The transformation from the WILD to the CLIC economy

At Lombard Odier, we believe that the transition to decarbonisation and the net-zero economy forms part of a larger economic transformation.

Today, we believe our economy is wildly out of control. Our present system has a severe impact on our natural environment and climate change. It is one where economic growth comes hand-in-hand with unpriced negative externalities. In addition, our economy is enormously wasteful.

We extract nearly 97 gigatonnes of material from the planet every year¹, equivalent to over 265 thousand times the weight of the Empire State Building. A small fraction of this material is recycled.

Meanwhile, even the products that we produce from this material sit idle much of the time. Passenger cars, for instance, sit unused 92% of the time². And on top of all this, increasing inequalities are leaving large swathes of the population behind. The bottom half of all adults in the world collectively own less than 1% of global wealth³.

We call this Wasteful, Idle, Lopsided and Dirty economy, the WILD economy, and it is completely unsustainable. To ensure the continued viability of our society and future economic growth, we believe we must fundamentally rethink the way we live, produce and act. To do this, we must decouple our economic growth from its underlying, adverse environmental footprint, and ensure our economy delivers broad and inclusive benefits for all stakeholders in society.

The end goal of this transformation is an economy that is Circular, Lean, Inclusive and Clean. We call this the CLIC™ economy. The CLIC™ economy leverages efficient production and consumption, and the sharing economy; reducing the wasteful accumulation of idle assets. By focusing on the four R’s: Re-use, Repair, Re-manufacturing and eventual Recycling of products, the CLIC™ economy reduces the dependence on ever greater extraction of mineral resources and leverages the substantial value of the materials and components that constitute the products that we so readily discard today.

 

 The transformation from the WILD to the CLIC™ economy

Source: LOIM analysis 2020 based on ¹ Ellen MacArthur Foundation; ² FAO; ³ Circularity Gap Report; ⁴ Credit Suisse; 106.3Gt based on LOIM estimate of extraction of raw materials in 2019 plus recycled materials.

 

Please click here to read the full report. 

 

sources.

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