What is the Circular Economy and how can it help?

Published by Catherine O'Toole on March 20, 2017March 20, 2017

20th March 2017

The EU has been making moves towards a circular economy. Recently they voted to back legislation which aims for at least 70% of municipal waste to be recycled, and food waste to be reduced by 50% by 2030.

Businesses, governments and public sector organisations are also working to achieve the elusive circle. But what exactly is the circular economy? How does it differ to what we have now and how can changing to it help?

What we have now: the linear economy

At the moment our world functions through a linear economy. Simply put, this is the mode of production and consumption that we currently engage in; we take raw materials, create products from these materials, use them for a limited time, then throw them away when they reach their end of life.

Within this there is some recycling and some reusing of materials and products, but not enough to make a huge change to this economic model. For instance, only 12% of the total 300 million tonnes of plastic that we produce every year is recyclable. This leads to huge amounts of plastic waste ending up in landfills.

Another example of the waste created today, in part by linear economy, is food waste. According to the European Commission roughly 88 million tonnes of food is wasted annually in the EU, with associated costs estimated at 143 billion euros.

With our growing population, our use of non renewable resources and the effect our discarded waste is having on the planet, a circular economy could provide a better model for our production and consumption needs.

What is the circular economy?

A circular economy aims to create products that don’t have an end of life. Products are designed to be repaired, components to be reused or recycled. Production processes are designed to use waste materials from one sector as raw materials for another.

There are some aspects of this model already accepted as common practice; buying second hand clothes or furniture, recycling glass and textiles, or repairing cars, bicycles and computers when some part gives up the ghost. People are naturally moving towards certain circular principles as practical and sustainable choices. However the systems of production and consumption currently in place cannot achieve the true potential available through a circular economy.

This is where governments and businesses need to (and already are in some cases) step in to make changes among higher levels of production.

What will a circular economy look like and how will it help?

In order to come close to the massive potential that this model can achieve, it is necessary to aim high. If we look at the end goal we can measure our progress towards it. With this in mind, what would a world in which governments, businesses and local organisations who have successfully implemented a circular economy look like?

In an opinion published by the European Economic and Social Committee (EESC) when discussing the Circular Economy Package, it was noted that “circular economy policies should ensure that circles are long-lasting, small, local, and clean.” This gives a good view of the types of policy that a healthy circular economy will put in place.

The first step in implementing the circular system is design. Existing businesses would get redesigned, while others would evolve from the new needs for sustainable products and practices. The economy would function better if the repair industry was local to the customers, so new small scale companies would spring up, creating local employment, likewise with the recycling industry.

Products will be manufactured with the circle in mind. Production will include refurbishing and will take packaging into account. Minimising packaging will likely be a huge component of this, as presently there is a huge amount of excess packaging that can only go straight to landfill.

Distribution includes reselling goods second and third hand, but remember, they will have been made to last. If they do break then it is easy and cost effective to repair them. If they are being scrapped completely, then they are taken apart for parts which are sent back into the cycle. What is now considered waste would be seen as valuable materials, and so the waste that is created in this system is minimal. The circle is now closed.

This system is about sustainability. It will take us away from non-renewable practices. It encompasses the evolution of renewable energy sources and aims to use the resources we have efficiently.

How do we get there?

Sectors that the circular economy will effect are all encompassing. It seems almost too big to imagine, like the dream of some perfect world. It will be a long process to get there, and will change not only how we behave, but how we think about the physical items around us. It won’t happen in a day; like all good things it will take time. So how do we get there?

Transition to a circular economy can be approached form three sides; business, government and consumer.

For businesses, changing to a cyclical model is a good practice for long term survival. Businesses are already seeing the reduction in classical raw materials affect their production costs. The consumer is also becoming more environmentally aware and more willing to spend a little extra for a product which lasts longer and consumes less energy. This means that there is an opportunity for companies who are providing sustainable solutions to flourish. A company can now sell their sustainability, with the more eco-friendly becoming the most sought after.

The EU and local governments play a huge part in putting policy in place which will encourage business practices onto the cyclical path. With policy, large scale businesses will have to adapt to new measures such as packaging which suits the market, and labeling which gives information on the life expectancy of products. Education and training would be provided to facilitate the adaption of workers. and emerging businesses will be given the space to evolve and grow into gaps in the new markets. There are many difficulties that will be faced during the transition that effective policy introduction can help keep under control.

It’s not just about governments and big businesses making changes. We are all a part of this economy, and our behaviours will direct the course of large scale decisions. Our behavioural changes are fundamental in the successful implementation of industrial action. Our choices as a consumer, the effort that we put into recycling, the innovative businesses that are emerging such as creators and suppliers of eco-friendly products, and those involved in local environmental concerns all play a part in raising environmental awareness and assisting larger scale change. These actions are the beginnings of sustainable practice, and as businesses and policy changes, it will simply make it easier to continue good practices and to improve on them.

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