Circular economy
In contrast to this traditional linear economy of wastefulness; of extracting, manufacturing, using, and discarding goods, there is the circular economy (in English, it is Circular Economy, CE). A sustainable economic model necessary to achieve the Sustainable Development Goals established by the UN.
It is a new economic paradigm based on three fundamental principles, the famous Three R’s… Reduce, Reuse, and Recycle!
It seeks manufacturing processes that consume little energy, do not generate waste or garbage that impact society and the environment
What is the circular economy
The circular economy is a economic model where the useful life of products and materials is extended by reducing resource consumption and waste production.
How? Based on what is called product ecodesign through the Three R’s:
- Reduce: reduce resource consumption and waste production.
- Reuse: use products for as long as possible.
- Recycle: convert waste into new products.
it is a sustainable economic model that seeks to minimize waste and make the most of natural resources
Goods and services are produced while reducing the consumption, waste, and wastage of raw materials, water, and energy
🟧 Note: The idea appeared in the book by Pearce and Turner (1989) (1) on Natural Resource and Environmental Economics. In fact, chapter 2 of the book is titled “The Circular Economy”.
And what is its objective? The goal is to “close the life cycle” of products to minimize waste and have a lower environmental impact.
To better understand what it is and what the circular economy is for, a small infographic that will clarify the model for us:
It involves a sustainable development, where products should be able to extend their useful life with facilities for repairing them and, finally, closing the loop by being reusable and easy to disassemble.
Differences between circular and linear economy
In summary, we present the following table with the differences between both economic models:
| Characteristic | Circular economy | Linear economy |
|---|---|---|
| Principle | Reduce, reuse, recycle | Extract, manufacture, use, discard |
| Objective | Reduce resource consumption and waste generation | Maximize resource consumption and waste production |
| Benefits | Environmental: reduces resource scarcity, pollution, and climate change; Economic: creates new jobs, drives innovation, and improves business competitiveness | Environmental: generates resource scarcity, pollution, and climate change; Economic: exploits resources, reduces innovation, and harms business competitiveness |
What are the fundamental aspects of the circular economy
As it seeks to minimize waste and make the most of resources. The fundamental aspects of this operation include:
- Sustainable Design: Create products and processes with their entire life cycle in mind, facilitating reuse and recycling.
- Efficient Use of Resources: Maximize efficiency in the use of resources, including materials, energy, and water, to reduce waste.
- Extension of Product Life: Design durable and easy-to-repair products, maintaining their functionality and value for as long as possible.
- Reuse and Recycling: Prioritize the reuse of products and components, and recycle materials at the end of their life to create new products.
- Service Economy: Shift from an ownership model to a service model, where services are sold instead of products, promoting sharing and reuse.
- Renewable Energy: Use renewable energy sources to reduce dependence on fossil fuels and minimize the carbon footprint.
- Closed Economy: Design processes where the waste of one product becomes inputs for another, closing material cycles.
- Innovation and Collaboration: Encourage innovation and collaboration between different sectors and industries to find sustainable and efficient solutions.
- Awareness and Education: Promote awareness and education about sustainable practices and environmental impact among consumers and businesses.
- Policies and Regulations: Implement policies and regulations that support and promote circular and sustainable practices in industry and commerce.
It must be understood that it is part of the new emerging sustainable economic models that offer coherent alternatives to the current system and fight against climate change at its core, where some focus more on caring for people, others on ethical finance, caring for the planet or the environment:
Advantages of the circular economy
This circular model of sustainable economy has multiple advantages over other traditional systems:
- Waste Reduction: Decreases waste generation by reusing and recycling materials.
- Resource Conservation: Lower consumption of natural resources, preserving their availability for the future.
- Emission Reduction: Reduces greenhouse gas emissions by reducing the production and consumption of new products.
- Energy Efficiency: Increases efficient use of energy by reusing and recycling products and materials.
- Promotion of Innovation: Drives innovation in product design and more sustainable business processes.
- Development of New Markets and Jobs: Creates economic opportunities and jobs in the recycling, repair, and remanufacturing sectors.
- Pollution Reduction: Less environmental pollution by reducing the extraction and processing of raw materials.
- Economic Resilience: Increases the resilience of businesses and economies to market fluctuations and resource scarcity.
- Improvement of Competitiveness: Companies can reduce costs and improve their competitiveness through more efficient practices.
- Social Benefits: Promotes sustainable development that can lead to improvements in quality of life and social well-being.
The circular economy has the potential to reduce pollution, protect the environment, and create jobs.
Remember that we have an interesting article on blue economy where we explain its keys and compare it with the so-called green. We already have a clear understanding of the circular economy model but…How does a circular economic system work?
How the circular economy works
The fundamental principle of the circular economy is the use of waste to obtain raw materials for other goods, drastically reducing both waste generation (garbage) and the extraction of new materials and raw materials. Actions that provide benefits to society.
This circular economic process and how it works can be distinguished in the following value chain and focus of the following graphic:
Additionally, within this concept, other principles are encompassed, such as considering the environmental impacts throughout the life cycle of goods, raw materials, and services, prioritizing use over ownership and providing a service over selling a good, repairing damaged products, and finally, reuse and recycling with zero waste!
The implementation of these principles brings a large number of benefits for both the environment and society, as the circular economy also considers social inclusion a key point. Among these benefits of the circular economy are:
- Reduction in the use of natural resources, reduction in waste production, and limitation of energy consumption.
- The circular economy contributes to the creation of wealth and employment in society.
- It allows for a competitive advantage in the context of globalization as it reduces dependence on uncertain external supplies.
- It opens the perspective to sustainable, long-lasting growth that respects the environment.
In the following graph, we can test the advantages, benefits, and objectives of the circular economy that focus on achieving sustainability without losing competitiveness:
As we can see, we are not facing such an easy transformation. As a fact, we published an article about a free circular economy course coordinated by several universities.
What are the reasons to act?
Sometimes, we do not fully understand why it is necessary to apply the circular economy to raw materials and products. To answer this question, the best way – in our opinion – is to provide graphs that objectively support this need that should be implemented in all sectors, both in society and in the business field:
- We have limits in the current economic model. The current economic model has an ecological footprint that is not sustainable, meaning the annual demand for natural resources and goods by the global population is greater than what the Earth can actually produce throughout the year.
- We need to reduce competition for resource exploitation. According to OECD indications, the volume of exploited resources has increased by 65% in the last 25 years.
- We need to reduce economic dependence. For example, on average, the European Union imports a quantity of materials 6 times greater than what it normally exports.
- Reduce the price of raw materials. The price of raw materials is increasing exponentially over time (They have increased by 150% between 2002 and 2010)
- The need to improve the environment and climate change. Literally, the global warming of the Earth is through the roof, as simple as seeing the following graph:
The importance of reusing products and materials
A good development of the circular economic model implies respecting certain principles where products should be thought, designed, and manufactured considering their entire useful life; from transportation, distribution, use, and end of life with “zero” waste.
This implies applying the Multi R concept, which is based on working together and in harmony to; rethink, redesign, remanufacture, repair, redistribute, reduce, reuse, recycle, and recover that energy. (Also see an article of interest with examples of creative recycling)
Achieving this goal will provide us with a series of benefits to society and the environment, and they can also be quantified, for example:
Upcycling as a key piece
A concept that fits perfectly into this circular model is upcycling, which turns waste into new valuable products, thus extending the useful life of materials and reducing the need to extract virgin resources.
Upcycling is a powerful tool to close the life cycle of products and move towards a circular economy.
Benefits of the union between upcycling and circular economy:
- Waste reduction: Minimizes the amount of waste that ends up in landfills, incinerators, or pollutes the environment.
- Resource savings: Reduces the need to extract virgin raw materials, resulting in lower energy and water consumption.
- Job creation: Can become a source of income for many people, creating sustainable businesses and generating employment.
- Promotion of creativity: Encourages creativity and craftsmanship, allowing people to express themselves and create unique objects.
Some examples of upcycling include transforming old clothes into something new, giving new life to old furniture, creating art from recycled materials, renovating and personalizing old toys, etc. We can do a thousand things!
Companies in the circular economy
But if the circular economy brings so many benefits, why is it not stably implemented worldwide? If we are really talking about a sustainable economy.
Part of the answer to this question is that companies on their own may lack information, confidence, and capacity to implement this type of economy, and the linear financial system does not usually offer investments for innovative management models, as they are considered risky and complex. In this way, the economy remains “locked” in the linear system.
The indicators in the circular economy can be tested in the following graph:
The previous graph belongs to a quality report on the circular economy PDF in Spain that can be consulted from HERE.
On the other hand, traditional consumption habits of society also hinder the development of more sustainable products and services. Especially in a situation where prices do not reflect the real costs of manufacturing and where politics does not show a clear economic transition, although they occasionally practice social or solidarity economy.
Despite this, and fortunately, society and politicians are waking up, leading to the existence of increasing legislation and business models aimed at developing an environmentally friendly economy.
Circular economy examples
To delve a little into some circular economy examples, we have explored some infographics that provide clear information about different company actions. Some examples of projects:
- Ecoalf: This Spanish company transforms PET plastic bottles into high-quality textile yarn for making clothing and accessories.
- Urban Rigger: The Swedish company builds modular prefabricated wooden buildings that can be easily assembled, disassembled, and relocated.
- Wasteless Building: This Australian company uses recycled construction materials and biophilic design techniques to create sustainable and energy-efficient buildings.
- Planetary Farms: This company grows fresh vegetables in indoor vertical farms using hydroponic and aeroponic techniques, optimizing water use and reducing the environmental footprint.
- Refarm’d: This Kenya-based initiative transforms coffee grounds into fertile substrate for growing edible mushrooms, generating value from organic waste.
- Precious Plastic: This global network of volunteers develops open-source technologies for local plastic recycling, empowering communities to transform waste into new products.
- Fairphone: This Dutch company manufactures modular and durable smartphones, designed to be easily repaired and upgraded, extending their useful life.
For example, we know that currently around 93% of the materials in a desktop computer – laptops are recyclable using current treatment techniques employed in authorized plants, and a similar percentage for mobile phones.
Knowing that we can reuse a portion of those discarded materials, the company Tragamóvil emerged, which is responsible for giving a new.
Another example we can find is if we look at the large companies that implement circular economy on the materials of their products; from IKEA, Ecoalf, Patagonia, or even Nike in the raw materials used to make their shoes.
That the products we throw in the trash ourselves have an endless useful life seems like an almost impossible feat, but in reality, all we need to do is put in a little effort. A good example is the one we already explained in the article on how to build a plastic recycling machine easily. A fantastic idea from an engineer that left us amazed…
Being more down-to-earth, and at the neighborhood level, we can see some actions to develop a circular economy project, of proximity and responsibility where neighborhood participation is a key point for everything to flow coherently.
The throwaway society is an unfair system at all levels, depleting and polluting our planet while destroying the social fabric of many communities.
Two reference points to learn more from a quality perspective are:
- From the European Union Circular Economy Action Plan entering from HERE in the EU where we will find reference directives and regulations.
- From the leading organization in promoting the circular economy Ellen MacArthur Foundation on their official website where we can learn a lot with videos, reports, etc.
Whether you are a company, the administration, a community, or an individual consumer, you can contribute to this change. All it takes is a little will!
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