What is a circular economy and what does it mean?

By 7 June 2021 No Comments

What is the circular economy? This question is being asked more and more whether it be scholars, shareholders, stakeholders, governmental institutions, other practitioners and consumers; when searching however for “the answer” often more questions arise and that is why this article is so relevant.

Knowing the definitions of the circular economy is essential, as the definition that is used will impact the final results obtained towards circularity. The meanings of what a circular economy is vary greatly. There are more than 114 definitions of the circular economy which were analysed by the Innovation Studies Group, Copernicus Institute of Sustainable Development, Utrecht University, The Netherlands in 2017.
The results of this research indicate that the circular economy is most often described as a combination of reduction, reuse and recycling activities, while often not emphasizing that in order to attain a Circular Economy (CE), systemic change is really needed. Indeed, business models and consumers are often not presented as catalysts for the circular economy which is a mistake. Moreover, important to note is that only a few of these 114 official definitions used actually explicitly show the connections between the concept of a circular economy and sustainable development(s). What is concluded is that the main goal of the circular economy is emphasized on its economic prosperity, followed by environmental quality whereas its impact on social justice and future generations is barely mentioned; this in contradiction with The Paris Agreement built on the UN Framework Convention on Climate Change 2015 and its 17 Sustainable Development Goals.

Mostly what is understood of CE is that in its simplest forms it encompasses recycling with at the end of the spectrum the United Nations Sustainable Development Goals (SDGs), thus making anything in between seen as more or less circular. The framework used is often based on: The 9R Framework. Source: Adapted from Potting et al. (2017, p.5)

To us, at its core, a circular economy model has the intention of designing out waste. In fact, a circular economy is based on the idea that there is no such thing as waste. In order to achieve this, products are designed to last (good quality materials are used) and optimized for a cycle of disassembly and reuse that will make it easier to handle and transform or renew them. In the end, these tight product cycles differentiate the circular economy model apart from disposal and recycling, where large amounts of embedded energy and labor are lost. The ultimate goal is to preserve and enhance natural capital by controlling finite stocks and balancing renewable resources flows.

One of the main meanings of the Circular Economy that is mostly used, is to have a positive effect on the planet’s ecosystems and fight the excessive exploitation of our natural resources that are getting scarce. However this is based on a false sustainability mentality/believe within a linear economy putting the focus on eco-efficiency, which means that the ecological impact is minimised to get the same output, unfortunately still extending the period in which the system becomes overloaded. Now the main meaning of the Circular Economy that is truly based on sustainability is sought in increasing the eco-effectiveness of the system. Thus, not only the ecological impact is minimised, but the ecological, economical resilience and social impact is actually positive. When the focus is set on eco-effectivity to create a positive impact, the ecological, economical and societal systems are strengthened by using them.

A concrete example is the fact that the CE uses renewable energy that in the long run will greatly impact our global environment and living. By reusing, refurbishing and dematerialising; fewer materials and production processes are needed to deliver high quality products and services as residues are seen as valuable and thus absorbed as much as possible into the reprocessing of the products and services. Hence, the CE closes the cycles of all these raw materials. Closing these cycles requires much more than just recycling. It changes the way in which value is created and preserved, how production is made more sustainable and which business models are used.

Most of what we see is designed for the linear model. We need to redesign our systems with circular economy principles in mind, not just products but even business models and cities too!

Team Greenable.

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