Achieving the Circular Economy via the Fluidity System Andrew James Fynn, Ecosystem Economist

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fluidity

Is The Circular Economy Needed?

If you had to design the Industrial Revolution, the design brief would be

Create a system of production that:

Puts billions of pounds of toxic material into the air, water, and soil every year Produces materials so dangerous they will require constant vigilance by future generations Results in gigantic amounts of waste Puts valuable materials in holes all over the planet, where they can never be retrievedRequires thousands of complex regulations–to keep people and natural systems from being poisoned too quickly Measures productivity by how few people are working…etc.

Cradle to Cradle, Braungart & McDonough 2008

How Can We Achieve Circularity?

We live in a world of finite resources

We are a responsive species

We have the technologies and the intelligence to solve the problems associated with achieving circularity (cradle to cradle)

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Challenges and opportunities on the path to achieving circularity:• habits, cultural, institutional, educational• proof of concept, peer pressure and leadership• economic barriers and challenges

These can all be addressed through a single system - the largest one we share: the economy

Transform Not ReplaceWe are all dependent on the status quo

The status quo is intolerable We have to arrive at a very different place

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The way to get there is not to throw away the current system

GDP currently measures activity, not benefit

Transform the currency and you transform the economy

It is to transform it

• What you can predict you can improve.

• We need to stabilise but also improve the current system.

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Hybrid System Needed

• Thus we need a new system that transforms the current one into one that is circular, sustainable - on every level. That gives us a hybrid.

Let’s give the economy a brain.

What Does This System Look Like?

• Nature achieves huge change on a tiny scale

• This change is multiplied up millions of times

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• Why not do the same thing for an economy - Change the nature of the transaction

• Use the economy to change the economy

Current System - How Did We Get Here?

• Those responses are not integrated • It has not been designed in the present for the future

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• Current economic system is patchwork

• Made of past responses to past situations

which no longer exist

• It does not make use of systems now available in a joined up way —

• Big Data and ICT

For The First Time In Human History

• Create a purely digital currency

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• Incentivise the flow of money • No risk of counterfeiting • We can understand this currency better than any

other in history • And we can use it to create the circular economy

Shifting Our Incentives

• Why do you spend money? • Why do you make any decision? • We have incentives in one direction and incentives in another • These form the decision-making landscape

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• The net balance of incentives determines which option is chosen

• Our decisions follow predictable patterns: it is possible to stacking the decision-making landscape with short term incentives aligned with the long term good

Gearing• Each transaction in the system has has two components:

Fluidity + National currency • The Fluidity currency is geared to the national currency • This ratio used is the Gearing Ratio • Gearing ratio is set by the seller (allowing innovation) • Buyers receive credits at little or no cost • Buyers save money by using Fluidity • Sellers make money by using Fluidity to increase business

and leverage higher income • Only products and services with higher embodied

circularity can participate

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AccumulationThere is something else you can do with a digital currency: You spend 10 credits, the seller receives 11 credits. An auto generated increase. This provides organic growth of the system …and rewards participation This is the Accumulation Ratio It is set by the governing agency

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EvaporationAnother feature to accelerate circularity outcomes Money is more valuable to the whole when it moves faster (velocity) Incentivise velocity by reducing the value of stagnant credits, along a curve This feature is Evaporation Evaporation and other factors can be adjusted by sector, region, time and other conditions

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The Ecosystem EconomyThe onward flow of credits stimulates further movement of national currency Credits flow from one sector to the next

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Improving circularity in the supply chain Incentivising circularity by positively affecting expectations positively affecting behaviours

Big DataFluidity provides a vast number of data These are not just read-only data They are hands onto the economy Suddenly we are no longer blind operators of the most powerful machine on Earth

16(c) Fox Corp. 2009

Sharing Best Practices

Thus the economy improves Sustainability can no longer be said to be the most expensive option

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The value of these data to sellers is greater than the value of keeping best practices to oneself.

Sharing best practices is incentivised - within and across sectors

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‘Wealth’ defined as the ability to obtain the things you need and desire As innovative uses of credits are found, cash + credit incomes increase beyond the baseline The new momentum drives the transition to the circular economy

Threading The Needle

Feedback Loops & Snowballs

• Over time there is ever greater sophistication, responsiveness and scale

• Fluidity becomes a more and more powerful engine for change

- for sustainability in a truly holistic sense • Each of the variables available for adjustment

represents another dimension in facilitating change

• The algorithm used works in the same way as an ecosystem model, self-improving

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Summary

• The more inclusive an ecosystem, the more beyond sum gains realised

• The intelligent economy is the collaborative economy

• The system will only get smarter • There is nothing to stop us from greatly

accelerating circularity • We should do that

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Join us on social media

Check out the information provided via the links

Make Fluidity a point of discussion in your community, business or sector

Write to your government representatives asking them to adopt Fluidity

Email me with any further questions

If you are in a position of influence, contact me

Also email for newsletters with the progress of Fluidity

Next Steps

Be Social• Email FluidityEconomic@gmail.com • Like facebook.com/FluidityEconomic • See papers and this presentation at scribd.com/andrew_fynn_1 • This video at bit.ly/1LFtIj4 • Blog: fluidityeconomic.blogspot.co.uk • twitter.com/AndrewJFynn • Google+ page: bit.ly/1QSkovI

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