Most dialogue around reducing carbon emissions focuses on energy; from the molecules that power our trucks to the electrons that power our buildings.

While decarbonizing transportation and electricity generation is critical, those two sources combined make up only around 55% of greenhouse gas emissions.

If we are serious about meeting our 2050 climate commitments and limiting warming to 1.5 degrees, we must also get serious about tackling the remaining 45% of emissions.

How can major energy players support a reduction in these emissions that's positive for both the environment and their bottom line?

My name is Dylan Dickens and I'm a member of our Energy and Natural Resources team at Oliver Wyman, where I have the privilege of advising our clients how best to capture value amidst some of the largest opportunities in our lifetimes.

Transition towards a green economy. New technology. The fourth industrial revolution. We are in a complex playing field full of opportunity and challenges. Capturing headwinds while avoiding pitfalls requires carefully assessing all of the available information and digging deep to uncover hidden value.

See, I think that's part of the reason I love my work so much. I was classically trained as an Archaeologist here in Houston at Rice University. During the school year, I'd be in the hot sun of Memorial Park, sifting through the dirt to find clues. Back then I was working on identifying differences in how soldiers trained for World War I. These days, however, I prefer to spend my time sifting through data instead of dirt, helping large environmental services companies best prepare for the economy of the future.

In our current economy, materials are extracted or grown, converted into a usable product and then disposed of through our robust environmental services industry. While this “take-make- waste” system has worked for years, that other 45% of total greenhouse gas emissions I was talking about, can be directly attributed to the production of materials, products, and food that we use every day.

One solution is to simply reduce our consumption of products, but can you imagine a world with no plastic, no concrete, no red meat? For many, this reduction in consumption is an unpalatable reduction in life quality. For others, it would represent the loss of their livelihood. Factor in aluminium and lithium — both of which are critical to the production of low-carbon vehicles — or steel for wind turbines and cobalt for solar panels.

In short, we need a system that will allow for similar rates of production while substantially reducing both the materials needed and the carbon emitted. A troubling paradox for companies all across the value chain.

This is where I like to talk to my clients about the concept of a circular economy, where products are designed to use fewer materials, and to be used and reused for as long as possible. Then, at the end of a product's lifecycle, it can be remanufactured or disassembled into recyclable materials. These recycled materials are then used at the start of the value chain instead of raw materials, creating a loop.

Reuse, recycling, and remanufacturing are beneficial for both environment and business by reducing raw material extraction costs and their associated environmental impact, but also limiting the total amount of energy and emissions needed to make a product. Combined, these strategies can dramatically reduce greenhouse gas footprints, with some studies indicating up to 40%.

The circular economy represents massive value for companies that can capitalize on it today. Take for example, environmental services. Today, waste collection services boast logistics chains as complex as Amazon, and have direct access to valuable, recyclable materials worth billions. The challenge, and opportunity, is in processing the disposed products into their valuable materials, recertification of these newly recycled materials to be attractive to manufacturers, and the reverse logistics of reinjecting the materials back into the value chain.

I advise my clients that few are as well positioned as waste haulers and recyclers to capture this opportunity. I recommend seeking partnerships with designers and producers of major products to create templates for what can be expected coming in, and out, of the waste stream. These partnerships can be further enabled with technology from remanufacturing, robotics disassembly, and blockchain material passport startups.

We are on the precipice of an exciting and fundamental shift towards a circular economy. Rather than ask “when will the change occur?”, we need to start analyzing the data available today and start investing in solutions and technologies that will allow us to extract value in the new circular economy.

I'm Dylan Dickens, and this is my take on the circular economy.

This transcript has been edited for clarity