What is a Circular Economy?
A circular economy is an economic model designed to minimise resource input and waste and emission production. A circular economy aims to reach the maximum efficiency in the use of finite resources, the gradual transition to renewable resources, and the recovery of materials and products at the end of their useful life. Moreover, it targets to rebuild all available types of capital, including financial, human, social, and natural. Essentially, a circular economy describes a regenerative economic system.
A circular economy is an alternative to a linear economy based on a take-make-dispose model. The proponents of this economic model believe that it is a viable option to achieve high levels of sustainability without diminishing the business’s profitability or reducing the number of available products and services. In other words, a circular economy does not intend to simply combat the defects of a linear economy but provides a systematic shift that changes the economic system entirely.
Principles of Circular Economy
The concept is based on three (3) main principles:
#1 Minimization of waste and pollution
The concept suggests minimising waste and pollution by reducing damages from economic activities.
#2 Extension of the useful life of products and materials
A circular economy aims to extend the useful life of the products and materials by creating the loops of the materials and products circulating in the economy. The goal is achieved through the active reuse, repair, and remanufacturing of the products and materials utilised in the economy.
#3 Regeneration of natural systems
The regeneration of natural systems is one of the fundamental concepts of a (circular) economy. It enhances natural capital and creates the necessary conditions for regenerating biological systems.
Technological Cycles vs Biological Cycles
A circular economy involves the critical distinction between technological and biological cycles:
Technological cycles involve the management of finite resources. The resources are extracted and used in multiple economic cycles. This is achieved by reusing, repairing, and remanufacturing materials and resources.
Biological cycles are concerned with the management of renewable resources. Biologically-based materials are designed to be restored into the natural systems and subsequently regenerated to provide renewable resources. In a circular economy, consumption occurs only in the biological cycles.
As climate change takes centre stage, investing in the circular economy is not a may have but a must-have!