On the potentials and hurdles of the Swiss circular economy
Although Switzerland theoretically has all the possibilities for more sustainable and ecological production, this is not yet being implemented. The reasons for this were investigated by the Institute for Sustainable Business at BFH Wirtschaft together with EPB Schweiz AG on behalf of the Federal Office for the Environment (FOEN).
The very large environmental potentials – which cause around 2/3 of the total greenhouse gas emissions – are limited to a few areas in Switzerland. These are food, including agricultural production, construction and housing, and mobility. It is in these areas that we must start if we want to get a grip on our environmental problems. However, there is a need for action not only on the production side. In addition to comprehensive improvements in the economic sectors, significant changes in consumption behaviour (quantity and type of consumption) in our society are a prerequisite for reducing the environmental footprint associated with our lives to a level that is compatible with the planet. In doing so, all three basic approaches “efficiency”, “consistency” and a “healthy degree of sufficiency” must be combined, taking into account indirect effects (up to and including rebound effects). What is needed is a fundamental transformation from today’s linear economic system, which is largely based on cost-effective raw material and energy consumption and subsequent disposal, to a sustainable, resource-conserving system.
The crux of the matter is true costs
However, tapping the environmental potential is not always easy. This is because it is usually not individual hurdles that stand in the way of realising the outlined potential for improvement, but rather complex constellations of hurdles in the existing market and regime structures. Of course, not all hurdles are of equal importance. Probably the biggest hurdle lies in the insufficient true costs or internalisation of external effects, which means that economic incentives for the implementation of sustainable solutions and technologies are currently largely lacking for market actors, but also for consumers. Regulatory hurdles also play an important role. However, the focus is less on reducing overregulation. Rather, the focus is on correcting misguided incentives, restrictions based on a balancing of interests, insufficient enforcement of existing regulations and insufficient legal and planning certainty for market actors. Often, the broad application of promising technologies is prevented by organisational and process-related restrictions and, finally, by a lack of economic incentive structures. In some cases, there are also technological hurdles, as such promising technologies have not yet been developed. Other relevant factors are the lack of application-oriented knowledge for the implementation of sustainable solutions and the lack of awareness among the population.
From “Pflästerli” policy to comprehensive transformation
Due to these multiple hurdles, an overall systemic approach is required, with control at the most diverse levels and at various starting points. Only in this way is a sufficiently effective and rapid change in our current economic and consumption patterns possible. An isolated “patches policy” cannot and will not meet this requirement. Rather, this requires a holistic approach in which different policy areas (e.g. resource, energy, climate, agriculture, forestry, economic, research and innovation and education policies) work together in a coordinated manner and consistently across many, different use cases to achieve the ambitious sustainability goals. In order to develop socially viable solutions, it is best to involve key actors from the entire stakeholder spectrum (e.g. suppliers, producers, consumers, the financial system, politics, non-governmental organisations) in finding solutions and to provide comprehensive resources for the fundamental changes. In this context, the comprehensively defined concept of the circular economy appears to be a suitable guiding paradigm on which the upcoming sustainability transformation can be oriented.
Switzerland has the best prerequisites for a pioneering role
The challenges are manifold and require holistic approaches that would rather have been implemented yesterday than today. But if we as Switzerland cannot do it, who else will? With our innovative and purchasing power, we have the best prerequisites for taking a pioneering role in this transformation and also benefiting economically from the knowledge and practical advantage thus gained. The intensive export activities would also lead to a scaling of the effects abroad and thus create a contribution to global sustainability that goes beyond Switzerland. So far, Switzerland has not yet taken a pioneering role in the transformation. Patent applications are a reliable indicator for predicting the development of new technologies. Globally collected figures for newly filed patents from the Organisation for Economic Co-operation and Development (OECD) show that Switzerland files a relatively high number of green patents, but that the share of green patents in relation to the overall innovative strength is below average compared to other OECD countries (OECD 2022).
Involve all actors
What is needed, therefore, is a long-term rethink by all the actors involved: Politicians, entrepreneurs, consumers, the financial system and civil society must work together on the transformation process. Because one thing is clear: if we want to achieve our globally set environmental goals, we will have to massively adapt the way we do business in the coming years. If we want to maintain our competitiveness as Switzerland in and after this phase, we should rather start this phase with a certain knowledge advantage – or at least keep the current backlog within limits. Sustainable and circular business is the order of the day.
OECD (2022). OECD Green Growth Indicators (database).