For Earth Day 2014, Harry Verhaar talks about how the principles of a circular economy could provide the entire world with the ability to turn on the lights.
A circular perspective from 1970 to today
Since the founding of Earth Day in 1970, we have come a long way along the road to sustainable development. However, we still have a long way to go. In various ways it is good to take a bit of a ‘circular’ perspective on this. Who remembers that Earth Day was born during a time when American cities were buried under smog and rivers caught fire because of pollution? And how many cities are facing similar challenges today?
Clearly, ‘switching off the lights’ will help a little, but that mostly serves as a call for action to those of us who are able to switch off the lights. We need to change the paradigm of economic growth and prosperity if we wish to not only keep the lights on for most of us, but also switch them on for the first time for the 1.3 billion people on this planet who don’t have access to electric lighting.
A new paradigm of prosperity
The new paradigm of prosperity is a ‘circular economy’, one that moves away from the current linear ‘more is better’ way of doing things, obsessed with GDP as the linear indicator for progress. It should be noted that GDP has risen by 40% in the USA alone in the past 20 years, but are distinctively less happy. So, what is so promising about a circular society? A circular economy has a wide range of benefits, a key one being that it allows us all to switch on the lights, and much better lights at that, while we move forward in this 21st century.
In a circular economy we close product loops and recycle materials instead of throwing these away, thus making our products and services more economical while improving the quality of our living environment. Yet a circular economy is so much more. The essence is that we move away from a focus on individual products (their price, efficiency and how to shift boxes to consumers) to a focus on what really matters: optimizing the actual service that we receive at lowest overall cost (or if you will, to ‘better is best’).
The circular economy in the world of lighting
Let’s have a look at the example of lighting where we are truly in the midst of the ‘LED Revolution’. With the massive global phase-out of inefficient lighting and the switch to LED lighting, we see all aspects of the new circular economy at play. We are moving from analog ‘dumb’ lighting to digital and intelligent LED solutions. At the same time we are shifting from a focus on individual product efficiency to one where lighting interacts within its eco-system in buildings and cities. Similarly we see a move from buying ‘bulbs’ to leasing lighting as a service.
All in all we see that this paradigm shift takes us from a focus on the price of a bulb where cheap is king, to the cost of lighting where higher efficiency reduces your electricity bill, to the value of light: a status where through intelligent and connected LED solutions, we create and enjoy better services like safer city environments, more productive workplaces (without having to work harder) and more attractive and versatile ambiences at home or when otherwise enjoying time off.
Connecting the dots in a circular economy
Is the circular economy a futuristic model? Will some of us have to wait another few decades before being able to switch on the lights? The good news is that although a lot of work still needs to be done, the shift to a circular economy is taking place today. On a global level, the switch to ever more intelligent and connected LED lighting is estimated to reduce global electricity consumption by lighting by €100 billion ($130 billion) in 2020 compared to 2006. This is a target likely to be met, even while taking into account an anticipated double-digit growth in lighting use resulting from population growth, urbanization and the growth of the middle class.
Furthermore, Philips is working together with many public and private stakeholders in advancing energy efficiency of all appliances and buildings. Here, an increase in energy efficiency achievements from 1% per year to 3% per year is estimated to save a staggering $5600 billion in 2030 - a little over half annually in reduced energy bills, and a little below half in reduced power plant investments. This offers great potential to reduce public budget deficits, as well as create jobs through the process of infrastructure renewal. In essence, smarter circular resource management is not only the best medicine that our hampering economy needs, it is the best vitamin for the 21st economic model of prosperity.
Circling back to switching on the lights
In the world of lighting we see a growing number of exciting examples of ‘circularity’. A fast growing number of cities are switching to connected LED lighting. Recently, Philips agreed to convert most of the street lighting in the city of Buenos Aires. 70% of the city’s lighting is switching to LEDs, saving the city over 50% in energy while creating a safer and more livable city, with the energy savings financing the project. This is one – albeit one of the biggest – of some 190 projects Philips has implemented with CityTouch in 27 countries in the last two years. Similarly, Philips has seen a fast growing number of projects in offices, shops, industry as well as in people’s homes. A final and very inspiring example is given by Philips’ Community Light Centers in rural areas, where solar-LED solutions lengthen the day for communities. This allows such villages to offer healthcare to women and children or start-up small economic activities, and means that children can do their homework in the evening.
Going circular from Earth Day 2014
It is my belief that we can have all lights switched on when moving to a circular economy. Though many of the challenges we face are huge and require urgent action, this is not a ‘reductionism’ agenda. If we take the smarter course of action, it offers a wide range of opportunities. What would you do or advise to accelerate the transition to such a circular economy?