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    The Circular Economy as an answer to the Jevons Paradox

    One of the most intuitive responses to try and address water scarcity is to become more water efficient and use (or lose) less water. This can run into one of the most widely-known paradoxes in environmental economics, the Jevons Paradox, which describes a situation where increased efficiency drives increased resource use. The Circular Economy may be the best environmental economic solution to deal with the Jevons Paradox.

     

    A simple example is when our electrical devices become more energy efficient, we tend to buy more and bigger devices that consume the same or a greater amount of energy, thus, offsetting potential savings. In water, if we reduce leaks and make our appliances more water efficient, we may find new ways emerge to use that water, in industrial and agricultural use, to support increased urbanisation.

     

    From an environmental economics perspective, water is complicated. Sometimes, it is a renewable resource, but only up to a certain level of demand, and sometimes it is a non-renewable resource. Demand is somewhat elastic, up to a point, but inelasticity sets in pretty quickly.

     

    The principles of the Circular Economy are a way to get away from the jeopardy of the Jevons paradox by ensuring that we continue to use the same resource. We can apply this to recovery of thermal energy in water as well as use of energy and nutrients from wastewater.

     

    This is a theme we are looking closely into, as well as water avoidance and alternatives to freshwater as ways to ‘de-materialize’ and eliminate the use of water in the first instance. Addressing water risk solely by trying to fix the leaky boat that is our current water system may help us plug the scarcity gap in the short-term, but is like rearranging deck-chairs on the Titanic in the medium to long-term.