The National Taiwan University (NTU) Risk Society and Policy Research Center (RSPRC) held its annual Fubon Globalization Taiwan Risk Society Forum on 25 June 2019, on the topic of, 'Using the Circular Economy to Overcome Global Warming'.
This article summarizes the main points covered during the opening address and the keynote speech (part 1).
Opening Address by NTU Executive Vice President Professor Ching-Hua Lo
NTU Executive Vice President Prof. Ching-Hua Lo opened the forum by emphasizing that energy transition has become one of the greatest challenges our world is facing today, and that as one of Taiwan's most established universities, the NTU should be at the forefront to lead the discussion and research on related issues. He also highlighted the role of our center's Chief Director Prof. Kuei-Tien Chou in spearheading the conversation at the academic level in Taiwan, and thanked Prof. Chou for his contributions.
Keynote Speech by Taiwan Circular Economy Network (TCEN) Chairman Charles Huang: There is No Choice but to Transit to A Circular Economy
Taiwan Circular Economy Network (TCEN) Chairman Mr. Charles Huang gave the keynote speech at the forum. He highlighted the Special Report on Global Warming of 1.5°C released by the United Nations (UN) Intergovernmental Panel on Climate Change (IPCC) last year which emphasized that based on current trends, global warming is expected to increase by 1.5°C by 2030 at the earliest, or 2052 at the latest, or within just one generation. Mr. Huang stressed that if humans still do not make any changes, there might not even be a need to think about energy transition after 2030 because the human population will face calamity by then. However, even with such urgency, it is concerning that no presidential candidate in the current race has talked about the circular economy as one of their policy planks, Mr. Huang said.
Mr. Huang pointed out that current conversations are still underpinned by traditional ideas of economic growth and that Taiwan's imagination of the future is still restricted to a model based on how the past was organized. Taiwan's production is still structured along the lines of the linear economy, where producers continue to use an outmoded profit-oriented economic model while chasing after consumer demand. Fundamentally, the economic model is predicated on the calculation of gross domestic product (GDP), where the GDP "measures everything except that which is worthwhile", Mr. Huang said, quoting American politician Robert F. Kennedy's speech. However, development measures should both look at the GDP and at human impact factors, and he pointed to the Human Development Index (HDI) developed in 1990, the Millennium Development Goals (MDGs) agreed upon in 2000, and the Sustainable Development Goals (SDGs) adopted in 2015, as examples of how to do so.
In order to undergo transformation, Mr. Huang explained that the world would therefore need to embark on the 3Rs, (i) to reflect on the relevance of the current economic model, (ii) to redefine the economic model in order to decouple economic growth from resource use, and (iii) to redesign the economic model based on circular economy principles. However, existing laws have been developed based on the old economic model and governments are facing difficulties trying to revise these outmoded laws to enable the adoption of circular economy strategies, as such laws would need to be completely redesigned based on the needs of the circular economy, Mr. Huang said.
Mr. Huang also pointed out that if the economy can be redesigned based on the circular economy model, then the issue of external costs would become relevant. He added that businesses in the present day do not include external costs such as the costs to the environment, in the prices of their goods, but these costs are actually incurred elsewhere. As such, if we were to look at it from another perspective, the budget allocated to the Taiwan Environmental Protection Administration (EPA) would actually constitute external costs that have been internalized, since the EPA's budget is essentially used to ameliorate the environmental effects created by businesses.
Businesses have highlighted concerns about cost increases if their businesses were redesigned for the circular economy but Mr. Huang said that this is a case of comparing apples and oranges, because the issue rather is that current prices are undervalued as they do not include hidden external costs, and thus the circular economy could allow for prices to be rebalanced to include such costs instead. In other words, the circular economy is not more expensive, but rather, the non-inclusion of external costs in the current economic model has led to current prices being undervalued. The circular economy therefore necessitates that the economic model moves away from one that relies on stimulating the economy based on demand and supply perspectives. Consumers and producers should therefore reflect on their roles in perpetuating this cycle i.e. if demand-side consumption patterns change, this will force a change on the supply side. Mr. Huang explained that Patagonia's Worn Wear program is one method in which this is achieved, where the products consumers buy, are provided with a lifetime guarantee, and Patagonia's repair vans would be on hand to help consumers repair products. While the clothes produced are more expensive, they are also guaranteed for life and are less resource-intensive, thereby protecting the environment. Such changes therefore entail mindset shifts which transcend beyond current ownership models, and where producers adopt Extended Producer Responsibility (EPR), to undertake the responsibility to reduce the impact on the environment. Ultimately, the adoption of the circular economy strategy would require a paradigm shift where economic growth is decoupled from consumer demand.
However, in order for Taiwan's corporations to be encouraged to change their business models and to consider the resources they use, a systems approach needs to be developed where laws are revised and other tools adopted, to implement the circular economy, Mr. Huang said. With the investments that Taiwan has made in circular economy, Mr. Huang also believed that Taiwan is well-positioned to take on a leadership role to lead the global circular economy. He said: our society cannot leave today's problems to be dealt with by tomorrow's youths, and there is therefore a need to think 20 years ahead to consider the kind of future we want for our youths, and to plan accordingly for it.
In response to an audience question on how the circular economy can be implemented, Mr. Huang explained that the circular economy strategy should be adopted in Taiwan as a whole, and not as competing strategies between cities and counties. He explained that the implementation of circular economy principles should be planned with a long-term 10 to 20-year perspective, and as a collaboration between the government, industry and citizens. Also, the presence of small-and-medium corporations (SMCs) in Taiwan is also a strength as SMCs would be nimble enough to respond to changes brought on by the digital revolution, while multinational corporations (MNCs) would be too bogged down by their size and would continue to rely on traditional modes of production, thereby making it difficult to transit to a circular economy. Whereas, Taiwan had been a follower in past economic developments, Taiwan's head start can enable it to take the lead in the circular economy, Mr. Huang reiterated.
The event summaries of the other sessions can be found in the links below:
Part 2: Morning Session – Circular Economy Strategies to Overcome Global Warming
Part 3: Early Afternoon Session – Taiwan's Progress in Greening Financial Flows and Energy Transition
Part 4: Late Afternoon Session – Policies and Strategies for the Internalization of External Costs