLDING THE NORDICS BACK

10:57

CD: Ok moving on…I am going to play the devil’s advocate for a minute – Aren’t Nordic countries competing with each other on global markets? Isn’t it a little bit like “we cooperate in theory, we smile together to the media but I want the deal with the Chinese”?

[AR]: So when it comes to export initiatives, I think, since the Nordic countries are so small, they have a much stronger reason to work together than not work together. But the concept that we are competing with each other is actually an obstacle in my point of view. Going out on an international market together is something that is going to benefit all countries.

CD: Do we see that kind of cooperation on export markets yet?

[AR]: This is my personal comment: I don’t think we’re really there yet, but hopefully soon!

CD: So now, tell me how the cooperation works in practice, in terms of governance, maybe with the example of sustainable development and SDG 12…What’s the process like?

[AR]: The Nordic Council of Ministers is a voluntary cooperation between the Nordic countries, and it’s actually not one minister council, it’s actually eleven. All decisions are taken in consensus, and when it comes to sustainable development, the Nordic ministers for Nordic Cooperation are responsible for that, because it’s something that has to be done by all ministerial councils, all the other ten. And they have decided that we should put forward, within our Nordic Strategy for Sustainable development, a program for supporting the countries in implementing the 2030 Agenda.

And then we have this not very slow, but maybe complicated hearing process with all the other ministerial councils. So we now have a suggestion for a program that will be decided by the Minister for Nordic Cooperation in September. And when that’s decided, we have budget for a three year period and then we’ll go along with starting up the program. And then all the different sectors are on board.

CD: Okay so what I take from this: Decisions by consensus, you make program proposals in line with a vision, you go through a hearing process, make sure everyone is in line, maybe a bit of back and forth but once the program is approved   it is solid because everyone is on board. That’s the beauty of decisions by consensus, no?

13:48

[AR]: Yeah. The good thing with the consensus decision is that you have everyone on board saying, “Alright, this is what we’re going to do”. The negative thing with consensus is that it tends to be the countries that are the least ambitions are the ones that are setting the agenda, if you know what I mean. It’s a solid program, but it’s not as ambitious as it could have been.

CD: Yes that sounds familiar. So the programs are never really as ambitious as if it was one ambitious country operating alone of course. Annika we are going to talk more about cooperation at Green Exchange with a case study or two in the weeks to come, thank you for passing by and best of luck with SDG 12, you know we’ll be paying attention. You’re welcome back anytime.

[AR]: Yes, absolutely. Thank you!

14:48

EM: Okay, that was interesting.

CD: Yeah, I think so!

EM: And we should also remember that principles of cooperation apply not only to that kind of international cooperation but also to cross sector cooperation – for example, how can the textile sector cooperate with the fishing sector?

CD: Spoiler alert. Something is coming on that front!

EM: Nice plug right?

CD: Yeah. But you’re right, all types of cooperation are important – cross stakeholder groups, cross sector, North South etc. There is always some value in cooperation models.

EM: [To audience] Yeah guys, remember: that this is what got us to where we are today.

CD: You know we’ve talked about possibly featuring this case study from the Dutch circular economy roadmap. The one about the Green Deals.

EM: Yes I do.

CD: I think we should… It will show a very practical example of how cooperation can make miracles happen.

EM: Yes let’s talk about how we can do that. I know you have something cooking anyway around the ambitious Dutch circular Economy roadmap.

CD: Correct, to be continued… We should thank NCM for making this episode possible,

EM: Thank you.

CD: They are very active right now on the front of Sustainable Production and Consumption and I’m looking forward to digging into their upcoming strategies and roadmaps – and being constructively critical.

EM: Constructively critical?

CD: Although sometimes I like to be just critical.

EM: Oh do tell me more…

CD: Well, just criticising you know? Sending negative comments, negative energy…

EM: Is that right?

CD: Pointing fingers, judging, you see what I mean? Sometimes without really understanding. Feels really good.

EM: Yeah, I should try that one day. Let off some steam…

CD: And it’s quite easy actually.

EM: So you receive an idea, or read a report, or hear something…

CD: Yes, and you directly start to criticise, without any context. It’s journalism, after all.

EM: Alright I’ll keep that in mind. Great tip.

CD: You’re welcome. Eleen, thanks for today, should we plug anything?

EM: Yes! As usual, leave us a rating and comment on your podcast app, get your friends and colleagues to subscribe – the more noise you make, the more people we can reach. Send us an email, we answer them all.

CD: Great, Can I close now?

EM: Go for it…

CD: We’ll be back soon, with more green knowledge, inspiration and entertainment, keep up the good work in the meantime!

END

Last month, we took our time machine to the World Circular Economy Forum in Helsinki and asked 8 very brave volunteers to take a trip to 2050 and report back on what they found. In this episode we share the highlights from the trip and discuss in detail what we learned. Self cleaning clothes, soil health, vegetarianism, and yes – it looks like incineration will be out of the picture too. Strap in!

Volunteers:

Team Red:

Check out the Circular Economy series page for complementary resources & bonus materials.

Produced by Camille Duran
Published by Eleen Murphy
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

Music Credits: License by Ins. Green White Space.

MADE POSSIBLE BY:
	The Nordic Council is the official body for formal inter-parliamentary co-operation. Formed in 1952, it has 87 members from Denmark, Finland, Iceland, Norway, Sweden, the Faroe Islands, Greenland and Åland.

Thank you to our media partners:

EPISODE TRANSCRIPT

Camille Duran [CD]: Hi everyone. No I am not waking up, I am stretching. I am stretching because I am just back from the future. Yes, I was in 2050 for a short break with the team and a few friends… and I have to say this time machine is not as good as the one we used last year, in our series on climate finance. Anyway, we got the job done, I’ll explain in a minute.

Welcome, you’re listening to Green Exchange – we’re back to our Circular Economy series. We have new insights to bring to the table. I have to say that … in this episode we took risks that no one ever took before. But be reassured, everyone came out of it alive.

How about you? How are you? What’s cooking at the moment? Do you feel alive?

[Intro Jingle]

CD: You are listening to Green Exchange – Circular Economy In Practice: What will the future look like exactly?

Exactly… we don’t know, but we’ve tried to come up with an answer that is as realistic as possible. Actually no, it’s not true. Because that’s not how things work. It’s not about trying to be realistic and imagine what will the world be like in 2050. That’s the passive approach.

[Robot Voice]: Passive

CD: We cannot afford being passive here, I know you probably live in a bubble just like I do – but let me tell you, things are not looking good…

[Audio Clip]

CD: We cannot just sit in front of our TV and try to guess whatever will happen. I suggest we leave predictions to futurologists, mediums and …economists. At Green Exchange, we believe the future is for us to hold.

[Robot Voice]: Active

BACKCASTING: TAKING REAL STEPS TOWARDS THE GREEN ECONOMY

CD: So what is a proactive approach to future management? If you heard our very first pilot episode in late 2015 (looong time ago), you may remember a planning method we talked about in detail. This method is called backcasting – the opposite of forecasting.

Forecasting – as you probably know – is basically predicting an unknown future.

Backasting is about defining a desirable future and then working backwards to identify steps that we need to take for that future to become true. In other words, what are the policies and programs we need to roll out in the coming two years, five years, ten years, twenty years, for that future to become true. This is a way to create a roadmap a blueprint that we are sure will take us there.

You do this everyday with your children when you really think about it. You want them to become a lawyer, a doctor or an engineer – so for that future to become true they need to be well educated, disciplined and study hard. You know what’s the path, they will need to go to that type of school, hang out in that type of neighbourhood, say no to drugs – although I know a good lawyer that…[voice fades away].

And who cares about what your kids really want, right?

“No you cannot be an artist sweet heart, this is not a job this is a hobby.”

“Traveling the world hitchhiking? haha what a strange idea…”

“Stop crying, you will be a lawyer… get to work. I have been backcasting for years with your mother, you know?”

So… Back to our story. Earlier this month we got out of the studio to make a real-life experiment. We needed eight volunteers. Not any volunteers. People with vision, with experience, with influence, and knowledge of how the system works. We wanted a mix representing different countries – North and South – and coming from different sides of society (public sector, private sector, civil society).

Most importantly, our candidates had to be ambitious, and willing to take risk.

We also needed a stage, a big one. And a time machine, a good one.  Long story short we went to Helsinki in Finland to run our experiment as part of the World Circular Economy Forum. Remember when in Episode 5 Bas de Leeuw, our guest, talked about this forum and I caught him on record?….

[Audio Clip From Episode]

Bas de Leeuw: …and the agenda for the event next June.

CD: So can we come and produce a live talk show from there?

Bas de Leeuw: Absolutely!

[Clip Ends]

CD: There we were, a few months later, talk show on the big stage, and I don’t think they expected us to bring a time machine…  By the way I would like to thank all the project partners for making this possible: Sitra Fund, the Nordic Council of Ministers, and the World Resources Forum.

Fast forward – Our eight volunteer participants are standing on stage ready to time travel. We organised them in two teams. Team Blue and Team Red.

CD: In team Blue we had:

• Per Bolund, Swedish Minister for Consumer Affairs & Financial Markets
• Mariel Vilella, Managing Director ar Zero Waste Europe
• Wytske Van der Mei, Deputy Director for Sustainability at the Ministry of Infrastructure and the Environment.
• and Elin Larsson Sustainability Director at Filippa K, an ambitious Nordic textile brand.

[Audio Clip From Event]:

In team Red we have:

• Alice Kaudia, Environment Secretary in Kenya
• Nancy Strand, Director of the Norwegian Waste Agency
• Kimmo Tilikainen, Minister of Agriculture & the Environment, also in Finland.
• And finally Kari Herlevi, Project Director for Circular Economy at Sitra Fund in Finland

[Clip Ends]

CD: What happened next?

We set the time machine on “year 2050”. Each team was assigned two observation missions, so four missions in total – ten minutes per mission. The goal was to observe what a circular future looks like and harvest as many good ideas as possible within those ten minutes. This way, after coming back into the present, we would be able to define blueprints and roadmaps that will take us to that fully future.

In short, a backcasting gameshow – live in front of an expert audience. There was some pressure, that’s true, but I thinks we got somewhere.

[Audio Clip From Event]:

CD: Here, I just want you to press the red button when I tell you. Is that okay?

Guest: Yes.

CD: Are you ready over there? Are you sure you want to do this? [Laughter]. Okay, let’s go. So I’m going to first press and then I tell you…..Now!

[Sound of time machine]

[Clip Ends]

CD: While team blue was in 2050, I talked to team red to learn about what’s in the pipe at the moment, and the present challenges they are facing – and you can find the link to the full discussion on the episode page. Then it was time for Team Red to time travel.

[Audio Clip From Event]:

[Sound of time machine]

CD: Did it work? Yeah they’re here! Let’s give a hand for the time machine!

[Clip Ends]

CD: while Team Blue came back to 2017 alive. Worth mentioning. And – same principle – I sat with Team Blue to ask them a few questions about their current work- and you can find the full panel discussion on the episode page.

Twenty minutes later – when team red completed its two missions – we brought them back into the present. And here again, everyone made it safe and sound. Thank you to our time machine engineers who kept us out of trouble.

It was time to hear what was observed by our guests in 2050. In other words – what’s their vision of a desirable future, what does a fully circular economy look like? This is where I would like to spend a bit of time today so we can visualise and understand the kind of insights that came out of this experiment.

NO FOSSIL FUELS, CLOSED-LOOP MATERIALS, NO COTTON AND NO CARS

09:52

Wait – let’s get my colleague Eleen on the microphone to help me debrief here. Hello Eleen.

Eleen Murphy [EM]: Hello!

CD: How are you? How circular do you feel today?

EM: Pretty circular…I think I ate too much carrot cake so that could be part of it [laughter].

CD: Okay so you’ve been following our little experiment and spent some time analysing the results.

EM: I have.

CD:  So all their observations were captured in graphic form by our colleague Carlotta Cataldi who did an amazing job in documenting all this live.

EM: Well done Carlotta! And the full graph and drawing is also available on our episode page

CD: Right. But before we go through all the insights, I’d like to play a few sound bites to give our listeners a sense for the dynamic of the discussion. There was a lot of excitement…

EM: Yeah, clearly!

10:41

[Audio Clip From Event]:

Mariel Vilella [MV]: Yeah, so we had a really vibrant discussion and we all agree that 2050 is going to look amazing!

Per Bolund [PB]: Of course we have efficiency production patterns, but there will also be very, very localised production patterns where we are actually mending, repairing our goods and our clothes in the local neighbourhood in every block in our cities

Kari Herlevi [KH]: So we discussed that soil health is in the core of the agricultural policy practices, and nutrients are also circulating and are used in a more precise way.

Elin Larsson [EL]: So in terms of materials, we’ve banned fossil fuels, but it’s a multi-diverse palette of different sources.

KH: In addition to that, meat consumption will be reduced and the vegetarian diet increased.

CD: Oh really? We’re all going to be vegetarians?

KH: Nope, but it will be increased.

CD: Okay so we’re going to go to mission two, which was: how will we shop in 2050?

MV: We’re going to have services, and it’s going to be possible to repair your clothes, to give it back, to maybe redesign them so it’s more innovative.

PB: We’ll start sharing our clothes much more. We’ve seen that the cars here are kept standing 92% of the time, and actually I think we all have suits in our wardrobes that are used even less than that. So if we can subscribe to clothing services, so instead someone comes to our door with a wardrobe every week, and we leave it back after the week is done, so we can use our clothing material together and have a common wardrobe – I think that’s a success story.

CD: Yes, interesting, I give a bonus here, but it’s going to be tight!

KH: More importantly, we have shared living spaces, and cities are walkable so you can really get everywhere.

CD: No cars?

MV: No cars.

CD: Oh really? No cars? Show of hands here? Ahh interesting, you get a bonus here!

[Clip Ends] 

EM: You got them pretty excited

CD: Yes, they were all great and it was fun. So let’s dive in!

EM: Well overall the level of ambition was good, i would say it’s very encouraging. Some bold ideas, which is what we need – remember we’re talking about 33 years down the road so we quite a bit of room to be ambitious here.

CD: Correct. Should we go mission by mission?

EM: Yeah I think so. So, there was four missions as you explained, on four different themes – each mission outlined a question and a couple of SDGs to keep in mind for the observation exercise.

CD: Yeah, so Mission One was: What does textile production & supply look like in 2050?

EM: Yes, and we said we would talk about textiles in to this at this point in the series, so.

CD: Well there you go!

EM: Yeah so there was a lot of focus on materials of course – beyond fossils. So, only recycled, bio-based, closed-loop materials in the future. Production will be much more local than it is today as well, with individual fashion, 3d printers for clothes, and a local makers movement.

CD: Right and these are things we’re starting to see in different regions, but it’s still very much at the prototyping stage. This was a point that we talked about quite a bit in the two panel discussions, you know this local versus global industry for textile or other products. What kind of circle are we drawing here when we talk about circular economy? Global loops of materials, where we’re sending the materials to China where they’re being recycled and brought back into the production line? Or are we talking about more regionalised assets, localised production where communities are in charge of the making, as an advanced version of the makers movement we see today, but with much more localised assets. That was a very interesting point in the panel discussions.

EM: Yeah and it seems most people are unsure of how things should look.

CD: Yes and I think this is mainly because industry and all the big brands are not ready to accept that things will probably look very different, so they don’t want to imagine their empire disappear…and they are a dominant voice in the circular economy discussion today, so…

EM: Exactly

CD: what else came out of this mission?

EM: Well, regulations will demand sustainable procurement they said. No more incineration of textiles, which is great. Full transparency will be provided to the consumers and regulators, and they’ll be using no harming chemicals…

CD: Long way to go…:)

EM: Yeah!

15:41

CD: Mission two was also focusing on textiles…

EM: Yes it was, but this time on the consumer side. So: what will shopping for textiles and fashion will look like in 2050?

CD: I want to know!

EM: Yeah, me too! Well, according to team blue: “throwing away will not exist anymore”. So, we don’t throw anything out. And: all clothes will all have a story, they say.

CD: Ah because they will be worn by several people, so that’s where the story is coming from, I like this idea. Maybe not for all my clothes – I don’t know if my socks need to have a story…you see what I mean?

EM: Well your socks will probably be compostable, I’d say…

CD: Of course…great idea. Or edible…

EM: Ugh…We’ll see what the future brings…

CD: It’s true!

EM: Well, moving on anyway! Apparently, they say materials will be completely different from today: more durable, no cotton, no virgin polyester…

CD: Wow, no cotton.

EM: Yeah! That’s a totally different world. According to our guests there will be hubs for services, every thing on a subscription basis. Community wardrobes, repair, seasonal storage, and so on. And, micro taxes, and very high customer service.

17:22

CD: All this were great points and I know there are many other ideas around all this but these were the main points. Team Red?

EM: Yeah, so Team Red, you know, were on two different missions. The first one was: What are the fundamentals of the bioeconomy in 2050?

CD: And for those interested in more bioeconomy talks, remember we have a series on this and our previous agriculture episodes also touch on bioeconomy. What did you take from the debriefing?

EM: Well obviously, soil health will need to be at the centre of all policy and programs world wide. Everyone agreed on that.

Forest management was a big topic as well with two team members from Finland and one from Kenya. Intensive restoration in Africa was one thing. And lots of products are made from the trees.

CD: That was also an interesting talking point in the panel discussion with team red: What is sustainable forestry management? How and where do we make those products from trees because as discussed in our series on bioeconomy: you can have sustainable forestry practices in a country like Finland, for instance, but if you send your wood to China to make your cellulosic fibre for instance – where its done in a way that would not be permitted in Europe, with a lot of impact on the environment, harmful chemicals etc. – then the impact of your industry ends up being really bad overall. So i hope that in the coming years we are going to be able to level the playing field.

EM: Yeah that’s a great point. And there is a lot of work to be done on that front. What else… they envisioned hydroponics everywhere, wide spread vegetarianism and zero food waste…

CD: Zero food waste, that would be good. I take that, we will also eat insects. I personally started, if you want to know…

EM: Oh really!? What do you eat?

CD: Well I eat crickets and roasted worms – mainly in the salad and sometimes in my muesli.

EM: Really…

CD: Not in the muesli, but in the salad it’s good. So get used to it Eleen it’s the future!

EM: I’ll keep that in mind. I have a few years to work on it…

WHAT DO CIRCULAR CITIES LOOK LIKE IN 2050? INCINERATION IS ON THE WAY OUT

CD: Right. Mission 4?

EM: What does living in a circular city look like in 2050?

CD: This one was good.

EM: Yeah, It was, and here’s what we got. Construction materials are sustainable, all buildings are high standard. People are sharing space all the time for everything, ownership is not the standard anymore. Cities are clean and completely silent – and every person has access to nature and biodiversity.

CD: [Laughs] Yeah we went a bit off track here because I don’t know if this is circular economy, the nature and biodiversity part, but why not…

EM: Hey, but it sounds nice, right? There’s also Zero Waste – so no incineration and landfilling of materials. And you had an interesting discussion about this in one panel, right?

CD: Yeah, many people are still unclear whether waste incineration has a seat at the circular economy table or not, and I think it’s still very uncomfortable to admit for many, but everyone is more or less aware of the answer. Maybe we can have a quick listen to that part:

20:51

[Audio Clip From Event]

Mariel Vilella [MV]: Today they are having the seperate collection of 85%. By 2030, if all cities in Europe had 85% separate collection, incineration would be reduced to 75% percent. So I think incineration is this model from the 80’s and 90’s and this is what we see also in northern countries – they have invested in this large infrastructure which is there and has created a bit of a lock-in situation, a bit of an over-capacity. And it hasn’t given the flexibility necessary to overcome that model, whereas in the south, this investment didn’t happen, and there’s been more opportunity and more flexibility to not go through the incineration stage. I think this is the lesson that is important to bear in mind when we really want to build a circular economy.

CD: So I have a tough question for Per Bolund. And you see me coming, right? So I’m going to ask it. I’m a resident of Sweden, so I’m going to say “we” – we have this excuse that there’s so much waste to incinerate in Europe, so we’re helping all the countries that have landfilling to recover their waste by importing it to Sweden where we have overcapacity. And that’s okay, and we have decades in front of us. So my question, which I prepared of course, is: Instead of importing waste to burn in Sweden, how do we export a circular economy system that helps those countries move faster towards higher recycling rates, using the zero waste roadmap (which is different than waste-to-landfill)? That’s an important distinction to note in the media. And how is the Green Party engaging on this? Because I’m behind.

Per Bolund [PB]: Excellent. Well I think that we are in a lock-in position and we have to start unlocking it. And we are working on that and we are doing enquiries on how to get the economic system moving from incineration towards recycling, because we know very well from science that we can save so much resources and energy if we reuse and recycle instead of just incinerating. So we are moving ahead, and of course there’s quite a long journey to go, but we are also not just incinerating, we are actually champions when it comes to recycling our goods. So we have very efficient recycling systems and I think that is something that we can really give access to to the rest of the world.

CD: When are you going to convince the government about this Swedish circular economy roadmap? Incineration will not be in the blueprints, will they?

PB: Absolutely. We are taking huge steps forward, so I think that more and more people, both within government and within politics – but also from the consumer, producer and business side – are seeing that we have so much to win in moving to a more circular pattern. Not least providing labour opportunities: the kind of mass production that we’re stuck in today is very efficient when it comes to labour, it’s very automised. And if we can go in a pattern where we are reusing more, we are refurbishing, renovating our materials, that would provide lots and lots of new labour opportunities. This would really solve the problem in many countries, where we have a part of the population that don’t get access to the labour market.

[Clip Ends]

24:34

CD: Back to what was said in mission four?

EM: Yeah that was pretty much it… Oh, there was no motorised transport! People appreciate the value of slow living, they walk everywhere. no washing machines, and self cleaning clothes

CD: Self cleaning clothes?

EM: Yep, apparently.

CD: What?

EM Yeah I’m not sure if I can expand on that one, or explain it. But yeah, that’s our future.

CD: Okay well, let’s move on, there are many things we cannot understand from 2017…Can you imagine that one day – inch’allah – we may be listening to this podcast from 2050, sitting here with self-cleaning clothes, feeling stupid because team red were right…I think we are young enough for that to happen…no? We will be in our sixties in thirty three years?

EM: Yeah, our sixties I think. Hey, do you think we’ll still be doing Green Exchange in our sixties?

CD: Of course we will. I calculated it actually that if we keep at fifty episodes per year, it will be episode 1690. One thousand, six hundred and ninety.

EM: That’s a lot of episodes!

CD: Let’s do it!

25:55

CD: We’ll post all the links I think for those who wish to dig deeper. I would like to thank everyone who participated in this experiment: the project team and the guests. It’s always pleasant to get support and enthusiasm when we are trying to push the boundaries of what can be done on a stage in 90 minutes. Eleen, thanks for helping me with this debrief, it’s always better when you’re around!

EM: Thank you Camille! Always a pleasure.

CD: Stay tuned, in next episode of this circular economy series we will talk about one big idea that kept coming back during the discussion and that we haven’t covered yet – on purpose – so we can dedicate a full episode to it. We will talk about international cooperation & collaboration in general.

We hope you had a good time. This episode was made possible by the Nordic Council of Ministers, a big thank you to their team for the support in producing this debrief.

Backcasting – that was our focus for today, but really, it should become a habit for everything we are trying to achieve. it is powerful.

We’ll be back soon with more green knowledge, inspiration, and entertainment. Keep up the good work in the meantime!

END

Send us a DM on Instagram (@greenxeurope) if you want to know more or get involved.

Check out the Circular Economy series page for complementary resources & bonus materials.

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Gabriela Lemos Borba & Linnéa Hultén
Transcribed by Oanh Nguyen
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

Special thanks to Johan Signer, Chuva Featherstone & Tattoo Inkarnation

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Camille Duran (CD): Today we talk economics. And to do so, we have the Vice President of the European Commission on the show! Jyrki Katainen.

Yeah baby, and we go deep!

[Jyrki Katainen’s voice]: We are very committed because according to our own understanding, Circular Economy will be the next mega trend in the world market economy.

[MUSIC]

CD: Vice President Katainen is in charge of Jobs, Growth, Investment and Competitiveness at the European Commission. Who better than him could we invite to address those issues in depth in the context of the EU Circular Economy policy package of course.

So today I wanted to make a mark. A mark to celebrate the European Commission’s commitment towards Circular Economy.

So I called a tattoo artist and got into a little bit of a multitasking exercise during the interview.

You’ll understand in a minute.

[Tattoo artist’s voice] So, if there’s anything, just tell me and we’ll take a break. Don’t forget to breath, and stay still….

[Telephone operator’s voice] Good morning, Cabinet of Katainen?

CD: Hello good morning, this is Camille Duran from the Green Exchange?

[Telephone operator’s voice]: Yes, I’m just going to put you through to Vice President Katainen now, are you ready?

CD: Yes, thank you.

[MUSIC INTRO]

You’re listening to the Green Exchange, episode four of our series: Circular Economy in practice – Seducing The Financial Sector.

Yes, I thought that getting myself a circular economy tattoo on the shoulder while interviewing Katainen was a good idea since we were going to talk about commitment.

But let me back up for a second because this is actually a very serious interview.

CIRCULAR CHANGE – LOW HANGING FRUIT & GOVERNMENT SUBSIDIES

02:08

As we touched on earlier, in a transition towards a circular economy there are some changes that can be made incrementally, or by improving existing systems. Like increasing recycling rates for instance, of better designing products so they can enter circular loops. I am not saying it’s easy, but we are talking about improving practices within an existing system.

Then you have changes that are more radical. And they need to happen too. Selling products ‘as a service’ as we discussed is a good example. This creates a complete different cash flow structure for a company. Instead of receiving 200 euros right away when you buy your new jacket, the company may receive 5 euros per month from the subscription. Even if everyone agrees that there are long-term economic benefits to circularity of the economy, there are a few roadblocks we need to figure out.

This is something I had a chance to discuss earlier with Bas De Leeuw. He is the Managing Director of the World Resources Forum – by the way, we will be publishing his extensive interview in full as a bonus episode. To give you a taste, here is one key moment which connects to today’s episode and what I was talking about earlier.

03:26

BAS DE LEEUW (BDL): Industry, the business sector, is of course very diverse. Not only big and small but also in the way they would like to respond to consumer markets and to their target groups.

CD: Yes Bas. I asked both a large furniture company and a large packaging company if they recognised the economic challenges of the transition and the lack of financial incentives in the short term. In other words, why would I disrupt my own empire when I am making huge margins in a throw-away single use model, with global supply chains and cash flow structures based on volume sales or asset sales.

Of course they didn’t want to answer this and told me instead that “Sustainability is in the DNA of the organisation bla,h blah, blah, and all the CSR (Corporate Social Responsibility) stuff.”

What are your thoughts on this?

BDL: There are many companies, in particularly big companies, that want to be seen as pioneering, as leading society, partly because of corporate social responsibility arguments, branding arguments and that’s of course good. But I think it would be unrealistic to expect that if there is no business case for drastically investing in the circle economy that all companies in the world would start to do that. So then once more you need to have the supports from governments, taxes and subsidies. Also the small and medium sized enterprises cannot be expected of course to invest in, let’s say, secondary materials when they know that they can get raw materials for half of the price.

CD: So what you are saying that in terms of financing this transition or financing the shift, it needs to be facilitated by government and by subsidies and they play a key role in facilitating this move.

BDL: Absolutely, absolutely. And of course, there, I mean, the low hanging fruits where the business case is very obvious, of course, there is no support needed and businesses are already taking a good action. But, where the fruits are hanging a bit higher, you need to influence those framework conditions as a global governance.

CD: And that’s exactly what we wanted to cover in our interview with Vice President Katainen.

I feel we are ready to jump in. Back to the tattoo shop. We have to make a little bit crazy setup because the sound of the machine was quite loud but I guess it worked.

We were going to have Vice President Katainen over the phone for some 30 minutes, and since the tattoo artist could not come to the studio with all his equipment and stuff, the studio came to the tattoo artist with all the equipment and stuff.

6:49

[Short conversation between CD and the tattoo artist.]

[BACKGROUND SOUND & DISCUSSION – TATTOO SHOP]

[Johan Signer’s voice] When it comes to deciding what we are going to apply to Camille’s shoulder, we have the approach of making an abstract symbol containing three circles that are not yet closed. And three circles symbolise industry, public sector, civil society. That three circles are not closed symbolises that work needs to be done.

CD: And when we reach a full circular economy then we can close it. In twenty years.

[Short conversation between CD and the tattoo artist]

A few moment later.

—–

07:49

CD: OK, let’s go.

[Telephone operator’s voice]: Good morning…cabinet of Katainen.

CD: Hello good morning, this is Camille Duran from The Green Exchange.

[Telephone operator’s voice]: Yes. I’m just going to put you through to Vice President Katainen now. Are you ready?

CD: Yeah, OK. Thank you.

[Music]

CD: Hoopla- go DJ.

JYRKI KATAINEN (JK): Hello, Jyrki Katainen.

CD: Good morning.

JK: Good morning.

CD: How are you?

JK: I’m fine.

CD: How is the day in Brussels so far?

JK: Yes, it’s quite nice, actually. Very summer-like weather, quite warm and sunny. Not always very typical weather in Brussels.

CD: Thank you very much for being with us, I think you were briefed by your team on the key points we wanted to address, so maybe we can jump right in?

JK: Yup. Very good.

CIRCULAR ECONOMY – THE NEXT MEGA TREND

CD: Vice president Katainen thank you very much for making time for us we know how busy you are. We are going to talk about financing the transition towards Circular Economy. But before we dive in I wanted to get your feeling on how serious and committed the EU actually is about the Circular Economy transition?

JK: We are very committed because according to our own understanding, Circular Economy will be the next mega trend in the world market economy because it makes a lot of business sense. It has big environmental and societal benefits. It will help businesses to reduce risks and also it will raise productivity and competitiveness. So those are the reasons why Commission proposed a Circular Economy package just a little bit more than year ago.

CD: Well that’s good to hear, because we feel many organisations are very serious about contributing to its implementation.

JK: Yes.

CD: Today I wanted to use this interview to make something symbolic, something that will last and that we’ll be able to look at in 2030, and hopefully in 2050, and feel very proud of, looking at the transition we’ll have been able to achieve all together.

Now you probably have no idea what I am talking about right now.

I am actually in a tattoo shop, and I have a tattoo artist ready to go beside me, and what I would like to do is get a circular economy symbol tattooed on my shoulder while we run this interview – if it doesn’t make you uncomfortable?

JK: No, no, no, no. It sounds interesting!

CD: I though about this, and I think that sometimes in life you have to show that you’re serious. And we all are serious here.

JK: You are very brave and committed.

CD: Yeah, let’s go because I want to be careful with your time. I hope it’s not going to be too noisy.

JK: Best of luck.

CD: [Aside] I pause here for a second. In the post production process we lower the volume of my track while he replies on the phone because the sound of the machine is quite disturbing.

Alright. Back to it.

11:22

CD: So at this point in the series, we have introduced everything and we really want to dive into the financial aspects. So, in the financial industry; first of all, we are successful when we minimise risks and maximise returns – and it’s kind of the golden rule, right?

In practice, how can we incentivise the financial industry to support companies that are successfully making the transition, and avoid those that cannot or are in a shrinking sector?

JK: Well sometimes slow repayments and low rates of return might make it difficult in the beginning to market projects in green economy but I firmly believe that financial sector is willing and capable to adapt new business models.

Sometimes it may be necessary for the public sector to step in with guaranties to cover first law seizing in order to reassure private investors, but we are confident that once the viability of this project is demonstrated, these concerns will dissipate.  EU has established a new financial instrument which is named European Fund for Strategic Investment.  Its acronym is EFSI.  And it’s part of the European Investment Bank and it’s providing risk financing to private and public-private partnership investments, and this is an excellent tool for new technology investments and circular economy businesses.

But the main issue I think in this field is to create regulatory clarity and certainty for the private sector. For instance, as part of our Circular Economy package we proposed that we have to increase recycling of waste, and there will be an exact time or exact year when this has to happen. It’s legally binding target to member states. Also we want to reduce significantly municipal waste going to landfills. So once the regulation is in place, the entire road starts adapting there and then financial sector most probably will follow the needs of the investors.

CD: Right. And this is a key issue, often discussed with green finance. How do we build enough confidence so the private sector can really step in with financing. We’ll talk more about this, but another question first:

We see flows of money changing in a circular economy. For instance, the pay-for-use model has a very different cash flow structure from the traditional pay-for-ownership approach. And this directly impacts the cost structure of the company and of course its financing requirements. Do you recognise this challenge, and how can we facilitate the shift? What are some of your thoughts around this?

14:39

JK: Yeah I acknowledge that transition towards a circular economy will also challenge some established ways of how business is done. Our role is to help and support innovative approaches and encourage new business models; for instance, announced as part of the Circular Economy package, the action plan in which we are working on launching a platform to support the financing of the circular economy.

This platform should bring together Commission, European Investment Bank, national banks and commercial banks interested to participate and the aim would be to look into existing possibilities for financing circular economy projects, exchange best practices and point out gaps and eventually propose improvements and propose new instruments for financing circular projects.

15:39

Last January I participated in Davos annual meeting and it was quite fascinating to listen that there were already a big amount of banks – well known established, well-established commercial banks – who were already deciding new products for circular economy needs. For instance, they said that leasing is growing business and the leasing needs different financial opportunities than just a linear business model.

But it’s not only about financing. In early June this year the commission presented guidance through a communication aimed at supporting consumers and businesses and public authorities to engage confidently in the collaborative economy.

These new business models can make really an important contribution to job growth in the European Union, and encourage and develop in a new responsible manner. The lack of legal clarity and regulatory recommendation sometimes hamper the development of the collaborative economy in Europe.

So with this communication, the commission explains how to apply sixteen E.U. law to collaborate the economy with the objective of promoting the balanced development of a collaborative economy in Europe.

THE ISSUE WITH GDP & INCENTIVISING THE COMMERCIAL SECTOR

17:18

CD: If the efficiency of the economy increases because materials are not thrown away but enter new production processes, a positive effect on GDP is to be expected – even if the estimation is rather difficult. Do you like GDP as an indicator by the way?

JK: Yes I think it tells what it tells. I mean it doesn’t tell everything but it tells the production and normal economic growth.  So I think it’s a useful tool but we should not expect everything from GDP.

CD: I agree, yes. One negative effect on GDP is the effect of repair and reuse – which has a positive societal value, but still,  with repair and reuse, we need less products, so less volume of sales. What do you tell a CFO, a CEO, and their shareholders when they logically forecast such a scenario (less volume of sales)?

JK: Well we don’t have any exact estimate how many jobs and how much growth the circular economy or a broad range of actions proposed in our action plan will deliver.

However, there are a couple of international studies which are quite interesting. The first study indicates that resource efficiency is one of the main drivers of company’s competitiveness.  EU manufacturing firms spend on average forty percent of the costs on raw materials compared to a share of twenty percent for labor costs.

It is estimated at a better use of resources could deliver savings over six hundred thirty billion Euros per year for European industry. Another study shows that business-led, private sector estimates…says it has the potential to boost EU’s GDP is very significant if we have more circular economy business models up and running. They are talking about close to 4% higher GDP only because of resource efficiency.

19:47

CD: How can governments incentivise and support their commercial sector to activate the shift and deliver short term results when the global landscape is so competitive and “linear”? Maybe you have very good intentions as a company and you are keen on implementing the strategies we are describing in this series. But your competitor in Asia doesn’t care, you’re playing on a global landscape, there is a war on prices…How do you compete?

JK: Well I’m not very sure if the world is still leaning towards a linear model. I just came back from China and there we discussed circular economy because circular economy is included in China’s current five-year plan and they are taking it very, very seriously. And everybody understands why because there is an environmental necessity.

And we agreed that we will compare our regulatory changes, or our ideas how the boost circular economy business models, both in China and in Europe; because in Europe, of course, we have environmental necessity to be more sustainable but also we have an economic necessity because our production should be higher added value, and our productivity should be higher in order to finance welfare model of our economy. So that’s why circular economy business models are necessary in order to improve added value and by doing so we can get more revenues for welfare society.

So the world market is already changing and one reassuring or assuring fact is that if you look at the best practices or best examples in circular economy field, they come from private sector.  So private companies are leading the development at the moment. Then it should show everybody that Circular Economy is not just a public sector’s aim or traditional environmental stuff, instead it’s already up and running and it has come from the business logic. And now we as a regulator and decision maker have to understand how we can foster the development.

22:24

I just give you a couple of examples. The first one is that the public procurement accounts roughly of one fifth of EU’s GDP, so it could be a powerful tool to boost/activate circular economy business models if decision makers at local level and at the national level would use our guidlines permission as provided voluntarily […] for member states and for municipalities…

[SKYPE CALL DISCONNECTS]

CD: The call is disconnected. Let me just restart it.

23:05

CD: Hello this is Camille Duran again. Yeah we were disconnected.

Telephone operator: Oh, OK.

JK: All right let’s continue.

CD: Yes sorry we got disconnected.

This is very interesting, and it’s going to be encouraging for the financial sector to digest this because those guys are not so much into saving the planet, as we know they are more making sure they are going to get actual returns on their investment.

JK:  Yes that’s right. Circular economy in its terms; in the term circular economy, both words really matter. There should be circular and there should be economy. And basically for policymakers, if we want to foster the circular economy, we have to see or we have to make sure that profits are coming from somewhere.  Otherwise there’s no profit, there’s no economy. And that’s why regulators have to be very cautious not to regulate wrong things but instead to create right incentives which will change the business logic and aims the direction where the profits are coming from.

CD: I’m curious to hear your take on the tax system we have today and the necessary shift from taxing labour to taxing natural resources. Any recent development on that front?

JK: Yes taxation is a very good tool but at the European level it’s quite difficult to get common taxation because it in the decision progress we need unanimity and only one country can pluck everything but commissioners proposing. That’s why the commission itself has that much attention to European wide taxation but we are also providing information to member states to look at the best practices from other countries.

CD: OK so this is not something you are directly involved with but you provide some guidance’s and information to the national governments…

JK: Exactly.

CD: Vice President Katainen, thank you for your time. I know you need to run and I am glad we could get into some levels of detail together. I still have half an hour of tattooing to go through before my circular economy symbol is ready.

JK: OK. Good luck!

CD: If this becomes a thing at the commission, we could start an Instagram profile dedicated to circular economy tattoos. What do you think?

JK: That’s a good idea.

CD: Good luck and speak to you again soon.

JK: OK thank you very much. Thank you. Bye.

CONCLUSION – SENDING TATTOO PROOF TO VICE PRESIDENT KATAINEN

 25:59

CD: If once you had told me that one day, I would send a skin picture to the Vice President of the EU Commission, I would have called you crazy! But you know what, we had to send a proof that this was all real.

Now, we got very important insights from that discussion. Let’s make good use of it. We hope you like it and we’re going to follow-up on those points as we unfold the rest of the series.

In next episode Barack Obama is getting his own circular economy tattoo, and I give him a call from an helicopter on fire.

….No I’m kidding; the helicopter was not on fire!

Remember, you can find us on Facebook at the Green Exchange talk show. Click ‘Like’ and we keep you posted from there. Subscribe on iTunes or in your favourite podcast app. This way you can carry The Green Exchange in your pocket and listen from wherever you are.

We’ll be back soon for more green knowledge, inspiration and entertainment, keep up the good work, in the meantime.

END

This is the fourth episode of our series about Climate & Finance. Missed the three first chapters? You may want to go there first: Episode 1 // Episode 2 // Episode 3 // Episode 4-1

You know the real problem with money – apart from never having enough? It’s that even when we don’t spend it – to buy stuff that we don’t really need – our bank, pension fund, insurance company are investing it on markets. And with our money, they finance technology and infrastructure projects that are doing harm to the Planet or to society.

This podcast series about Climate Finance was created to investigate what’s going on behind the scenes, and what needs to change. In this episode we talk to Jakob Thomä from the 2° Investing Initiative to review how can the financial sector align with the climate goals from the Paris Agreement. This episode is released in two parts.

Final Quotes / Outro Voices:

20:30 Stephanie Chang, Assistant Director, Sustainability & Climate Change at PwC.

21:31 Mike Clark, Ario Advisory.

21:49 Karsten Löffler, Frankfurt School and the UNEP Collaborating Centre for Climate & Sustainable Energy Finance.

23:17 George Latham, WHEB.

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Linnéa Hultén
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

MADE POSSIBLE BY:
	WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature.

Thank you to our media partners:

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Camille Duran (CD): Hi there. We’re still in chapter four of our Climate Finance series. If you missed the first part of this chapter you may want to rewind a little bit because we’re going to jump right in and continue our discussion with Jakob Thomä from the 2 Degree Investing Initiative.

We’re talking about measuring the performance of institutional investments, more specifically how they perform against the two degree trajectory of the climate goals. We need to drive a transiton in the financial sector and finally measure properly the true impact of our investment decisions. Because what gets measured gets done!

CLIMATE FINANCE – CHALLENGES FOR FINANCIAL REGULATORS & POLICY MAKERS

CD: So Jakob, the main point we were making in part one is that, as an asset owner or portfolio manager, I need to benchmark my performance against the climate goals.  And more specifically, I need to benchmark my performance against the climate goals translated into targets for the country, sector, and asset class I operate within. This means that, as an asset owner or portfolio manager, I need to stop benchmarking my performance against what I did last year or how other portfolios performed within my asset class. It’s the two degree trajectory that matters.

Jacob Thomä (JT): Absolutely. The two degree goal is the goal at the end of the day, and it’s not trying to be better than your peers. So from that perspective: all climate assessments in financial markets, in order to be powerful and meaningful, requires a reference to two degrees. Even for the person who is doing it – because at the end of the day you want to understand where you sit against policy goals. And that’s where I think the Financial Stability Board Task Force has done such a great job of recognising that and saying, “You need to measure how you stand against two degrees, we don’t care if you’re better than your peers. That’s not the benchmark we’re looking for”.

CD: Okay, now I would like to talk about free-riding for a minute. The ski season is over, so we’re not going to discuss that kind of free riding, but rather the challenges that financial regulators & policy makers will meet in some cases: What happens when – in a given sector or asset class – some investors are doing the job and performing against the absolute benchmarks – and some others are not doing what they are supposed to really, and instead are hiding behind the good performance of others within their sector or asset class? How do deal with this?

JT: Yeah sure. So there is the classic free riding problem, which is almost an extension of what you just said before. Which is, if I’m better than my neighbour, but my neighbour is doing a poor job – then am I doing such a good job to begin with?

I think one fascinating element that we see now is, thanks, we should say, to the global financial crisis, the tools that financial regulators and policymakers have to monitor and regulate the financial institutions is just on a totally different level than it was, let’s say, a decade ago. And so, I think that also changed the capacity for finance regulators and supervisors authority and policymakers more generally to tackle this question.

To give you one example, after the global financial crisis, new insurance regulation came about to prove the stability resilience of insurance companies in Europe, which is called ‘Solvency Tools’. A solvency tool regulates all risk related issues around insurance companies, both on their liability side (that needs the money they give for the policies that they issued to households, like life insurance etc), and on the asset side – so that’s investment management arm, which is the classic stuff really. And here a part of the seventy tool regulation actually require insurance companies to share the portfolio data with their supervisory authority. That means for about two years now, maybe a little bit less, every quarter, all European insurance companies send their portfolios to the regulator. So, really bottom-up portfolio data. Which means this data is being collected and actually each insurance regulator in each member state country in Europe – and that includes non-Euro so that includes all E.U. countries, whether they’re in the Euro or not – can actually internalize this kind of assessments and climate global assessment, and try to understand, “Is that asset owner doing more or less than the other? Do I need to have a word with them?”, “Do I need to think about policy incentives?”, and that obviously depends on what the regulator wants to do.

CD: I see, so that sounds rather promising.

JT: What I think is really exciting is that you don’t need new legislation in order to create that transparency to begin with many countries, at least for insurance companies.

CD: Yes, definitely and some public pension funds are now providing transparency on their portfolios as well. But the point here is that the global financial crisis gave birth to those regulatory frameworks that we can start to use to see exactly what’s going on financial markets.

KEY DRIVERS FOR INVESTORS & ASSET OWNERS – MANAGEMENT, MARKETING AND MORALS

06:04

CD: Ok so we now understand better what proper performance benchmarking should look like, what are the dynamics of change in that space and how can financial regulators and policymakers get enough visibility on portfolios to drive the transition. Now, I’d like to take the investor perspective and touch on the why? As an asset owner, why should I change the way I measure my performance and the way I invest right now?  Because I don’t have a regulator knocking at my door with a stick yet! – So I am wondering what are the key drivers for an early-mover in that space?

JT : So you can speak about this three M’s of financial institutions’ motivation, which is management, marketing and morals. So the first intuitive one is that it’s a risk management issue. Climate change presents a risk, both on the physical risk side – so there’s a flood, our power plant gets affected, it doesn’t produce and I lose money. ANd on the transition side – some policy maker says, “Never mind, no more coal fired power plant, no more petrol vehicles, and no more coal mining”, and so the cash flow gets to the transition side. So that’s really where it is prudent management to manage that.

And, I would say, the first objective around this risk for financial institutions is the management side, and the management side is also the policy risk that they face directly, so the financial policy incentives, they might get or the pressure from regulators to manage this.  And so that’s why I would say the management side is part of the equation right now, but probably the more prominent driver of the action that we see is the marketing and the morals. So the traditional goal of: “If I do this, my C.E.O. will be able to sit at the Climate Change Conference and be on a panel and celebrate”, and that’s the marketing side of the story which is probably the most powerful driver at this stage.

And then, finally, there is a moral side, which I think articulates itself in two ways: One is a straightforward moral side which is, you know, “I just want to save the planet,frankly”. The other one is the sort of indirect moral pressure. So, I had a pretty senior member of one of the European Treasuries on a panel speak the other day and he said, “You know, now all of a sudden my daughter likes my job because I work on climate change.”

So I think this kind of moral …I don’t know if it’s in a moral category, but this kind of peer pressure type of, “Oh you know I think this feels funny, I feel good about what I’m doing, this is weird…what is this about?”.  So I think this is not to be discounted, even among the  “mainstream”. So obviously, you’ve got the real moral climate warriors, but even among the mainstream this moral issue can seep in and pollute, in the best of all possible senses,  the actions of the “mainstream actors”.

09:25

CD: How do your children feel about what you do, what you work with… Yeah, maybe that becomes a very important driver moving forward.

Now one question that is a little bit on the side, but I would like to hear your thoughts on this. All the green money is going to mitigation, not to adaption. And everything seems to be linked to energy investment and infrastructure development. We’re not talking so much about benchmarks and measuring our impact on bio-diversity, for instance, or on those areas that are probably perceived as “the softer side”. What are your thoughts around this?

JT: Yeah great question. I mean it’s a tough one. So there are lots of moving pieces. I think one thing you could say is, “Ok, do you believe in a crowding-out of crowding-in theory?” Right? So you could say, “Oh you know all the attention that we’re getting on climate change for financial markets is just sort of a Trojan horse that will allow us to start exploring other areas of action – biodiversity, social issues even broader environmental challenges.” So in that case, you’re not worried about it now because we have to focus on climate change and we’ll get there pretty soon.

And the other way to think about it is that it’s a crowding-out. Which is: “All we’re doing is talking about climate change, people are listening to us and all we do is talk about climate change, and we’re missing other areas of action that we should be flagging. Frankly I’m not sure what the right answer is to that. But I do think there is more that could be done on other issues. But partly I think it’s…

CD: It’s a matter of low hanging fruits?

11:29

JT: Yeah, I think it’s sort of, “why are we not doing more on that?” Okay, the low hanging fruit is infrastructure…and we love to talk about “shifting the trillions” because it sounds so dramatic and sexy and large and big. But you know, for many sectors what it is about is R&D and developing, innovating our  way out of this mess. And that’s not trillion, usually that is millions and best case maybe a few billion. But let’s take the airplane constructor  Boeing: Their R&D budget on electric airplanes is the equivalent of one motor of one wing of an airplane. That’s their annual R&D budget. That’s how much they spend.

So there’s a few million more we could spend on that to solve these kind of issues but just not quite as sexy as a large renewable story, or even things like electric vehicles, it just seems a little bit more esoteric. And the other challenges, especially when it comes to things like biodiversity, is just the question of management, or even physical even adaptation. I mean at this stage, it looks like the real risk to financial institutions and to society as a whole will be climate change, and not the transition to a low carbon economy.

But eighty percent maybe ninety percent of the models that are being developed focus on the transition piece, and that is because that’s what we want to drive a story collectively, and it’s just more sexy. And so, whether we think there’s a crowding-in a crowding-out effect, for sure there is a certain intellectual laziness that I wouldn’t even exempt myself from around just focusing on the transition story and not the adaptation story, not the broader biodiversity piece.

CD: You know what we should do? To celebrate biodiversity and the soft side of the transition, I am going to put a bit of a nature ambience in the background for the end of this interview, so we don’t forget that we’re going to have to get to this eventually. We’re going to have to integrating all aspects of our impact at some point in our epic story of how we humans came to dominate our environment and rise as the most powerful spices on the planet. Until the bees disappeared, and yes there was no honey anymor,e but also the whole natural system crashed from there – while we were driving around in a Tesla.

Okay sorry, sometimes I get carried away…

THREE KEY FINANCIAL SECTOR SHIFTS WE NEED – TO COUNTERACT OUR FLAWED HUMAN NATURE

14:16

CD: A question to wrap up, I would like to ask you more of an opening question on measuring performance but you can expand to more generic views on the transition. According to you, what are the three keys to the shift we need to see happen in the financial sector?

JT: So, I mean, I’ll give you the facetious answer which is: once you get rid of human, you are probably in pretty good shape on this, because it just so happens that we’re just so badly produced, so incredibly bad at managing risk at thinking about the long term…at making decisions between two situations where one is a short term payoff and one is a long term pay off, that we always call for the shorter.

So if we could just rewire our evolutionary selves to think just a little bit further than “When I will have my next cookie?”, then I thin we’d be a lot better off. But now, I don’t know how realistic that is. I don’t know how excited people are going to get about exchanging our humans with robots (laughs). I mean, that’s coming anyway, and I’m not sure it’s going to be so pretty.

But I mean joking aside, I think, I guess…the first step is to say: how we will ever get anything done with our flawed selves is to lock ourselves into decision making and to find mechanisms to trick ourselves into being smarter and better and more long term. I think to create a financial market infrastructure that does that, that creates incentive to think long term, that recognizes and awards long term behaviour, and that penalises short-termism. I think that’s so much more of a market infrastructure issue because again today if we don’t get this right, we can have the best climate assessments and the best models, you know. If I walk into a room and the guy says, “Oh your model tells me in fifty years I’m going to die…”, I don’t care. And so I think that’s a fundamental sort of shift we need.

I think the other shift we need, and that’s actually happening right now, is the financial regulators. I mean, wow these financial regulators are so powerful and so influential and the voice of Mark Carney, the voice of the French regulation on mandatory disclosure, has just woken everybody up. And I know that anecdotally in France  as soon as you have regulation, you’ve got the C.E.O. and the C.I.O. involved. I mean, it’s just too important of an issue for finance institution to handle. Obviously, the day to day of that  is handled at the lower level, but it needs to run by the C.E.O. and C.I.O.’s desk.

And that’s the critical pieces, to make sure that regulation, financial regulation…and this is controversial, I mean Central Bankers and financial supervision authorities are saying, “Climate isn’t our issue”. But well what I would say is that the very least it should be sort of there should be a policy consistency. I think there’s a lot of very very good arguments  against financial policy intervention on climate issues. But none of them are about simply making sure that financial policies don’t sabotage, if that make sense. So, not sabotaging, ensuring stakeholders can make the right decisions, ensuring we have a resilient and official intermediation of capital – that’s the day job. and just making sure that climate is part of that recognition on that day job I think is a second key lever.

And you know what, I think there’s always three that you want to hear, but I’m going to stick in two.

18:17

CD: Jakob thank you so much for being with us, this was enlightening and I think we see much clearer on this issue of how the performance of investment portfolios should be measured, and what it will take to keep us on the two-degree trajectory. Congratulations for all the great resources you’re producing, and I hope to speak to you again soon.

JT: Thanks so much for having me and all the best.

CD: And before closing this chapter we wanted to hear a few other voices that had supporting comments on the subject matter. We edited those quotes as an outro with a bit of music in the background so we can meditate on all this.

This chapter about measuring was made possible by WWF. It’s thanks to their support that we could afford digging deep on those issues. I would like to give them a big thank you. We are publishing links to reports and other resources on the episode page. Our website is now at greenexchange.earth, like Planet Earth. Now to our final quotes, you will hear – in this order:

• Stephanie Chang,
  Assistant Director, Sustainability & Climate Change at PwC.
• Mike Clark, from Ario Advisory
• Karsten Löffler, who was Managing Director of Allianz Climate Solutions until last week and who is now affiliated with Frankfurt School and the UNEP Collaborating Centre for Climate & Sustainable Energy Finance.
• And finally, George Latham from WHEB, WHEB is a specialist Investor in climate solutions with great thought leadership.

So let’s have a listen. We’ll be back soon for more green knowledge inspiration and entertainment, keep up the good work in the meantime!

20:31

Stephanie Chang: We are seeing shifts towards measuring environmental and social impacts, but I think that’s not enough. And the problem with issues such as climate change, is a classic economic problem of Tragedy of the Commons. As in, a lot of public resources aren’t valued properly and the individual pursuit of self interest leads to potentially catastrophic consequences for the world. Carbon budget is what you could turn a zero-sum game, and this is why absolute benchmarks are particularly relevant when you’re talking about addressing climate change. It almost doesn’t matter that you have, you know, a hundred companies and you’re the top of that one hundred companies, if as a whole, one hundred take us towards busting the carbon budget anyway.

21:31

Mike Clark: Investors need to start thinking how their portfolios are positioned against the context of climate goals, and evolve their strategy over time so that the impact of their portfolio is more aligned with these overarching goals.

21:48

Karsten Löffler: It’s very interesting to recognise that, in the asset management industry, risk is usually measured on a relative basis, versus a benchmark – which is usually an index, a stock index, or a fixed income index. From the asset manager’s point of view, an absolute performance is not actually high on the agenda because absolute performance means that there needs to be a disconnect to capital markets. The asset owner is the institution that actually has an interest on absolute performance because of its respective liabilities. So the asset management industry, bottom line, will continue managing on a relative basis as long as asset owners do not change mandates that are handed out to the asset management industry.

The biggest challenge right now is that data is more or less lacking, or patchy, because it relies on real economy, on companies data, being published in a way that is sufficiently sophisticated and detailed, and is, at the same time, standardised and easily accessible for the asset management industry to make use of it.

23:17

George Latham: You need to move to a longer term, more broadly defined target that is more holistic, and then identify a wider range of key performance indicators, of which the benchmark performance may be one – appropriately used over an appropriate time frame, but also considering risk and also considering the other objectives from a performance perspective. And I think that is the shift that needs to happen.

The roadblocks are partly cultural, because we’ve got into this very imbedded view of how benchmarks operate, to the extent that risk has become viewed by many people as being how different you are from the benchmark. Now, risk has got nothing to do with how different you are from the benchmark, and that completely ignores the risk that is embedded within the benchmark.

We’re talking about, essentially, a much more value added contribution required by the trustees or those people acting on behalf of the beneficiaries. So it requires education, it requires investment; it requires valuing the role of the trustee. What is needed to support a transition, or a shift in mindset, is a culture where those trustees are valued and given the time and support to be able to have a more in depth view of how to operate. How to manage that longer term perspective within their mandate is complex, but it’s not impossible. I think it’s to do with setting out expectations early on and not paying lip-service to them. It’s possible to put in place, say, a [unknown] saying: “This is our expectation of you, and this should be your expectation from us. This is how we set out the way that we’d like this requirement to run”. And this is non legally binding, but is a cultural shift, if you like, that enables people to feel free and make sure everybody’s got the same level of expectation. The real objectives can them be set out clearly, as opposed to “This is our objective, but this is the benchmark”, and then the benchmark comes to define what the portfolio looks like.

——————————————

This is the fourth episode of our series about Climate & Finance. Missed the three first chapters? You may want to go there first: Episode 1 // Episode 2 // Episode 3 

You know the real problem with money – apart from never having enough? It’s that even when we don’t spend it – to buy stuff that we don’t really need – our bank, pension fund, insurance company are investing it on markets. And with our money, they finance technology and infrastructure projects that are doing harm to the Planet or to society.

This podcast series about Climate Finance was created to investigate what’s going on behind the scenes, and what needs to change. In this episode we talk to Jakob Thomä from the 2° Investing Initiative to review how can the financial sector align with the climate goals from the Paris Agreement. This episode is released in two parts.

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Linnéa Hultén
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

COMPLEMENTARY RESOURCES

Coming soon.

MADE POSSIBLE BY:
	WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature.

Thank you to our media partners:

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

THE REAL PROBLEM WITH MONEY

Camille Duran (CD): You know what’s the real problem with money – except that you never have enough? It’s that even when you don’t spend it – to buy stuff that you don’t really need.

Your bank, pension fund, insurance company is investing it on markets. And with your money, they finance technology and infrastructure projects that are doing harm to the Planet or to society. Infrastructure projects like the wall at the Mexican border.

[Donald Trump clip]: We’re going to build the wall, believe me! We’re going to build the wall!

CD: Your money, right now, may be financing some of the companies that are currently bidding for building that wall. Isn’t that crazy. Have you checked?

[Donald Trump clip]: We’re going to build a wa-

CD: -Yeah, I think we got that part.

Well, if you’re not financing the wall, chances are that your money is used for some dirty and carbon intensive business you don’t really want to know about. And most of us still don’t realise this. So… that’s why we’re here!

This podcast series about Climate Finance was created to investigate what’s going on behind the scenes, and what needs to change. We have published 3 overview episodes already. We are now starting to dig even deeper.

One year after the Paris Agreement, the colour green is on everybody’s lips and one expression is more appropriate than ever: “put your money where your mouth is”.

CLIMATE & FINANCE – WHAT GETS MEASURED GETS DONE

CD: Today we exchange with Jakob Thomä from the Two Degrees Investing initiative, 

Jakob Thomä (JT): I’ll give you the facetious answer to this, which is once you get rid of humans, you’re probably in pretty good shape on this because we’re just so bad. If we could just make ourselves rewire our evolutionary selves to think just so little bit further than “when I will have my next cookie”, then I think we’ll be a lot better off.

CD: We talk about free-riding all year around (not only during the ski season), a new kind of superheroes going by the name of “REGULATOR”, replacing humans by robots, and why the market doesn’t care about your grand children…

INTRO JINGLE

You’re listening to the Green Exchange, episode four of our series about Climate Finance: What Gets Measured Gets Done.

In episode three of the series, we touched on the need for a framework that informs policy makers and investors on how far, or how close, we are to policy targets. We started to talk about measuring. So why is measuring interesting?

All countries that have signed the Paris Agreement have committed to targets that – if everything goes well – will keep us “well below two degrees” of global warming of the climate system. Each country has its own targets, that’s the starting point. Let’s take France for instance.:The French national targets now need to translate into targets for each sector of the French economy, and this for each asset class (so, equities, bonds, cash equivalence, etc.).

When industry realises what those targets are, usually they go, “Oh sh*t! really?”. But in a perfect world, all players are going to work heart and soul to meet those targets. In a perfect world.

Now, policy makers and regulators are here to incentivise along the way based on how close or how far each sector is from the target. Basically they say: “Okay you lazy b******s, here is a bunch of subsidies so you really have no excuse for shifting your practices now, right? Thank you…”.

Long story short: that’s why measuring is such an important topic. So let’s dive in and talk about indicators, measuring strategies, absolute vs. relative performance benchmarking…it’s going to be fun, I swear.

JT: One of the key challenges that we keep returning to is the fact that probably the first generation of indicators around climate change and financial markets focused on carbon footprint and GHC emissions and so that’s really the first generation, but most of the research that we do suggests that this indicator really isn’t fit for the job.

So we’re hungry for – and both trying to, if you will – bring the food to the table on graduating from simple backward looking indicators to forward looking indicators that track investment and production and the real economic activities that ultimately determine if we meet the two degree objective or not. And then I think that we’re going in the right direction there but there’s more of where that came from, if you will.

05:34

CD: Okay so from backward looking indicators to a new generation of forward looking indicators – we’re going to get into that but let me introduce you first very quick, Jakob Thoma from the 2° Investing Initiative which  is an independent organisation. Your research is unbiased and pursued independently. Over the last few years the 2° Investing Initiative has researched developed and submitted a number of papers, tools, methodologies, models and recommendations to align the financial sector with the two degree climate goals.

I have to say, your work is incredibly important, and I’m a big fan. Thank you very much for being here.

JT: Well thanks for considering me for this series. I’m interested to be a part of this, I’m glad.

CHALLENGES IN MEASURING FOR CLIMATE CHANGE – FINANCING THE FUTURE

CD: You’re very welcome, let’s get into it. We just set the stage about why we need to start measuring correctly. Could you please elaborate on the specific challenges countries are facing within this discussion about metrics, and maybe illustrate with a specific example?

JT: Sure, so the first is of course that we’re talking here about how we measure financial markets’ alignment with two degrees. So the first challenge is, obviously, what does two degrees look like, right? What is that transition, the combination of different technologies, how do we compare renewable power, bio fuels, electric vehicles, and then even thinking about the next generation of technologies: laser technologies, autonomous vehicles…. I mean there’s really a dozens, thousands of different, of different technologies out there and how do we even… how do we even start to think about that.

The other critical challenge is that we’re always talking about the future. The past is water under the bridge, we might regret having emitted all those emissions or eaten the meat or taken that flight, but it’s done now and we have to live with the consequences. The future is for us to shape and so that’s why we’re interested in measuring what we can expect the future to hold and so that’s what we want to understand in financial markets, even more so than the real economy because at the end of the day that’s what financial markets do, is they finance the future.

CD: Yes that’s a very good point, it seems that carbon foot printing in a portfolio mainly focuses on what was emitted until today and traditionally we never talk about aligning with specific trajectories. We typically say, “Oh look this year I emitted 20% less carbon than my competitor, that’s great I’m doing good!” – but actually it doesn’t say anything on how we’re doing against the climate goals. That’s what we call relative performance benchmarking – relative to others within your class.

[ASIDE]

CD: Actually, that reminds me of when I was getting a bad grade at school. I was usually hiding behind my friend’s even worse grade – and then my Dad would tell me “ I don’t care about the neighbour, get to work before I get on your case!“. Yeah, good times…

[BACK TO INTERVIEW]

BIG DATA & CLIMATE FINANCE – WHAT OWNERSHIP ACTUALLY LOOKS LIKE

08:39

CD: Now, let’s talk about the right way to do it: Absolute performance benchmarking:  Can you please give a specific example to explain how this works?

JT: So let’s take, you know, your typical European equity portfolio manager: he’s running let’s say 100 million, maybe a little bit more, maybe a little bit less, but you know your run-of-the-mill equity portfolio invested in European companies. So, let’s say we’re trying to see, “Well, how am I doing in for renewables, right?  Am I on the right track when it comes to my renewable investments?”

So, the first intuitive thing to say is, “Okay well, you know I’ve got a European portfolio and in Europe according to the International Energy Agency, renewables are meant to be, let’s say 20% in 2020 – 20% installed capacity. So the intuitive thing to ask is, “Is that what’s happening in my portfolio?”

Now the first challenge is that, that 20% is obviously is not just companies, there’s households, there’s cooperatives that are not just companies, so we have to understand, well what would we expect in equity markets the percentage to be? And that’s likely different because household, the solar panel on your roof, is not going to show up in equity markets in terms of someone owning that, because you own that you yourself individually.

So we have to find some type of an adjustment to try to understand, well in equity markets let’s say if the economy is 20% in 2020, we’d expect equity markets to be 18% or maybe 22% right? And so then we can start to think about okay well what do I have in my portfolio, 20 to 18-22 and how does that compare to what I would expect to have for that market which I’m invested in?

10:34

CD: Right so let me repeat this for the listeners because it’s important – what you’re saying is that for instance a 20% target for renewables in Europe needs to be translated into targets for each asset class (equities, bonds, cash equivalents.). In your example of equities, your equity portfolio manager for instance needs to know exactly what target to shoot for on equity markets.

JT: Absolutely. So that’s a simple blueprint for thinking about that. Now, let’s complicate that just a tiny little bit…

[ASIDE]

CD: Hey listeners, every time things are getting a bit more complicated in the discussion we will play the “complicated” jingle so you can increase your focus for a minute.

[COMPLICATED JINGLE]

JT: So the first way to complicate that is to say, well you know it’s all good and well that you have 18% but what we really care about is the rate of change. Maybe you had 5% in… 5 years ago and now you’ve got 15%. It’s still less than 20% but wow you’ve done you know, you’ve put in a lot of effort.

So one way is to say if you had 18% five years ago and now you still have 18% is that going to be better than having 5% five years ago and now having 15%?

11:58

So this sort of, the distinction between what’s the total view of your entire stock if you will of renewable power plants that you own through your companies that you are invested in, versus, what is the rate of change, what are the investments that are actually taking place in those portfolios. And there’s two different ways to view that. Now, we’ve been working with a hundred investors or so on trying to identify that and you know, the different investors think one or the other is more important.

CD: Yeah, and I want to make sure we take this home it’s such a great point: It’s an important question – how do we value the rate of change, no defined position on this yet. Again it reminds me of school days,  there was this guy in my class, he was getting all the credit because he was continuously improving his grades, week after week, and we were like, “Of course he is, he never gave a damn about the course, he’s starting from zero and now that he’s getting to work he’s a hero!? Are you kidding me?” It felt so unfair at the time. But now that I think about it, the rate of change, the pace at which you operate your transition really matters and it  should be taken into account. It’s as always, this eternal fight of making sure  everyone is doing the maximum. But the point is, it’s still unclear how to value the rate of change in practice, in the financial sector.

JT: And if I can just add one, in another complication…

[COMPLICATED JINGLE]

18:38

JT: Now this isn’t all rocket science really, but it’s just to give you a flavour for the type of steps you have to walk through to get to the answer that you’re looking for, is that European companies are obviously invested all over the world, so actually, it’s good that you’re running a European equity portfolio. But you’re – bad news, or good news – you’re going to own power plants in United States and Latin America and Africa and Asia. Even though you’re just invested in Europe because European companies own power plants all over the world.

You can just look at your European exposure, but then ideally you say, well in Europe I have this much, but what about Asia or United States or Latin America? And so that gets you into a situation where what you really want to do is control for the geography. So look at really assess where you are in the different geographies in which you’re invested in, but also in which the companies in which you’re invested in are invested in. And in control for the asset class, so are you in equity markets? Are you in bond markets? Are you in an infrastructure? So, those are the, sort of, the two key parameters that you’ve have to, you have to control for.

Now the fascinating thing, or the great thing is that with the rise of new data collection technologies, and big data and the like, we’re able to have a much, much clearer picture about what actually what those ownerships look like. And so you really can start working with databases where you can map individual power plants all around the world to that person sitting behind the Bloomberg terminal in Frankfurt or London or Stockholm, managing those portfolios.

And that’s really incredibly powerful in assessing forward-looking asset class specific and technology specific climate performance of portfolios.

CD: Interesting… This is very encouraging, watch out people sitting behind the terminal, we can see you! We can see what you’re doing.

Ok, this is the end of part one – we’re going to take a break, in next episode we’ll jump right in and continue with Jakob and other guests that were kind enough to join this discussion about Absolute vs. Relative performance benchmarking, and measuring in general.

This episode – and the next one – are made possible by WWF, it’s thanks to their support that we can afford spending time on those very important issues, please check out their resources on the subject matter, we’ll put the links on the episode page.

And I’ll catch you soon for part two!

END

In this quick fire episode we introduce a new format called “Mixtapes”.

Hi there, Camille here,

It’s been one year now that we are at full speed with The Green Exchange podcast. I wanted to leave a short message for a quick update. This is not a formal podcast episode. Just a rant to say… well – mainly thank you. We are so pleased with the traction we’ve gained this year – across Nordic Countries in particular. It’s going fast. We are ranking higher and higher in iTunes and other podcast apps. And we are now entering new European countries. That’s why we called this episode Europe. Our ambition is continental I guess at this point. In fact, any one in Europe who is a sustainability professional or enthusiast – and speaks a little bit of English IS a potential listener of The Green Exchange. Change agents are everywhere. Inspiring stories are all around.

• Most local governments in Europe have a lot in common, because they are the ones who are really in charge of implementing the UN Sustainable Development Goals. All Mayors and their teams should feel part of the family.
• Private sector – whether you work in an SME or large energy utility for instance – knowledge and inspiration doesn’t come from your country only. The playground is international.
• Same for academics. Research & Innovation is framed at the European level most of the time.
• And as environmentalists, activists, or simply visionary individuals with good energy to offer to their community, there’s no reason to limit the boundaries either.
• Whoever you are, if you’re here, it’s because there is probably something for youJ. I know we even have listeners in California or in Australia, who are interested in what’s going on in Europe.

Long story short. We are now starting to roll out The Green Exchange to new countries across Europe, and we are excited. And hungry, we want to do more.

We’re also wrapping up our LIVE talk show concept that we are going to start taking on the road but I will tell you more about this in another special message when we’re ready to announce it. Make sure you have The Green Exchange in your radar on Twitter, Facebook or Instagram. Also maybe now is a good moment to say hello and let us know what you’re up to! hello@greenexchange.se

We answer all emails!

Ah yea… also, Happy new year… health success etc.

Remember to always challenge yourself, challenge what you hear, especially if it’s going to lead to policy or investment decisions. Always better to think long-term.

I’ll see you very soon for more green knowledge, inspiration and entertainment, keep up the good work, in the meantime.

——————————————

The forestry sector is facing multiple challenges all over the globe. In Europe, the declining demand for printing paper and the growing global competition among producers threaten the sector. Wood is also used to produce heat, and today, a large number of environmentalists and experts oppose this carbon intensive activity, pointing to more long-term solutions instead. Forestry needs to figure out new products that can be made out of cellulosic fibres, like textiles for instance! What does the process of making wood fibre look like, and is it sustainable? What will it take for the forestry sector to show a promising future? This episode features views from Dagfinn Hoybråten (Secretary General of the Nordic Council of Ministers), Sven-Erik Bucht (Swedish Minister of Rural Affairs), Tobias Köhnke (Cellutex), and Sigrid Barnekow (MISTRA Future Fashion).

Special thanks to Audrey Hammer.

Check out the Bioeconomy & Sustainable Fashion series page for complementary resources & bonus materials.

Made possible by:
	The Nordic Council of Ministers is the official inter-governmental body for co-operation in the Nordic Region. Representatives of the Nordic governments meet at the Council of Ministers to draft Nordic conventions, etc.

Produced by Camille Duran
Co-hosted by Joshua Burguete Kirkman
Coordinated by Han Nguyen
Published by Linnéa Hultén
Transcribed by Tuly Sarah Costa
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

Music Credits: License by Ins. Green White Space.

TRANSCRIPT FROM THE EPISODE

Camille Duran (CD): I love cutting wood, I don’t know why! I should talk to my therapist about it. In the meantime, we’re going to talk about forestry, opportunities and challenges for the bio-economy, and more specifically in relation to sustainable fashion. Welcome.

If you celebrate Christmas, there is one tree you are probably just cut at this time of the year. Now, I have one question for you: once Christmas is over, what are you going to do with that tree? Maybe you’d like to turn it into a wood fibre shirt? How cool is that?

Think about it, it’s a perfect activity to do with the kids on the weekend, especially if they like playing with heavy chemicals and solvents. Sounds interesting? Here is how to make wood fibre with Audrey Hammer:

01:13

Audrey Hammer (AH): First, turn your tree into cellulosic fibre – that’s what we do when we want to make paper. We have a video on the episode page that will show you how it’s generally done.

The problem you are facing now is that the fibres you just made are only a few millimetres long. Hard to make a tee shirt out of this! Cotton for instance is much easier to turn into yarn because it is around four centimetres long already. But with paper fibres, you need an extra step.

By the way, you should really get the cat off the table!

We’re going to use a technique called solution spinning. Okay kids?

CHILDREN’S VOICES: Yay!

AH: Put the fibres into this liquid…it’s a [coughs loudly]…solvent. This will dissolve your fibres into a viscous substance.

What’s the next step? Extruding your substance into another liquid but with this new liquid, your cellulose is not soluble. Magic! Magic! Your substance is going to coagulate into fibres.

Now you just need to wash them, dry them, and cut them. You finally obtain your 40 millimetre long fibres. Voila! [Coughs loudly again].

CD: Hey sweetie, are you okay? Alright drink some water you’ll feel better soon.

Okay, I guess you got the message: the process used until today is not quite environmentally friendly. Everyone agrees, it’s no secret. Should we give up? Absolutely not! There is promising research under way.

In a world where cotton production is reaching its limit, in a world where the demand for fibres is going to keep increasing as population grows, we really need to figure this out. Can sustainable forestry practices support the textile sector, and if yes, how?

[MUSIC]

03:23

CD: You are listening to The Green Exchange, episode two, of our series about Bio-economy & Sustainable Fashion, From Wood Fire to Wood fibres: A More Sustainable Future for Forestry?

BURNING BIOMASS – FORESTRY TODAY & FINDING A HIGHER VALUE FOR WOOD

03:38

CD: First, what does all this have to do with fire? Well, besides providing wood pulp to the paper industry, biomass is typically interesting for producing heat.  And at least in northern Europe, it’s a hot topic on the agenda.

We are hoping to dig deeper in an upcoming series of The Green Exchange, but for now it’s enough to say that:

One: Burning biomass is currently considered as ‘slow renewable’ energy – since it takes at least eighty to a hundred years for the resource – wood – to be replenished. This means it qualifies for tax credits, subsidies and incentives in many countries. And many environmentalists and experts don’t like this, and they are probably right…

Two: Because today, we know how to get hot water from greener sources than waste and biomass… we’ll talk about it.

And three: The value we could create from each tonne of wood harvested could be much, much, much higher than the value of wood as a fuel, if we turn it into fibres, for instance.
It’s exactly the same thinking as in episode one, where we talked about turning waste fish skin into leather as a much higher value alternative than producing fish meal.

So… moving from wood fire to wood fibres:

• Question 1: Can we create much higher value for each tonne of wood we have on our hands?
• Question 2: Can we do this in a way that significantly reduces the amount of carbon we put into the atmosphere in comparison to burning biomass?
• Question 3: Can we use fibre production processes that are truly respectful of the environment? I don’t like this whole idea of dumping chemicals everywhere, do you?
• Question 4: Can those fibres last, can they be re-used and recycled so we enter a closed loop system?

In short: Can we say our forestry sector has greener days ahead? And if not green, what colour should our forests be?

[MUSIC]

CD: On the textile front now: well, you’ve probably heard the story. The global textile production is expected to increase threefold to reach 240 million yearly tonnes by 2050. At the same time, the world production of cotton is considered to have reached to its limit and is starting to seriously compete with food production. The cotton production is also associated with water scarcity, high use of fertilizer and hazardous pesticides, loss of habitat and soil degradation.

06:30

Long story short, additional sources of textile fibres are needed to face the emerging environmental issues related to climate change, water management and food security.

So again my friends. Please, please, please – this series about Bio economy & Sustainable Fashion is important! Let’s share it far and wide, because we need to make some noise about those issues. Talk about cotton and wood fibres next time you’re having dinner with friends, or at the Christmas dinner!

[CHRISMAS SCENE]

CHILD: Mommy, Mommy, Mommy, can we open the presents?

MOTHER: Not yet, sweetie, first we need to talk about cellulosic fibre with uncle Jim!

[END SCENE]

CD: Alright let’s start digging – first let’s take a look at where our forests spread in Europe. We have my colleague Josh on the line. Hi Josh.

07:27

Joshua Burquete Kirkman (JBK): Hi Camille, good to be here mate!

CD: Good to have you. Um, we discussed sending you on a space shuttle to take a couple of pictures and see exactly where most forests are…but I understand, we were a bit tight in terms of budget?

JBK: Yeah, look…I mean, I though space travel got a lot cheaper since Elon Musk and Spacex started launching rockets daily into the stratosphere, but… Look, spoke to Elon and he really couldn’t come up with a good deal for us on this one. And I spoke to the guys at NASA and they’re all out of money themselves, so… Yeah, I had to find other solutions here.

CD: Hm, that was unexpected. What was the plan B?

JBK: Yeah so I thought I would go on Google maps instead and, well it’s not as fancy but ….

CD: Alright, let’s do with what we have. So tell me…

JBK: Well basically, most forest density is in the North as you can imagine, we put a map in the complementary resources section, for everyone who wants to check it out for themselves. In Finland, 72% of the land area is covered by forest. Sweden is at about 58%. Then around the alps you can see some serious density, Austria, France, Germany and central Europe is also doing okay.

CD: So it is a very significant industry. I guess that gives us a good idea of where the potential is for cellulosic fibre production.

JBK: Yeah, the action is really happening in Sweden, Finland, Norway, and Austria in fact.

And look, seven out of the ten biggest European paper companies are in those four countries. The largest pulp producers are Finland and Sweden with around 12 megatons (MT) per year. Actually, each produce double amount of wood pulp for paper than what Russia produces. This is UN data. And Sweden and Finland combined produce more than China.

Now here is the thing: transportation has become so cheap that it’s quite easy to get materials processed for a much lower cost in another country, and you get an end product back in another form.

CD:  I see where you’re going with this. So, if there was a process that you need to run as part of your operations, a process that is chemical intensive and very expensive to control in Europe – where you actually need to treat the chemicals and do things properly…

JBK: Oh yeah, I’d do it in China, and I’d bring my product back to Europe afterwards.

CD: Smart, Josh, smart…. [Awkward pause].

Hey listeners! Sounds familiar? Yeah, that’s what is happening with viscose production today. Let’s talk about alternatives to this crazy practice. Thanks for passing by Josh, I hope we can send you into space very soon.

JBK: Ciao!

INNOVATION, CREATING BUSINESS OPPORTUNITIES & THE QUEST FOR NEW SOLVENTS

10:47

CD: Before we keep going with our investigation, I would like to thank the Nordic Council of Ministers for helping make this episode possible. They are the official body for Nordic intergovernmental co-operation and are of course quite active on the issues we are discussing in this series. I had the chance to host a discussion with their General Secretary, Dagfinn Hoybråten, as well as with the Swedish Minister of Rural Affairs, Sven-Erich Bucht. And of course, we talked about the future of forestry, bio materials and sustainable fashion.

Here are a couple of highlights from their comments, introducing the debate:

Dagfinn Hoybråten (DH): So I think what we’re focusing much on in the Nordic region is lobbying for better EU regulations on harmful chemicals – it’s high on environmental agenda in Nordic countries – and calling for supplier requirements on the supplier’s side for sustainable textiles. This together is actually creating opportunities for innovation and later on commercial developments.

[FAST FORWARD SOUND]

DH: I think there’s one aspect of the crossroads of the public and private sectors, and the research sector, that it is often over looked in the public debate.

CD: Right.

DH: And that really affects the regulation that can have on creating business opportunities, and together with innovation there’s actually a huge market when regulators move in and decide some standards, or regulate some demands, or even prohibit some materials.

—

12:37

Sven-Eric-Bucht (SEB): We have our tradition of world-leading & Innovation and we have a lot of trees…a lot of trees.

[FAST FORWARD SOUND]

SEB: The old product of viscose was not green or sustainable, but new developments look very promising.

CD: This is where we should stop for a few minutes because those new developments could unleash the whole sector. Let’s talk about this.

The polluting methods we described earlier are a hundred years old. The solvents are rare, and obviously the processes we have been using in this industry are not environmentally sound, most of it is done in Asia. But more recently, research & innovation efforts have started to look at new solvents for cellulose and viable alternatives for industry.

Conclusive? Well, not yet but rather encouraging it seems.

13:38

Tobias Köhnke (TK): The research into solvents has really exploded in the last ten years.

CD: This is Tobias Köhnke from Cellutex – an advocacy platform which is basically trying to promote and ensure the production of cellulose-based textiles in Europe. Also participating in our live talk show in Stockholm in November.

TK: And we have to take care of that fundamental research and lift it up to applied research as well to develop new processes and for that we need test facilities, test beds, and so on – which we don’t really have.

CD: So, more fundamental research primarily, more applied research, more testing. And of course this implies, more innovation money.

If you want to know more about what specific activities need support, we are publishing a few links on the episode page that will give you the full picture. Just connect to our website greenexchange.se, click on the series Bio-economy & Sustainable Fashion and hopefully our resources section will make you happy.

KEEPING THINGS CIRCULAR – DESIGNING FOR LONGEVITY & LIFE CYCLE ASSESSMENTS

14:48

One more thing on research…

Sigrid Barnekow (SB): We’re looking at fibers which is really important, but we need to look at it throughout Life Cycle Assessments.

CD: This point was made by Sigrid Barnekow, who is the Director at the Swedish Research Program “Mistra Future Fashion”.

SB: When analyzing new fibres for instance, you need to assess how it will work in the production, and how it will work when you use it, and then recycle it. So at the first glance it can look really good, right? But then if you look at the facts throughout the whole life cycle it can be a totally different story.

[MUSIC]

SB: And today we lack that type of data. We don’t have sufficient data on the existing fibres either because we have done some assumptions in the assessment some years ago that still hang around.  So we need to advance and progress when it comes to having scientific data that proves that this is sustainable, the fibre is sustainable, the process is sustainable and so on.

CD: And yes you remember, we’ve talked about this earlier in the series in the first episode of this series when discussing the potential of fish leather.

16:04

This brings us to our last point for today:

Let’s say we wake up in a few years and we can put cellulosic fibres on the market in a sustainable way – we found the magic recipe for a solvent. A solvent that is so clean you could even drink it.

Do we solve everything with this new solvent? Well actually, we would probably dissolve everything with a solvent… What I mean is, is everything solved…but not with the solvent itself…yeah. Do we dissolve the situation? Ahhhhhh…

[ROBOT VOICE]: Have we solved the situation.

CD: Have we solved the situation! That’s it, thank you! Well, let me ask this: what happens to those fibres once they are on the market?

16:53

SB: We need to also look at the rest of the lifecycle. We need to look at the production, we need to look at how we use our clothes, how to prolong our clothes, the lifetime of our clothes.

CD: Lifetime, let’s focus on this shall we? Like cotton, cellulosic fibres are very difficult to recycle. Actually, if you want to sound smart at the next meeting or coffee break, you can say something like: “Well, you know fibres in general make it hard to close the loop right? Because they degrade”.

Ok so how do we solve this? how do we solve the degradation issue? Personally, I see only 3 solutions.

[VOICE CLIP: All revolutions are impossible until they happen. Then they become inevitable.]

• Either we make them so environment friendly that we can compost them. Yes, composting it, so we can return this carbon to the soil – that’s closing the loop. Now, we are already struggling to put systems in place so we can properly compost our food and create ‘clean’ closed loops. But why not…sell it to me.
• Second solution, well recycling them, I guess. We can turn those fibres into another type of material to supply another sector, as long as we are not creating another problem, or transferring the problem to another sector.
• Third solution, if you make those fibbers really tasty and clean for the human body, well, we could…eat it. You think I’m kidding? Well…I guess we’ll find out

CD: Regardless, one fundamental idea here is that we need to paint on the wall of all the manufacturers in the world: design for longevity. That’s the best thing we can do right now to limit the impact of this industry, and the impact of our fancy life styles that, of course, we don’t want to sacrifice.

And we need to make brands feel guilty of not designing products for longevity. Brands, this song is for you:

[Guilty, by Marina & the Diamonds] “Guilty on the run, and I know what I’ve done / Guilty on the run, and I’m never forgiven”

19:17

CD: It goes against the model they have built their business on until today, which is basically making cheap stuff in Asia that will break down or degrade. Shame on you brands! And shame on us for buying it!

If we keep the same design philosophy as today and keep stimulating the same consumption patterns, you can make any kind of sustainable fibre mainstream, it will not solve it… It’s just one part of the equation.

Now, the good news is: when you start designing for longevity at the same time as you are shifting your business model – moving towards ‘product as a service’, for instance – well then you can actually see strong economic incentives and more growth potential. And you know what? We’re going to look at how this specifically applies to the textile sector in our Circular Economy series, and we will tell all the secrets.

The best way to stay posted on this is to click the ‘Subscribe’ button on your podcast app.

It’s time to close this episode, we’re not done talking about this, but the insights we shared today are fundamental to steer development efforts into the right direction. At the end of our live talk show last month in Stockholm, we concluded on the need to strengthen collaboration between the forestry and fashion sectors. Everyone seemed to agree. We could also feel that everyone was enthusiastic and optimistic in the closing remarks. Here for instance was Dagfinn Hoybråten, Secretary General of the Nordic Council of Ministers:

DH: We can come together: the research, the innovation part, the business, the people, and the public sector. I think we can really become strong. I am hopeful. I think the potential is there, and there are so many good forces that can work together to make this happen.

21:24

CD: So, from wood fire to wood fibres – are we there yet? Not really, but it’s definitely a hot topic with encouraging perspectives, and we will keep you posted of course.

Let us know your questions: info@greenexchange.se. Or on Facebook, or on Twitter, or send a pigeon or something.

We wish you a Merry Christmas – or whatever you are celebrating – quality time with family and friends, and please, don’t forget to compost your Christmas tree and make sure it doesn’t end up in an incinerator – it matters.

Back soon with more green knowledge, inspiration, and entertainment. Keep up the good work, in the meantime.

END

When preparing the series earlier this year, we talked to Bas de Leeuw, Managing Director of the World Resources Forum, to discuss the way cities approach Circular Economy, and review key steps they need to take to set the stage for success. We publish here the interview in full so you can enjoy some bonus content on themes we already touched on. The episode touches on economics, innovation, decoupling growth from resources use, taxation, the role of government, and last but not least… adopting a positive attitude.

Check out the Circular Economy series page for complementary resources & bonus materials.

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Linnéa Hultén
Senior Editors Eleen Murphy & Joshua Burguete Kirkman
Transcribed by An Ha

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

CAMILLE DURAN (CD): One quick note before we start: The other day I was having a coffee with a friend who is a heavy podcast listener – like I am – and she made me realize how most podcasts out there always feel the same, sound the same, from one episode to the other. Even the best rated, the most famous podcasts in the world follow the same format always. Same kind of music, same tone. You already know what it’s going to sound like when you press play. Just the content will be different. I talked with the team about this and we agreed that we should challenge ourselves on this. Try to make each episode feel different, sound different.

From a one-to-one interview episode in a crazy location to a deep story narrated over inspiring music or a debate roundtable from a live event, we should be able to surprise you. At least, we’ll try, hard.
Alright, onto the show.

INTRODUCTION

01:24
CD: Today is different. It’s a bonus episode. Why a bonus?
Well, in preparing this series about Circular Economy – which is not over. We had a very productive discussion with Baas de Leeuw, who is Managing Director of the World Resources Forum.
You heard him a few seconds in episode 4 of the series, briefly setting the stage for our interview with EU Vice President Jirky Katainen, and that was before I entered the tattoo shop.

There was more we wanted to share from this broad exchange with Mr. Bas De Leeuw. In this interview, we touched on different topics including economics, innovation, decoupling growth from resources use, taxation, the role of governments and last but not least… the positive attitude, baby.
You’re listening to The Green Exchange, episode one-two-three-four, five! of our series about Circular Economy in Practice: Making Room for Creativity & Entrepreneurship in Our Cities.

ACCELLERATING THE CIRCULAR ECONOMY – BUSINESSES NEED TO INNOVATE TO STAY IN THE GAME

02:50
BAS DE LEEUW (BDL): Hello, Bas De Leeuw

CD: Hello Bas. It is Camille. How are you?

BDL: Hi Camille, I’m fine.

CD: If you’re ready we can jump right in, starting with a short introduction maybe? Just so the audience can get a sense for who you are and what the World Resources Forum focuses on.

BDL: Okay. My name is Bas De Leeuw. I’m Dutch national, working in Switzerland. I am the Managing Director of the World Resources Forum, which is a multi stakeholder platform advancing resource productivity worldwide. We work on resource efficiency, we work on green economy, circular economy, everything actually that businesses, governments and NGOs are working on together to make this world a bit better place.

CD: And by training, are you an economist?

BDL: Yea, I am an economist. That’s right.

CD: It’s a real pleasure to have you, I have a few questions for you as you can imagine, and you know we are trying to get practical in this series so the focus is very much on activating or accelerating a transition towards circular economy.

I don’t think we need to discuss the big picture anymore. Anyone with good common sense will agree that if we consume less resources, build products that last longer and reorganize our infrastructure and business models, we’ll probably be in better shape as an economy. We’ll probably be happier as human beings and most importantly we’ll be able to look our children and grand children in the eyes. You see what I mean?

BDL: Yea, sure.

CD: I am wondering how do you approach this idea of transition at the Word Resources Forum?

BDL: Well actually the word transition is already sort of like difficult work, sort of like giving the impression that something very special is going to happen and we need to be ready for it and that it will be a long period of people and companies that are not getting it and will not do it. I mean resource efficiency, circular economy is adapting to the resource constraints in the world which your economy, which something happens everyday.
Of course, when you live in a dynamic world, in a competitive world, as soon as you start to do something better, then there are businesses, actors, that do it quicker than any others. They see it quicker than the others. Some of them will keep sitting on the fence. That’s normal. That’s economy. You have winners and you have losers.

5:28
CD: Right. And I really feel, like, in many sectors, the cake they need to share is about to become much smaller. In terms of volume of sales, for instance, as we discussed with Vice President Katainen earlier in the series, designing for longevity, reuse and repair, the sharing economy and product as a service are trends that are threatening the high margins global companies that dominate the market today. Those companies have built empires on the throw-away society, global supply chains and cheap production.
Now that the game is changing, they need to adapt faster than everyone else because we, the people, are very keen on going with market ‘disrupters’ once they present attractive options to us. And if you look at all those sharing economy apps that are putting everyone off balance, well, they help us spend less, they help us spend better; and in addition to this, it has a positive environmental impact. So, I hope the big players see the storm coming or there could be some change on the job market soon.

BDL: Of course, if governments would do their jobs properly, something that is being advocated for decades, and start to make sure that labor becomes less expensive and material becomes more expensive then obviously the business case for circle economy is even bigger.

CD: Yeah, you’re probably referring to the ExTax discussion, we talked about it on the show last year and it is an ongoing discussion. What’s the latest progress? Can we hope for a different taxation system? Really?

BDL: The hope is that I think already two or three decades with economists that there will be a proper system worldwide, where the external costs of resources are being incorporated in the product prices.
Well, when I say worldwide that already indicates that it is a complex issue. You cannot do it as a country you cannot do it as a region alone, not even the big and wealthy region as Europe. Europe also has to pay attention to what their competitors are doing. So it is a long-term process. Some people get very frustrated and disappointed by the lack of progress. Of course, things could be done quicker than we see now, but you can also look at what is going on already and when you look in the Circular Economy Package from the E.U. then there are a couple of very promising measures activities proposed that at least go into the right direction.

CD: Yes, I agree. So, you mentioned the need for companies to innovate and shift as soon as possible to stay in the game. And I want to talk about this because if you ask me, there is a bit too much blah-blah-blah going on. And all big brands are at the circular economy conferences and innovation programs, giving great speeches, telling us about their great visions. But in practice, everyone knows that things could go much faster. I know that change takes time but I’m sure you noticed that when change is about bigger short term margins, it usually happens much faster than when it’s about starting to design for longevity for instance.

BDL: Industry- the business sector is of course very diverse not only big and small but also in the way they would like to respond to consumer markets and to their target groups.
There are many companies, particularly big companies, that want to be seen as pioneering, as leading society, partly because of corporate social responsibility arguments or branding arguments, and that’s of course good. But I think it would be unrealistic to expect that if there is no business case for really drastically investing in the circular economy, that all companies in the world that they would start to do that. So then once more you need to have the supports from governments taxes and subsidies. Also, to small and medium sized enterprises cannot be expected of course to invest in, let’s say, secondary materials when they know that they can get raw materials for half of the price.

FINANCING THE GREEN ECONOMY: GOVERNMENT ROLE AND THE CHALLENGE OF MARKET DISRUPTORS

9:58
CD: So, in terms of financing this transition or financing the shift, it needs to be facilitated by government and by subsidies, Right?

BDL: Absolutely, absolutely. And of course, there, I mean, the low hanging fruits where the business case is very obvious of course there is no support needed and businesses are already taking a good action. But there were the fruits are hanging a bit higher, you need to influence those framework conditions as a global governance.

CD: Right and one issue here facing the governments that want to set police targets is the lack of indicators and benchmarks, and I think that this is something that was mentioned in Davos last year.
How do we measure? How do we create those benchmarks also to steer investment decisions? What is the latest progress on that front and some of the thoughts you have on this?

BDL: The Circular Economy Strategy from the European Commission has a couple of interesting and challenging activities comprised. The key for having and agreeing on good indicators is, first of all, sort of a consensus among scientists, right?
Now the difficulty with scientists, and of course also the great thing about scientists, is that they tend to not agree on many things.

CD: A bit like economists.

BDL: [Laughs] Yes, they come from different schools and it is sometimes a bit difficult to have them agree on at least a couple of core indicators, the core approaches on the top of methodologies that could help business leaders and government leaders in this important issue. So, I mean, to have scientist researchers to talk each other that is important. That is one of the more important contributions to this world. As the World Resource Forum we are an independent platform and we are happy to offer that platform to all kinds of schools.
Then of course if some consensus is emerging, that needs to be very short and quick feedback between policy makers and researchers. Sometimes you can have great indicators, but if you cannot use them or if you cannot collect the data that you would need to fill them; it’s a wonderful academic exercise, but it will not change the world.
We are not yet there. There are many very promising initiatives. And I have good hope that in coming years that we will see some good progress, in particular of course because it is a big push for the whole circular economy concept, not only Europe but also in other parts of the world. And that trickles down in major research programs like H2020.
So, I mean experience has shown that once a topic is receiving good political attention, then the other actors in society follow the instruments, the tools, that are needed to achieve the goals.

13:14
CD: Interesting. One last question regarding the role of governments, because there are concerns regarding the market disruptions such as the sharing economy which as you know can be a very strong disruptive force. There is one concern that local governments cannot follow the pace of innovation in terms of regulating or permitting when those disruptive forces are coming to town. How are you thinking there? What are some of the practical actions that local government can take to make sure they don’t end up in a situation where a company like Uber is coming to town, creating chaos in the established system and sucking all the capital.

BDL: Well yeah. I mean of course the circular economy or the resource efficiency or the environment is one of the very important aspects in our society, but I say one that is not the overriding thing. In terms of that when an actor is doing something that is more resource efficient that we all need to support it regardless of the other factors.
I mean, of course security is an issue. Of course, labor is an issue. Safety is an issue. So new services are popping up as we speak in particular also helped by the wonderful progress of the ICT sector. There are a lot of possibilities in terms of bringing demand and supply to meet each other, but like all new services or new products, they have to be tested, it has to be analyzed and also here the government has to put in place modern regulation which fits all those in to all those new initiatives now being taken. Most of the regulations, obviously, date back from completely different world and lawmakers also need to innovate.

CD: If you had a room full of mayors and city staff and you were providing them with key recommendations on what they can do today – beyond the increasing recycling rate and all the business-as-usual incremental innovation – what would be some important moves they can start working on?

BDL: What you’re saying if you had a room full of majors and city officials, and we have full of them in our conferences! My golden advice for when you want to run a city app for circular economy and the resource efficiency is to create space for creativity and entrepreneurship so that new inventions can be put to your city, but not blankly. So make sure that you analyze what’s going on, what are the side effects, what are the impacts on your inhabitants. But be open for the circular economy and also appreciate the fact that it is a new concept under this name. It is not going back to the Middle Ages. Sharing, let’s say twenty, thirty, forty years ago almost meant a step back. If you are rich, you won’t share. Throwing away is a wealthy lifestyle. Nowadays, not just because of the changing attitudes in general but also because of the ICT and the new products and services design – sharing resources is cool and can be modern and can show that you are a wonderful city that cares, not only for its people but also for the surroundings and nature.
So, a positive attitude towards the circular economy and just know that you are not on your own and it you can always get help and advice from others in the world.

CD: Yea, this is a really, really good advice. Actually, we should put on some music in background. Ready? Here we go…    Creating space for innovation to happen.

To finish, can you tell us what’s next on your front? What is the focus for the coming year?

BDL: I don’t know if your listeners know it, but we are at a very, very first phase of planning a huge event in Helsinki, June 5 to 6th, 2017, and guess what it is called?

CD: Say, the world goes circular?

BDL: Well almost, it’s The World Circular Economy Forum, we hope for more than one thousand participants. It’s organized as part of the celebration of the fact that Finland celebrates its one-hundredth birthday the organizer together with the SITRA, a Finnish Innovation Fund with UNEP – United Nations Environment Program and Nordic Council of Ministers. And that event will showcase circular economy best practices from all around the world. It will have a political session where we try to get the latest on not only what European Commission is proposing and is doing, but also all the other governments beyond Europe. So, when you ask me what is next, it is shaping a good and inspiring agenda for that event next year in June.

CD: Okay, can we come and produce a live talk show from there?

BDL: Absolutely.

CD: I have you on record on this! [Laughs]

BDL: Right [laughs]. You’re welcome.

CD: Thank you very much for your time and congrats on the progress to date and we’ll be following, of course. And yeah, I feel we’ve advanced the discussion a little bit here.

BDL: Thank you so much Camille.

CD: All right I’ll speak to you soon.

BDL: Bye.

END

This episode launches a new series dedicated to a growing trend that definitely deserves some attention: Producing textiles from bio-materials. The theme raises a lot of questions and as we are investigating the sector in-depth at the moment, we thought we would share our findings! We start with reviewing the potential of fish leather, its potential impact and discuss the implications we should anticipate when trying to make it mainstream. This episode features views from Halldora Eydis (Fashion Designer, Iceland) & Geir Oddsson (Senior Advisor at the Nordic Council of Ministers).

Check out the Bioeconomy & Sustainable Fashion series page for complementary resources & bonus materials.

Made possible by:

With support from our content & media partners:

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Gabriela Lemos Borba
Senior Editors Eleen Murphy & Joshua Burguete Kirkman
Transcribed by Oanh Nguyen

Music Credits: License by Ins. Green White Space.
Photo by atlanticleather

TRANSCRIPT FROM THE EPISODE

CAMILLE DURAN (CD): Today we start a new series!

Yes I know, we are still to complete our Circular Economy series, and our Bio-waste & Agriculture series, but it’s in the works don’t worry.

It’s just that it takes time for a discussion to wrap-up, and until we can move the right politicians and experts to truly advance the discussion, well… we may as well get started on new themes where things are happening – right now.

So – Get used to it, and if you really think about it, that’s exactly how you operate when you’re watching: One episode of Game of Thrones, and while waiting for the next season to be released, you watch Homeland, House of Cards, and then back to Game of Thrones.

We don’t have dragons on the Green Exchange yet. But here again, we’re working on it.

Everyone has heard of Sustainable Fashion.

I agree, Asian children are very skilled at making our sneakers in underground factories, but that’s not really the story we like to tell ourselves when shopping, right?

It’s like the car we drive, we have millions of excuses on why it’s OK.

Of course, what do you want? You want me to truly care? Really? Nah.

OK – So now sustainable fashion is the new buzzword and all the big brands have decided to do the right thing, clean up their mess and be 100% transparent about their practices. Great…

VOICE: Verbal irony is when someone says something and means the exact opposite of what they’re saying.

CD: …And since everything is about to be solved – we may as well talk about it.

All joking aside, there are people that are truly pushing the boundaries towards ‘more’ sustainable fashion. In this new series, we are going to study how bio-materials can be used in fashion. I’ll explain in a minute.

If you’re also interested in the bigger picture, and how Circular Economy applies to the textile industry in general, we are covering this in our Circular Economy series, soon.

So one more time, here it’s going to be about bio-materials – meaning:

“When will my jacket be made of pineapple leather?”

“What if my shoes were made of fish skin?”

“Can I eat my T – shirt?”

Those kinds of questions.

And it’s very serious because there are a lot of efforts geared towards activating what we call the ‘Bio-economy’. And this combined to the sustainable fashion trends is creating strong momentum, strong ambition, in Nordic countries and beyond.

Still, a lot of questions need to be answered. And that’s why we’re here.

OK.

EPISODE INTRODUCTION: FISH LEATHER FASHION

03:17

CD: You’re listening to The Green Exchange, Episode 1 of our series on Bio-economy and Sustainable Fashion – What is the real potential of fish leather?

Yep, fish leather.

I know what you’re thinking: “Does it smell?”

Hmm, we’ll answer that later.

One fact that I would like to start with: The global demand for leathers is rising fast, very fast. More and more people have money so more and more people want to eat meat – and more and more people want leather.

And a far majority of leathers is made of cattle, and the environmental impact is quite bad.

Well, to start with, producing clothing is usually a nasty business.

Now when it comes to cow leather, we were looking for amount of C02 emissions per square meter produced and it’s quite difficult. The measurement methods are not harmonized and Life Cycle Analysis in the cattle industry is still very controversial. Everyone agrees to say that it’s a major driver of carbon emissions; the discussion is around how much exactly.

Now you add the water and energy intensity of leather tanning (the process of making leather), and you will never look at your shoes the same way ever again. Ever.

05:11

Also, we found out that cow leather is not always a by-product of the meat industry. We are featuring a few resources on this on the episode page.

—

Now, what if we were making leathers from other materials?

Some have very interesting properties like kangaroo leather – very solid and very flexible at same time, lamb and deer skins are very soft, I also like snake and crocodile. They are very exotic.

VOICE: It’s a joke! When you give me that look, it’s a joke!

CD: Well, without getting into controversy, I think this is a real discussion. When is it OK to turn animal into leather, for which species is it OK and for which is it not?

Well, maybe we’ll host the debate on this someday. For now we are going to focus on one type of leather where it seems to be quite OK, and maybe even sustainable.

Fish.

I know what you’re thinking. It’s not possible because it’s fragile and it smells.

Sure, stay tuned, we’re just starting to talk about this.

SHORT INTERLUDE:  HOW DO YOU LISTEN TO THE GREEN EXCHANGE PODCAST?

06:35

“Hello, my name is Philissa Williams and I am a Fashion Designer and nameless consultant. The name of my company is Thembe Fashions. I make and designing everything. And I listen to The Green Exchange while I’m making my creative pieces for artists and creative people”.

WHAT IS THE REAL POTENTIAL OF FISH LEATHER?

CD: The fish industry is not glamour. You know that.

50% of the fish is considered to be food, and 50% of the fish is considered to be waste.

We process 80 billion kilos of fish every year, which means we produce 40 billion kgs of waste per year. This is serious. It’s a real problem.

Now, 30% of fish waste is turned into fish meal – animal feed. But 28 MT are still dumped every year, mostly at sea…

And, that is a real issue in Europe and in the Nordics in particular.

We’ve talked about this in our last LIVE talk show. It was in Sweden, hosted in partnership with the Nordic Council of Ministers and Malmö Cleantech City. It was fun!

We brought together people from different sectors, fashion designers, fishermen, investors, public sector, and a bunch of sustainability enthusiasts.

And we started a discussion: What is the real potential of fish leather?

A few interesting points were brought to the table.

First of all, we know how to make it. There are a number of tanneries that have been working on perfecting the process now and a growing number of designers are getting in the game. It is made from waste, in other words, we don’t go and hunt fish for its skin.
All the largest luxury brands have experimented with it and it is a very attractive material. It does not smell.

08:49

HALLDORA EYDIS (HE): I love working with fish skin. It is my favourite material to work with, and people love it.

CD: This is Halldora Eydis, an Icelandic designer that is working with this material.

HE: Also it looks amazing. I have a lot of people coming to our store and they think first it’s snake skin. They are like, “that’s disgusting!”

And I say, “No, it’s not. It’s not from animals; it’s a by-product from fishery industry. It will be a waste if it’s not used.”

And then they actually say, “Wow, that’s pretty fantastic!”

HOW VALUABLE IS FISH LEATHER, AND DOES IT SOLVE A WASTE PROBLEM?

CD: The next take-away from the discussion: It is high value.

09:27

Do we really solve a waste problem with making fish leather?

No we don’t!

First, because it’s not made in large quantities today.

We asked the leading tannery, a facility where they make fish leather, and they produce around 10,000m2 per year which seems like a lot but it’s actually only around 3 tons of material.

Second, because much of the fish skin is already recovered and turned into animal feed, fish meal. Of course, we could recover even more than what’s being done today, but that’s not really the point here.

What is interesting with fish leather is that the market value you create for each piece of fish skin recovered is very high. In other words, one ton of fish leather is much, much, much, much more valuable than one ton of fish meal. And this was the main talking point.

10:29

GEIR ODDSSON (GO): Here we are seeing examples creating a lot of values from a resource that used to be thrown away.

CD: This is one of our guests at the talk show, Geir Oddsson, Senior Adviser at the Nordic Council of Ministers, also working with the Working Group of Fishery and Bio-economy.

GO: This is encouraging to see in action. But I think fish skin is only a part of the solution. Fish skin is also the need of the high fashion industry and accessories. Expensive stuff. What about the rest of the fashion industry, the clothes we wear every day?

11:18

CD: OK, so what did we learn so far?

One, we know how to make it. It doesn’t smell and it is very robust and attractive material to work with.
Two, the market is rather small right now; fish leather is mostly used for luxury fashion.
Three, it does not solve a waste problem, and it will not until the market is very large scale, which is not going to happen anytime soon.
And four, the demand for leathers is growing rapidly.
Now a couple of objections and reminders, just so we don’t drift away.

THE BIGGER PICTURE: IS IT SUSTAINABLE?

We should be a little bit careful about where we are going to spend our energy, time, and public money.

We have our colleague Eleen on the line and coming with a couple of insights for us.

Let’s put a little bit coffee shop atmosphere, shall we? There you go.

12:12

CD:  Hi, Eleen How are you?

ELEEN MURPHY (EM): Hi Camille, I’m good. How are you?

CD: Dynamite. During the research phase, you told me that there was an important point to be made.

EM: Yeah, well the main point I have to say is that to understand how sustainable a product is, you have to look at the whole cycle not just one part of it. For example, the contribution of fibres or whether you use fish skin or cow skin or wood or anything, it doesn’t drastically change the carbon emissions coming from the textile sector anyway. The real emissions are coming from the use of water in textile sector, and the fact is that it’s a global supply chain – those kinds of things. So you have to look at the big picture.

CD: OK, so energy and water intensity are the main drivers of the carbon emissions.

EM: Exactly.

CD: One strong argument for seeking material alternatives is when your first option is too resource intensive, and/or reaching its limit, like in the case of cotton for instance, which I suppose is the reason why there is a lot of hype around finding new materials and fibres. And sometimes it feels like we are solving a problem by looking somewhere else, but really, we were not.

And that is something I think we should address in more detail in this series, making sure we’re fighting the right battle.

EM: Yeah.

CD: That’s being said that the case of fish leather is interesting because demand for leather is rising fast in general, fish skin is a by-product of the fishery industry, so it’s there.

EM: Yeah. It is, definitely!

CD: So if we can replace cow skin by fish skin in the mix of leather, then that could become interesting from a sustainability standpoint.

EM: Yeah, definitely does. And one thing that should be studied with numbers, and a Life Cycle Assessment and so on: is the process of making fish leather substantially greener than the process for making cow leather, and if it is, let’s quantify.

CD: Right. So again, looking at the process of making it as much as looking at the source of material.

EM: Yeah.

CD: When it comes to life cycle assessments, there are also different ways of doing this and if we are responsible inhabitants of Planet Earth, we should really use the Planetary Boundaries Framework which gets the deeper perspective than just the system in question, by looking at impact on biodiversity, on the climate overall, etc.

So in short, in the world where leather is made of the fish skin, what is the correlation between overfishing, as well as all the other fish industry problems, and the supplies of fish skin for a so-to-say sustainable fashion industry?

Eleen, I’m wondering, would you wear fish leather?

EM: Yeah, I would. It looks lovely.

CD: Actually I’m looking the fish leather shoes right now. I just haven’t found anything comfortable enough but I asked our guest designer Halldora that we heard the earlier in the show. And she’s working on it, so fingers crossed!

EM: That’s exciting!

CD: Yeah. Alright … Thanks for passing by!

EM: Thanks, Camille.

FINAL WORDS

15:49

CD: Did you take notes? The question we should be asking is: how can we phase out cow leather, and introduce new types of leather that,

One: come from more sustainable sources (like fish skin)?
Two: are produced with substantially less carbon emissions than cow leather tanning?
We’ll keep investigating in the following episodes of this series on sustainable fashion and bio-economy. We probably need to inject a bit of research and innovation money here, don’t you think?

We’ll be back soon with more green knowledge, inspiration and entertainment.

Keep up the good work in the meantime!

END

In this episode, we get the tattoo machine going and spend quality time with Jyrki Katainen, European Commission Vice President for Jobs, Growth, Investment and Competitiveness, to review some of the hot questions related to the implementation of Circular Economy transition. Calling Brussels from a tattoo shop, we ask VP Katainen about EU’s commitment, economics of the transition, short term impact on jobs & competitiveness. We touch on the wider spectrum of the Climate Finance discussion and the role of public sector in facilitating the shift. This episode also features views from Bas de Leeuw, Managing Director of the World Resources Forum.

Check out the Circular Economy series page for complementary resources & bonus materials.

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Gabriela Lemos Borba & Linnéa Hultén
Transcribed by Oanh Nguyen
Senior Editors Eleen Murphy & Joshua Burguete Kirkman

Special thanks to Johan Signer, Chuva Featherstone & Tattoo Inkarnation

Music Credits: License by Ins. Green White Space.

EPISODE TRANSCRIPT

Camille Duran (CD): Today we talk economics. And to do so, we have the Vice President of the European Commission on the show! Jyrki Katainen.

Yeah baby, and we go deep!

[Jyrki Katainen’s voice]: We are very committed because according to our own understanding, Circular Economy will be the next mega trend in the world market economy.

[MUSIC]

CD: Vice President Katainen is in charge of Jobs, Growth, Investment and Competitiveness at the European Commission. Who better than him could we invite to address those issues in depth in the context of the EU Circular Economy policy package of course.

So today I wanted to make a mark. A mark to celebrate the European Commission’s commitment towards Circular Economy.

So I called a tattoo artist and got into a little bit of a multitasking exercise during the interview.

You’ll understand in a minute.

[Tattoo artist’s voice] So, if there’s anything, just tell me and we’ll take a break. Don’t forget to breath, and stay still….

[Telephone operator’s voice] Good morning, Cabinet of Katainen?

CD: Hello good morning, this is Camille Duran from the Green Exhcange?

[Telephone operator’s voice]: Yes, I’m just going to put you through to Vice President Katainen now, are you ready?

CD: Yes, thank you.

[MUSIC INTRO]

You’re listening to The Green Exchange, episode four of our series: Circular Economy in practice – Seducing The Financial Sector.

Yes, I thought that getting myself a circular economy tattoo on the shoulder while interviewing Katainen was a good idea since we were going to talk about commitment.

But let me back up for a second because this is actually a very serious interview.

CIRCULAR CHANGE – LOW HANGING FRUIT & GOVERNMENT SUBSIDIES

02:08

As we touched on earlier, in a transition towards a circular economy there are some changes that can be made incrementally, or by improving existing systems. Like increasing recycling rates for instance, of better designing products so they can enter circular loops. I am not saying it’s easy, but we are talking about improving practices within an existing system.

Then you have changes that are more radical. And they need to happen too. Selling products ‘as a service’ as we discussed is a good example. This creates a complete different cash flow structure for a company. Instead of receiving 200 euros right away when you buy your new jacket, the company may receive 5 euros per month from the subscription. Even if everyone agrees that there are long-term economic benefits to circularity of the economy, there are a few roadblocks we need to figure out.

This is something I had a chance to discuss earlier with Bas De Leeuw. He is the Managing Director of the World Resources Forum – by the way, we will be publishing his extensive interview in full as a bonus episode. To give you a taste, here is one key moment which connects to today’s episode and what I was talking about earlier.

03:26

BAS DE LEEUW (BDL): Industry, the business sector, is of course very diverse. Not only big and small but also in the way they would like to respond to consumer markets and to their target groups.

CD: Yes Bas. I asked both a large furniture company and a large packaging company if they recognised the economic challenges of the transition and the lack of financial incentives in the short term. In other words, why would I disrupt my own empire when I am making huge margins in a throw-away single use model, with global supply chains and cash flow structures based on volume sales or asset sales.

Of course they didn’t want to answer this and told me instead that “Sustainability is in the DNA of the organisation bla,h blah, blah, and all the CSR (Corporate Social Responsibility) stuff.”

What are your thoughts on this?

BDL: There are many companies, in particularly big companies, that want to be seen as pioneering, as leading society, partly because of corporate social responsibility arguments, branding arguments and that’s of course good. But I think it would be unrealistic to expect that if there is no business case for drastically investing in the circle economy that all companies in the world would start to do that. So then once more you need to have the supports from governments, taxes and subsidies. Also the small and medium sized enterprises cannot be expected of course to invest in, let’s say, secondary materials when they know that they can get raw materials for half of the price.

CD: So what you are saying that in terms of financing this transition or financing the shift, it needs to be facilitated by government and by subsidies and they play a key role in facilitating this move.

BDL: Absolutely, absolutely. And of course, there, I mean, the low hanging fruits where the business case is very obvious, of course, there is no support needed and businesses are already taking a good action. But, where the fruits are hanging a bit higher, you need to influence those framework conditions as a global governance.

CD: And that’s exactly what we wanted to cover in our interview with Vice President Katainen.

I feel we are ready to jump in. Back to the tattoo shop. We have to make a little bit crazy setup because the sound of the machine was quite loud but I guess it worked.

We were going to have Vice President Katainen over the phone for some 30 minutes, and since the tattoo artist could not come to the studio with all his equipment and stuff, the studio came to the tattoo artist with all the equipment and stuff.

6:49

[Short conversation between CD and the tattoo artist.]

[BACKGROUND SOUND & DISCUSSION – TATTOO SHOP]

[Johan Signer’s voice] When it comes to deciding what we are going to apply to Camille’s shoulder, we have the approach of making an abstract symbol containing three circles that are not yet closed. And three circles symbolise industry, public sector, civil society. That three circles are not closed symbolises that work needs to be done.

CD: And when we reach a full circular economy then we can close it. In twenty years.

[Short conversation between CD and the tattoo artist]

A few moment later.

—–

07:49

CD: OK, let’s go.

[Telephone operator’s voice]: Good morning…cabinet of Katainen.

CD: Hello good morning, this is Camille Duran from The Green Exchange.

[Telephone operator’s voice]: Yes. I’m just going to put you through to Vice President Katainen now. Are you ready?

CD: Yeah, OK. Thank you.

[Music]

CD: Hoopla- go DJ.

JYRKI KATAINEN (JK): Hello, Jyrki Katainen.

CD: Good morning.

JK: Good morning.

CD: How are you?

JK: I’m fine.

CD: How is the day in Brussels so far?

JK: Yes, it’s quite nice, actually. Very summer-like weather, quite warm and sunny. Not always very typical weather in Brussels.

CD: Thank you very much for being with us, I think you were briefed by your team on the key points we wanted to address, so maybe we can jump right in?

JK: Yup. Very good.

CIRCULAR ECONOMY – THE NEXT MEGA TREND

CD: Vice president Katainen thank you very much for making time for us we know how busy you are. We are going to talk about financing the transition towards Circular Economy. But before we dive in I wanted to get your feeling on how serious and committed the EU actually is about the Circular Economy transition?

JK: We are very committed because according to our own understanding, Circular Economy will be the next mega trend in the world market economy because it makes a lot of business sense. It has big environmental and societal benefits. It will help businesses to reduce risks and also it will raise productivity and competitiveness. So those are the reasons why Commission proposed a Circular Economy package just a little bit more than year ago.

CD: Well that’s good to hear, because we feel many organizations are very serious about contributing to its implementation.

JK: Yes.

CD: Today I wanted to use this interview to make something symbolic, something that will last and that we’ll be able to look at in 2030, and hopefully in 2050, and feel very proud of, looking at the transition we’ll have been able to achieve all together.

Now you probably have no idea what I am talking about right now.

I am actually in a tattoo shop, and I have a tattoo artist ready to go beside me, and what I would like to do is get a circular economy symbol tattooed on my shoulder while we run this interview – if it doesn’t make you uncomfortable?

JK: No, no, no, no. It sounds interesting!

CD: I though about this, and I think that sometimes in life you have to show that you’re serious. And we all are serious here.

JK: You are very brave and committed.

CD: Yeah, let’s go because I want to be careful with your time. I hope it’s not going to be too noisy.

JK: Best of luck.

CD: [Aside] I pause here for a second. In the post production process we lower the volume of my track while he replies on the phone because the sound of the machine is quite disturbing.

Alright. Back to it.

11:22

CD: So at this point in the series, we have introduced everything and we really want to dive into the financial aspects. So, in the financial industry; first of all, we are successful when we minimise risks and maximise returns – and it’s kind of the golden rule, right?

In practice, how can we incentivise the financial industry to support companies that are successfully making the transition, and avoid those that cannot or are in a shrinking sector?

JK: Well sometimes slow repayments and low rates of return might make it difficult in the beginning to market projects in green economy but I firmly believe that financial sector is willing and capable to adapt new business models.

Sometimes it may be necessary for the public sector to step in with guaranties to cover first law seizing in order to reassure private investors, but we are confident that once the viability of this project is demonstrated, these concerns will dissipate.  EU has established a new financial instrument which is named European Fund for Strategic Investment.  Its acronym is EFSI.  And it’s part of the European Investment Bank and it’s providing risk financing to private and public-private partnership investments, and this is an excellent tool for new technology investments and circular economy businesses.

But the main issue I think in this field is to create regulatory clarity and certainty for the private sector. For instance, as part of our Circular Economy package we proposed that we have to increase recycling of waste, and there will be an exact time or exact year when this has to happen. It’s legally binding target to member states. Also we want to reduce significantly municipal waste going to landfills. So once the regulation is in place, the entire road starts adapting there and then financial sector most probably will follow the needs of the investors.

CD: Right. And this is a key issue, often discussed with green finance. How do we build enough confidence so the private sector can really step in with financing. We’ll talk more about this, but another question first:

We see flows of money changing in a circular economy. For instance, the pay-for-use model has a very different cash flow structure from the traditional pay-for-ownership approach. And this directly impacts the cost structure of the company and of course its financing requirements. Do you recognise this challenge, and how can we facilitate the shift? What are some of your thoughts around this?

14:39

JK: Yeah I acknowledge that transition towards a circular economy will also challenge some established ways of how business is done. Our role is to help and support innovative approaches and encourage new business models; for instance, announced as part of the Circular Economy package, the action plan in which we are working on launching a platform to support the financing of the circular economy.

This platform should bring together Commission, European Investment Bank, national banks and commercial banks interested to participate and the aim would be to look into existing possibilities for financing circular economy projects, exchange best practices and point out gaps and eventually propose improvements and propose new instruments for financing circular projects.

15:39

Last January I participated in Davos annual meeting and it was quite fascinating to listen that there were already a big amount of banks – well known established, well-established commercial banks – who were already deciding new products for circular economy needs. For instance, they said that leasing is growing business and the leasing needs different financial opportunities than just a linear business model.

But it’s not only about financing. In early June this year the commission presented guidance through a communication aimed at supporting consumers and businesses and public authorities to engage confidently in the collaborative economy.

These new business models can make really an important contribution to job growth in the European Union, and encourage and develop in a new responsible manner. The lack of legal clarity and regulatory recommendation sometimes hamper the development of the collaborative economy in Europe.

So with this communication, the commission explains how to apply sixteen E.U. law to collaborate the economy with the objective of promoting the balanced development of a collaborative economy in Europe.

THE ISSUE WITH GDP & INCENTIVISING THE COMMERCIAL SECTOR

17:18

CD: If the efficiency of the economy increases because materials are not thrown away but enter new production processes, a positive effect on GDP is to be expected – even if the estimation is rather difficult. Do you like GDP as an indicator by the way?

JK: Yes I think it tells what it tells. I mean it doesn’t tell everything but it tells the production and normal economic growth.  So I think it’s a useful tool but we should not expect everything from GDP.

CD: I agree, yes. One negative effect on GDP is the effect of repair and reuse – which has a positive societal value, but still,  with repair and reuse, we need less products, so less volume of sales. What do you tell a CFO, a CEO, and their shareholders when they logically forecast such a scenario (less volume of sales)?

JK: Well we don’t have any exact estimate how many jobs and how much growth the circular economy or a broad range of actions proposed in our action plan will deliver.

However, there are a couple of international studies which are quite interesting. The first study indicates that resource efficiency is one of the main drivers of company’s competitiveness.  EU manufacturing firms spend on average forty percent of the costs on raw materials compared to a share of twenty percent for labor costs.

It is estimated at a better use of resources could deliver savings over six hundred thirty billion Euros per year for European industry. Another study shows that business-led, private sector estimates…says it has the potential to boost EU’s GDP is very significant if we have more circular economy business models up and running. They are talking about close to 4% higher GDP only because of resource efficiency.

19:47

CD: How can governments incentivise and support their commercial sector to activate the shift and deliver short term results when the global landscape is so competitive and “linear”? Maybe you have very good intentions as a company and you are keen on implementing the strategies we are describing in this series. But your competitor in Asia doesn’t care, you’re playing on a global landscape, there is a war on prices…How do you compete?

JK: Well I’m not very sure if the world is still leaning towards a linear model. I just came back from China and there we discussed circular economy because circular economy is included in China’s current five-year plan and they are taking it very, very seriously. And everybody understands why because there is an environmental necessity.

And we agreed that we will compare our regulatory changes, or our ideas how the boost circular economy business models, both in China and in Europe; because in Europe, of course, we have environmental necessity to be more sustainable but also we have an economic necessity because our production should be higher added value, and our productivity should be higher in order to finance welfare model of our economy. So that’s why circular economy business models are necessary in order to improve added value and by doing so we can get more revenues for welfare society.

So the world market is already changing and one reassuring or assuring fact is that if you look at the best practices or best examples in circular economy field, they come from private sector.  So private companies are leading the development at the moment. Then it should show everybody that Circular Economy is not just a public sector’s aim or traditional environmental stuff, instead it’s already up and running and it has come from the business logic. And now we as a regulator and decision maker have to understand how we can foster the development.

22:24

I just give you a couple of examples. The first one is that the public procurement accounts roughly of one fifth of EU’s GDP, so it could be a powerful tool to boost/activate circular economy business models if decision makers at local level and at the national level would use our guidlines permission as provided voluntarily […] for member states and for municipalities…

[SKYPE CALL DISCONNECTS]

CD: The call is disconnected. Let me just restart it.

23:05

CD: Hello this is Camille Duran again. Yeah we were disconnected.

Telephone operator: Oh, OK.

JK: All right let’s continue.

CD: Yes sorry we got disconnected.

This is very interesting, and it’s going to be encouraging for the financial sector to digest this because those guys are not so much into saving the planet, as we know they are more making sure they are going to get actual returns on their investment.

JK:  Yes that’s right. Circular economy in its terms; in the term circular economy, both words really matter. There should be circular and there should be economy. And basically for policymakers, if we want to foster the circular economy, we have to see or we have to make sure that profits are coming from somewhere.  Otherwise there’s no profit, there’s no economy. And that’s why regulators have to be very cautious not to regulate wrong things but instead to create right incentives which will change the business logic and aims the direction where the profits are coming from.

CD: I’m curious to hear your take on the tax system we have today and the necessary shift from taxing labour to taxing natural resources. Any recent development on that front?

JK: Yes taxation is a very good tool but at the European level it’s quite difficult to get common taxation because it in the decision progress we need unanimity and only one country can pluck everything but commissioners proposing. That’s why the commission itself has that much attention to European wide taxation but we are also providing information to member states to look at the best practices from other countries.

CD: OK so this is not something you are directly involved with but you provide some guidance’s and information to the national governments…

JK: Exactly.

CD: Vice President Katainen, thank you for your time. I know you need to run and I am glad we could get into some levels of detail together. I still have half an hour of tattooing to go through before my circular economy symbol is ready.

JK: OK. Good luck!

CD: If this becomes a thing at the commission, we could start an Instagram profile dedicated to circular economy tattoos. What do you think?

JK: That’s a good idea.

CD: Good luck and speak to you again soon.

JK: OK thank you very much. Thank you. Bye.

CONCLUSION – SENDING TATTOO PROOF TO VICE PRESIDENT KATAINEN

 25:59

CD: If once you had told me that one day, I would send a skin picture to the Vice President of the EU Commission, I would have called you crazy! But you know what, we had to send a proof that this was all real.

Now, we got very important insights from that discussion. Let’s make good use of it. We hope you like it and we’re going to follow-up on those points as we unfold the rest of the series.

In next episode Barack Obama is getting his own circular economy tattoo, and I give him a call from an helicopter on fire.

….No I’m kidding; the helicopter was not on fire!

Remember, you can find us on Facebook at The Green Exchange talk show. Click ‘Like’ and we keep you posted from there. Subscribe on iTunes or in your favorite podcast app. This way you can carry The Green Exchange in your pocket and listen from wherever you are.

We’ll be back soon for more green knowledge, inspiration and entertainment, keep up the good work, in the meantime.

END

How do consumer markets need to change? What business models are rising with circular economies? How are our shopping habits going to evolve? How can designers and manufacturers best do their share?
In this episode, we pay a visit to Ditte Lysgaard Vind and review six strategies that have already started to prove successful on consumer markets, thereby accelerating the transition. For each one of those strategies, our editorial team highlights success stories from around the world, reviewing how those businesses leveraged the Circular Economy narrative to gain a competitive edge.

Check out the Circular Economy series page for complementary resources & bonus materials.

Produced by Camille Duran
Coordinated by Han Nguyen
Published by Gabriela Lemos Borba
Senior Editors Eleen Murphy & Joshua Burguete Kirkman
Transcribed by Tuly Sarah Costa

Music Credits: License by Ins. Green White Space.

TRANSCRIPT FROM THE EPISODE

Camille Duran (CD): Hey before we start on behalf of all the team, I wanted to say thank you for tuning in. i don’t think we do this often enough. We are growing fast, we are having fun  and we do value the time you spend listening to this show there are a lot interesting other options and also a lot of sh*t programs you could be consuming instead. So thank you we do value your support and we are constantly pushing ourselves to deliver alright lets go…

[MUSIC]

CD: I feel like finding a co host for this episode at least to help me set the stage and that’s a good reason for me to get out of my cave a little bit. Let me figure this out. Oh I know someone.

*phone rings*

Ditte Lysgaard Vind (DLV): Ditte?

DLV: Hey Ditte its Camille.

DLV: Hey how are you?

CD: Good. And you?

DLV: Great, thanks.

CD: Are you in a mood for a circular cup of coffee?

DLV: Always.

CD: Alright I am on my way.

DLV: Cool come on by.

CD: Alright cheers….

01:10

CD: My co-host today is called Ditte Lysgaard Vind, she is a circular economy expert, a friend of the show and her focus is on stakeholder management and communications. I like working with circular economy because many of the experts and inspiring figures are women and it makes our life much easier when trying to create gender balance on the show which we dramatically failed in our climate finance series, for instance. But please know we are trying hard.

ROBOT VOICE: Telephone transportation machine ready to go

CD: Yeah thank you that will be quicker. Ummmh can you walk the dog as well please?

ROBOT VOICE: Of course!

CD: Great and can you ask your husband to do the dishes?

ROBOT VOICE: Why not?

CD: I mean I could ask you but for the sake gender balance…

ROBOT VOICE: As you wish.

CD: Well thank you guys. You are definitely better than Siri.

ROBOT VOICE: Indeed, Siri does not do the dishes.

SIRI: I’ll pretend I didn’t hear that.

CD: Let’s go… In the meantime, if you haven’t listened to the previous episodes of our series, Circular Economy in practice – now is a good moment.

You’re listening to the Green Exchange, chapter three – your third chance to get practical with Circular Economy!

Go!

DESIGNING FOR CIRCULARITY, LONGEVITY, AND SHIFTING BUSINESS MODELS

02:33

[SOUND OF DOOR KNOCKING]

CD: Hey Ditte.

DLV: Hi, come on in.

CD: How are you?

DLV: Good! How are you?

CD: What a surprise, huh?

DLV: Yeah!

CD: Oh the microphone is set up and everything.

DLV: How lucky can you get?

CD: Was this prepared…?

Well, you are here to help me little bit with setting the stage for this episode we are producing right now. As you know, we have been talking about municipal waste stream, which is done. We have bunch of case studies out there. We’ve talked about industrial symbiosis. Now I feel it is really time to start talking about consumer markets and all the changes that need to happen on the supply chain and so on. I don’t know how to structure this episode. So I thought I would give you a call.

DLV: Yeah.

CD: There is the discussion about supply chain and what happens to the stores. Let’s talk about designing those products and the way things need to change. Like I suppose if I am a manufacturer or if I provide some sort of services, at the design stage, I need to rethink.

DLV: I mean, design is the absolute essential piece of circular economy whether it would be designing a particular product or business model or what not. How do you actually make sure that what you are designing is able to be redone later on, reused in different ways. Which means, that whatever product that is need to be disassembled easily and up-cycled.

CD: So designing for circularity, basically.

DLV: Yeah. And there are a million ways to do that. Another important point is to design for longevity and to make sure that products actually last.

[AUDIO CLIP: “Ok. Take this yogurt for instance. How can we make it more circular? Because right now, it is only 3% circular.”]

04:33

CD: All those decisions that are being made by the product or service manufacturer or company, maybe that’s a good way to structure? Like, dedicating chapters to what manufacturing companies can do or what are going to be the changes there, and then changes around the modern consumption behaviour, what used to happen from that angle?

DLV: Yeah…For me, it’s all about the circular economy presenting an ideal opportunity for consumers to engage within sustainability, without having to compromise on price, design, convenience and all that.

CD: Alright. So everything should be calibrated for the consumer to be happy or not have to spend more money or drastically change habits. It should be a natural choice.

DLV: Yes, it should be the natural choice. One thing they do have to do, however, is change habits. Going towards the product as a service business model means that consumers need to be ok with subscribing to services more than buying products, which is a challenge for consumer markets. It is a different commitment. There are a lot of good things in it but it takes initially…even just like signing the subscription can be a barrier if you are not really good at marketing towards the consumer, making sure that they are safe and comfortable in the process.

CD: So, if we are to dedicate a section of the episode to the product as the service, would that make a sense to you?

DLV: Yes, that would make sense. To me, product as the service is a super interesting business model because what it does is completely change the incentives of the producer. Where you used to have your business growth based on how many products you were able to sell, you are now basically creating your economic gains through how long your products are able to last, because the longer you are able to circulate them the more money you’ll actually make. And also a simple thing for business is that if you’re actually in contact with your consumers at that exact point when they’re disposing a product or passing it on, then that’s a unique marketing opportunity. That is exactly where you want to be in contact with your consumers. So that, for me, is an extremely exciting change in the business model.

[MUSIC]

07:26

CD: How about sharing economy and trading products as an asset? This is called making markets more liquid, because you organize the number of transactions for each products or services in the market.

DLV: The shared economy and the digital platform around it is really enabling us to have a lot more transaction around whatever products we might have. And I think there is a huge shift happening in our relationship with our products and we are getting more and more used to passing them on, not just putting in a cupboard.

SHORT INTERLUDE: HOW DO YOU LISTEN TO THE GREEN EXCHANGE PODCAST?

08:07

“My name is Jakob Economou and I work with Cleantech Innovations. I just listen to Green Exchange on my way to work or on my home after work. I think it’s really great podcast, and great discussions. I have learned a lot from it.”

BRANDING THE CIRCULAR ECONOMY – MAKES SENSE FOR SUSTAINABILITY & BUSINESS

08:32

DLV: How do we actually brand circular economy in a way that is positive and something that people would like to be a part of? For me what I am looking forward to participating in and how to create the narrative of circular economy and how to really make it in a positive engaging way for consumers.

CD: So how do we communicate and narrative that is compelling enough? But you know, I get the feeling that if I am a consumer, taking the shared economy services for instance, when it’s going to make sense financially or economically for my purchase, and it is easy enough, thanks to the technology that enables us – I got it in my smartphone or have access to the information or I know where to go and buy – I feel like lot of people are jumping on the wagon without even really knowing that what they are doing or they are buying is really circular. Because the economic driver and technology enablers are there, it becomes sort of no brainer.

DLV: It’s not one or the other. I completely agree that the reason why circular economy is really catching on, and why there are a great number of businesses that are really pushing the agenda, is because it makes sense. That’s the beauty of circular economy. It makes sense for economic perspective as well as sustainability point of view. But it’s not one or the other, because what we are doing right now is a systemic shift. We really need to go to a number of ways and there are definitely lots of things happening just based on the fact that is common sense. But we really need to push it from different angels. Communicating that change is quite essential in my belief.

CD: Ok so, we can look for case studies where businesses or organizations in general have ben making great efforts in communicating the concept, and disseminating the narrative. Would you be happy if we heard a podcast episode about these points?

DLV: I would be very happy for that.

CD: Ok, great. Hope we can deliver this now that you’re putting on pressure. I am going to get back to work. Thanks for taking some time and we will be in touch soon.

DLV: Cool. Thanks for coming by.

CD: Of course.

[TELETRANSPORTATION MISTAKE]

[GANDALF CLIP: You shall not pass!]

CD: Ooops, sorry, that’s not where I want to go anyway, so…yeah, I will find another way.

[CAMILLE RETURNS TO THE STUDIO]

11:32

CD: God, this guy was angry. Ok, so where were we? Where was I? Yeah so Ditte helped us define how to segment the consumer market discussion. We talked about:

– Designing for circularity,

– Product as a service,

– Designing for longevity,

– Reuse, Repair and upcycling,

– Sharing schemes,

– and effective communication strategies.

RECYCLING FISH NETS, RENTING DIAPERS, AND OTHER CIRCULAR ECONOMY STRATEGIES

12:00

CD: I put the team on a hunt for PRACTICAL EXAMPLES for each one of those strategies. And we have Eleen and Josh on the line, who are going to point us to case studies for each chapter.

CD: How are you guys doing?

Eleen Murphy (EM): Hi Camille, we are doing well!

[SMALL TALK]

CD: So I should mention before we start: This is not an endorsement section. These companies do not pay us money to get exposure.

By the way, it will always be clear to you when companies are funding the show. We sometimes collaborate around content marketing but our editorial independence and integrity is not for sale. let us be clear. We should we start with “designing for circularity”. Eleen, what have you got on the front?

EM: Well, designing for circularity means real commitment from a company, right? I have found this company manufacturing carpets for residential and business sectors and they have become the first carpet manufacturer the EMEA to adopt cradle to cradle design. And they are really pushing towards circular economy.

CD: And their name is?

EM: Their name is Desso Carpeting. So, on their site they have lot of information actually about what they do and actually do it. They explain that to close a loop, you have to be able to take used goods back and recycle or reuse the materials. So for them it means they’ve set up the system to collect used carpets and they’ve developed also what they’ve called “take back technology” to receive used materials and to recycle them. So that’s really good.

CD: When we talk about designing for circularity, it’s not only the product itself but it is also circular supply chain, right?

EM: Exactly.

CD: Great. So we put the link on the page and we can give an example maybe for designing for longevity and that’s you Joshua working on that one.

Joshua Burguete-Kirkman (JBK): I have found this really interesting fashion designer. He’s called Cridland and this guy has gone out and made a sweatshirt that he has guaranteed for thirty years. So think about that for a second. One of the things about longevity in fashion in particular is to understand whether something is actually going to be in fashion still after 30 years. And I guess what Tom has done so well here is that he has managed to make something that is every day. We’ve have seen this style of jumper stay in fashion for so long. I guess you can assume that after 30 years from today the same style will be relevant still. In terms of winning over the message of this type of fashion, I can read out some names here, Leonardo DiCaprio, Hugh Grant, Stephen Fry, James Bond, Daniel Craig, etc. James Bond wears that! May be it is bullet proof!

CD: Well, alright, that’s a great one. We will put the link as well. I want to talk about product as a service that was a big one with the discussion with Ditte. It’s a major shift. There are lot of great case studies out there, we had to pick one. It was you Eleen working on this. What’s your choice?

15:04

EM: Well, my choice is actually nappies or diapers, that’s what called in America. And this is one of those things that are very hard to deal with, very hard to think about how to recycle them. Parents are usually very busy; they don’t really have the time to maybe wash the reusable ones for example. So it turns out not only is there reusable nappies and they are well designed and easy to use but increasingly in Europe we’re seeing companies cropping up that provide reusable nappy rental schemes, and laundry schemes. So what they do is that they rent out nappies, maybe to the parents home and the nappies are collected at the end of the day. They’re brought to laundry place to wash them and then brought back again in next week or next day. So that’s pretty interesting.

CD: So I pay like a subscription as a parent? For me the move is the same, I put it in a bag and someone picks it up, washes it and brings a bunch of clean nappies for the coming week.

EM: Yes so it is a really great service. Takes a lot of pressure off the parents as well. The service or the company is called Lavanda in Italy. They also present education seminars to spread awareness to parents, telling them about the advantages of washable nappies, compared to disposable ones. So there’s health and environmental advantages as well. So that’s also really interesting as well.

CD: Reuse, repair and upcyling, a number of companies are doing great work in that direction as well. Josh, your extreme sports fibre influenced you in your choice here.

JBK: That’s right! Well, I have found this really fascinating company online, called Bureo. I think I am absolutely butchering the pronunciation, “Bureo” what do you think? Is that right? [Laughs].

Bureo, so they are from Chile and they’ve come up with the idea of ‘net positiva’ which is a really cool label for what they’re doing. They are collective up old fishing nets, and the fishing nets are huge problem in the ocean around the pacific. So, they are grabbing the fishing nets, they are processing them and actually they are making skate board out of this old fishing nets. Fascinating stuff!

CD: So that would be an example of upcycling, right?

JBK: Yes they are finding another use, yeah!

CD: I guess repair and reuse of fishing nets are obvious one here, they make new products and there’s quite some added value. When you sell a skateboard you don’t sell it for ten bucks! It’s probably a good market as well.

JMK: That’s right. You know these skateboards are going like, you know, you can spend like 200 dollars for a skateboard. So being able to create this new product, upcycling from the old fishing net, one that has been used well for sure, it has probably done its job. But then they break down and the fisherman usually would just cut them in drifts in the sea. They have managed to find a way to stop that from happening. It is also creating a new a product in the same process.

18:22

CD: Great. That’s a good one. Eleen, sharing schemes?

EM: Yes, so, I picked an example that everyone is kind of aware of, which is car sharing or ride sharing, like Uber or that kind of thing. There’s a quite a lot of them. The one that I picked that stands out in Europe is BlaBlaCar.

CD: Yes.

EM: Have you heard about it, guys?

CD: I have used it many times.

JMK: [Speaks French].

EM: Yes it is a French company. So they are the world’s largest long distance ride sharing community apparently. So, what happens is drivers and passengers can connect using this service, and then they agree to travel between cities together and they share the cost of the journey. So that’s really great. And it is very popular as well. There seems to be like 25 million members across 22 countries now. So that’s Impressive.

CD: So, That’s really great example which is very large scale now. I think that car industry is really adjusting to this new company. Can you talk about the numbers and if there any threats to the car industry in Europe?

EM: Apparently, according to recent study, this could trim global vehicle sells down by five hundred and fifty thousand by 2021 and cost manufactures more than 8 billion dollars in lost revenues. So, you know, it’s a big change!

CD: Absolutely. It’s a good one. Last but not least, we were talking about effective communication strategies and how brands are taking their customers on board on their journey towards circular economy, and are not shy on communicating their differentiator. I think that Joshua have a good example.

JMK: Look, I have a really out the box example. Once again it is in the fashion industry which you know, the fashion industry has had a very big dirty secret for far too long. This one is called MUD Jeans. They are a label who basically releases the jeans for 7.50 Euro each month.

CD: So it’s product as a service.

JMK: That’s correct. It’s product as a service but the way they are communicating is so clear and easy to understand, and the options to the consumers so great in my opinion. So, basically, you get three options: you get the jeans, you decide to get hold on to them, if you like them. So that is the very straight forward one, very much business as usual. But, if you feel like changing them up or get a new pair, you simply just return them and select the other pair you like! You continue to pay the monthly fee but you have a completely new item to wear and ‘dance the night away.’ At the end of the day, you send them back and you get a 10 Euro voucher to use again on something else. So, it’s a fascinating way for people to keep their wardrobe changing whilst not wasting any valuable materials like cottons and all the energies that embedded in that material.

CD: When you google them, MUD Jeans, their tag line is ‘Circular Denim.’ They are very upfront about it.

JMK: That’s right. They are very clear and that’s what make these kind of proposition so powerful, because if you are not clear about what’s going on with this type of wearing someone else’s jeans, that’s kind of weird for most people. So, you have to be really clear about what you are doing, why you are doing and what the other benefits are to do it other than just environmental. With 7.50 Euro, you get to have a different pair of jeans each month, if you wanted to. So there’s a different value, not just environmental, it is actually a fashion value proposition too.

CD: Alright. Thank you, guys. We cannot get more practical within the time we have. We should so this more often.

EM: Yes, it was great fun!

22:34

CD: Please note that we are going to investigate those strategies further in coming episodes. We will explore how they are applied to textile and fashion sector. But before that we have a surprise coming up.

I got to chance to talk economics and transition with the vice president of European Commission, Jyrki Katainen, currently in charge of Jobs, Growth, Investment and Competitiveness. And in this interview, he is making important announcements. So make sure you don’t miss out. We’ll also talk to Bas de Leeuw, Managing Director of the World Resource Forum, out of Switzerland.

Before wrapping up, I want to mention that we are going to start live streaming our events on Facebook, so you can participate in the debate from your living room.

So what you can do right now is open Facebook….come on, everyone is waiting. Search for ‘The Green Exchange’. You’ll see my grandmother with blue headphones on the banner, click ‘LIKE’ and we’ll keep you posted from there!

That’s all for today. Hope you liked it. Coming back soon with more green knowledge, inspiration and entertainment. Keep up the good work, in the meantime.

END