the circular economy explained

Much of the economy in the industrialized world is dependent on cheap and easily-available resources as well as fossil energy. Such a dependency is largely grounded in the belief that continuous economic growth is not only possible but also necessary. Accordingly, consumption is intended to perpetually expand. The products generated by such a system lack the durability of products from previous decades as they are not designed to last, rather they are designed to promote consumerism. In turn, massive amounts of waste are generated as a part of a ‘throwaway’ society that is always searching for the next new thing, regardless of need or whether the same old thing is still perfectly good. The waste that is generated by the norms associated with a linear economic system is then poorly managed – ending up in landfills, the ocean, or burned. However, new economic strategies are being developed in order to more intelligently use existing resources.

One strategy is the implementation of a circular economy, which is an industrial system that is designed to remove waste from the system and to promote regenerative or restorative practices that encourage the use of superior design, materials, products, systems and business models in order to encourage a shift towards the use of renewable energies and the elimination of chemicals that negatively impact the environment. The practices employed are designed to optimize a system rooted in a cycle of disassembly and reuse that go beyond both disposal and recycling in order to avoid wasting the energy and labor typically lost in a linear economic system.

Within a circular economy, the components are differentiated between consumable and durable components of any given product. There is an attempt to integrate non-toxic or even beneficial biological replacements for the non-durable components so that they can safely be directly reintegrated into the environment or via a cascade of uses. The durable components in a circular economy are designed to be reusable or upgradeable – dependent on the type of technology associated with the product. By taking such steps, economic systems become more resilient and less resource-dependent.

Similarly, in a circular economy, the concept of users replaces that of consumers. In turn, new types of contracts that are more long-term in nature and based on reputation can emerge. Such contracts can be tailored to the needs of both consumers and businesses. It is also possible for manufacturers or retailers to remain the owners of the rented or leased products. In turn, the owners would be responsible for maintenance costs which would encourage the development of longer-lasting products of better quality. This form of benefit has the potential to be particularly important because prices are predicted to rise as competition for resources intensifies. The energy required to manufacture new products is augmented and valuable resources can be reserved. Common examples of items in a circular economy include car sharing services and cellphone contracts that encourage trade-ins.

sources:
https://reports.weforum.org/toward-the-circular-economy-accelerating-the-scale-up-across-global-supply-chains/from-linear-to-circular-accelerating-a-proven-concept/
https://www.ellenmacarthurfoundation.org/circular-economy