LCA and Circular Economy

A Circular Economy aims to decouple economic growth from the consumption of finite resources by moving from a linear model of take-make-dispose to a regenerative model that creates society-wide benefits and builds economic, natural, and social capital.

As defined by the Ellen MacArthur Foundation, it is based on three principles and is powered by renewable energy:

• Design out waste and pollution
• Keep products and materials in use
• Regenerate natural systems

A circular economy requires consideration of the whole life cycle of a product or service. This helps to avoid ‘burden shifting’, where the impacts are simply moved to a different part of the life cycle.

Life cycle management provides a framework for a systems approach that can help businesses to transition to a regenerative model by understanding and managing the material flows and impacts across the full life cycle of a product or service.

The life cycle management framework includes life cycle thinking and life cycle assessment:

• Life Cycle Thinking is a qualitative approach that creates an understanding of the flow of materials over the life cycle of a product or service and encouraging the consideration of environmental impacts upstream and downstream of production.
• Life Cycle Assessment is a quantitative methodology to estimate potential environmental impacts across life cycles, identifying any impact hotspots and providing a baseline to implement improvements across the life cycle of the product.

Application of life cycle management could result in changes such as:

• Product design to make disassembly easier, extend service life, or reduce consumer maintenance requirements
• Raw material selection to include materials which can be in use for multiple life cycles, use of renewable or recycled materials, or to avoid raw materials which are harmful or problematic
• Implementation of closed loop opportunities within the value chain
• Greater engagement with supply chain partners to improve the availability of recycled materials or recycling infrastructure

In a major study for the Ellen MacArthur Foundation in 2015, McKinsey demonstrated that a circular economy approach could boost Europe’s resource productivity by 3 % by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits.

Closer to home, research by Sapere on behalf of the Sustainable Business Network (SBN) found that;

“Auckland could liberate up to $8.8 billion in additional economic activity and reduce carbon emissions by 2,700 ktCO2e in 2030 by shifting from the current linear take, make and waste model to a circular economy.”

Life Cycle Thinking (LCT) and Circular Economy (CE) are complementary concepts that can help shape a more sustainable world. CE provides a strategic framework for closed-loop material flows and a gateway to LCT, whilst Life Cycle Assessment (LCA) complements CE by assessing environmental impacts, thus providing evidence critical for effective decision-making.

Interest from government and industry to transition Aotearoa New Zealand from a linear ‘take-make-dispose economy’ to a CE and improve our overall performance as a sustainable society has increased significantly in recent years.

The New Zealand life cycle community has a key role to play in this transformation, to ensure that the best decisions are made system-wide. It is crucial that environmental impacts and burdens are not simply shifted but rather any potential trade-offs are identified. We need to help promote the importance of using LCA and LCT in decision-making, system design, and transition work towards a Circular Economy to realise reduced impacts across the economy and society.

Read LCANZ’s white paper: LCA, LCT and transitioning to a Circular Economy.