Transition To A Circular Bioeconomy Requires Getting Prices Right

MADHU KHANNA

URBANA, ILLINOIS

Conventional food and agricultural production systems employ a linear “take, make, waste” approach: taking natural resources from the Earth to make food and fuel, generating waste that contaminates the soil and water, and emitting harmful pollutants.

More recently, a new model of production is gaining traction in the scientific and business community: a “circular bioeconomy” that reduces and recycles waste, transitions away from fossil fuels to renewable bio-based alternatives, and regenerates natural systems. This approach is critical for feeding and fueling the world’s growing population in environmentally sustainable ways.

But it’s a complicated concept, and significant questions remain: How should waste reduction be implemented? How far should we go in being “circular,” considering its costs and benefits? And how can a circular bioeconomy system get buy-in from farmers, industry, and consumers in a market economy?

A new paper by noted agricultural economists and scientists argues that the concept of a circular bioeconomy needs to expand beyond its technical focus on reducing waste and incorporate a values-based economic lens. Lead author Madhu Khanna, professor in the Department of Agricultural and Consumer Economics, and her co-authors emphasize the need for the right policies, incentives, and market signals to persuade consumers and producers to make environmentally sound decisions – and to help ensure that the system is equitable.

Read more from the Institute for Sustainability, Energy, and Environment.   ∆