This scoping paper focuses on the potential of the significant volume of organic waste flowing through the urban environment. The aim is to highlight the opportunities to capture value, in the form of the energy, nutrients and materials embedded in these flows, through the application of circular economy principles. Organic waste
from the organic fraction of municipal solid waste streams and wastewater that flows through sewage systems – is traditionally seen as a costly problem in economic and environmental terms. This scoping paper will explore the idea that
the equation can be reversed by designing more effective recovery and processing systems to turn organic waste into a source of value and contribute to restoring natural capital.
Several barriers need to be overcome to shift the system towards one aligned with circular economy principles. These include regulatory barriers – such as inconsistent and ill-fitting definitions of waste, and economic hurdles, including the absence of accurate externality pricing – which tilt the field towards incumbent systems, rather than levelling it for biologically derived materials and energy. Overcoming such barriers will further enable the technological advances required to realise the economic opportunities.
Clearly, there is a high-level opportunity to capture value and increase the contribution of urban biocycles to building natural capital. However, this paper demonstrates
the need for further analysis. What is required is no less than the following: to develop the baseline understanding of the urban organic landscape as well as quantify the opportunity; to quantify the private-sector opportunities; to identify the systemic solutions that enable the economic use of recovered nutrients; and finally, to highlight the regulatory levers needed to develop new markets in organic materials.
The Biocycle economy
The bioeconomy, or the biocycle economy as it is referred to in this scoping paper, includes industries that deal with biological materials at different stages of the value chain. Such industries include agriculture, forestry and fishing at the primary stage; food processing, textile manufacturing and biotechnology in the processing stage; and retail and resource management at the consumption and end-of-use stages.
The focus of this paper is on flows of organic matter through cities and the opportunities to increase their recovery and enhance their use by applying circular economy principles.
The significance of the biocycle economy. Seen as a whole, the biocycle
economy plays a critical role in global economic, human and environmental systems. According to the Natural Capital Coalition, “farmers, traders, wholesalers, food manufacturing companies, and retailers together make up the world’s largest sector, generating an approximate global value of around USD 12.5 trillion based on revenue, or 17% of world gross domestic product (GDP) in 2013”.
In emerging countries, the biocycle economy’s proportion of the overall economy is even more significant; for example, the agricultural industry, including crops and livestock, accounts for 22% of Brazil’s GDP.
According to the European Commission, the bioeconomy’s estimated worth in Europe is approximately EUR 2 trillion in turnover per year, and accounts for more than 22 million jobs. This figure encompasses the production of renewable biological resources and the conversion of these resources and waste streams into value added products, such as food, feed, bio-based products and bioenergy. In Finland for example, the government forecasts its national bioeconomy to grow 4% annually to 2025, increasing economic output from EUR 60 billion to EUR 100 billion and adding 100,000 jobs. The greatest opportunities for growth are expected to be in creating new products and materials, with organic waste streams playing a significant role as raw materials.
Urban Biocycles
Every year, people harvest roughly 13 billion tonnes of biomass globally to use as food, energy and materials. This biomass flows through the ‘biocycle economy’, as it is referred
to in this scoping paper. This part of the economy includes industries that deal with biological materials at different stages of the value chain: for example, agriculture, forestry and fishing at the primary stage; food processing, textile manufacturing and biotechnology in the processing stage; and retail and resource management in the consumption stage. Together, they generate a global value of approximately USD 12.5 trillion, equivalent (in 2013) to 17% of global gross domestic product (GDP).
“Cities aggregate biological materials and nutrients from rural areas, but return few of them to the agricultural sector”
The biocycle economy’s share of the overall economy is much larger in emerging markets, where the majority of growth in per capita consumption is expected. In this context, the volume of biomass flowing through the global economy is set to grow: notably, by 2050, global demand for food is expected to rise by approximately 55%.
While such parameters offer considerable commercial and trade opportunities, they also involve numerous challenges. These include significant structural waste in the biocycle economy (about a third of all food produced globally is lost or wasted), as well as natural capital losses and negative environmental externalities. The volume of greenhouse gas emissions produced by global food waste is ranked third behind China and the US.1 Land degradation affects roughly one quarter of land globally and costs USD 40 billion per year.2 Eutrophication, or the accumulation of nutrients caused by surface run-off and the resulting overgrowth of plant life, has created aquatic dead zones all around the world.
At the same time, the economic opportunities are significant. The World Economic Forum estimates that potential global revenues from the biomass value chain – comprising the production of agricultural inputs, biomass trading and biorefinery outputs – could be as high as USD 295 billion by 2020.
The circular economy vision – How to close the nutrient loops?
In the report several manners are discussed about how to close the nutrient loops. For example, in a circular system, all nutrients would be returned to the biosphere in an appropriate manner. Furthermore, in the urban context, this means nutrients are captured within the organic fraction of MSW and wastewater streams, and processed to be returned to the soil, in forms such as organic fertilizer.
Learn more about the solutions and conclusion in the full report.
Source: Ellen MacArthur Foundation, March 2017