Circular Economy Enablers

Closing the Loop: Embracing the Circular Economy

17 July 2023

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Circular Economy Enablers

Written by Rahul Bhushan

Key Takeaways

The current linear economic model, based on resource extraction, production, and waste disposal, is unsustainable and harmful to the environment and human health.

The circular economy aims to prioritise waste prevention and continuous resource use, offering a sustainable alternative. This transition requires rethinking resource utilisation, embracing innovative business models, and learning from industries that have already made progress.

The "R" Strategies and Principles Hierarchy categorises and prioritises circular economy activities. It emphasises reducing waste generation and implementing circular business models such as circular design, optimal use, value recovery, and circular support.

Our current linear economic model, characterised by resource extraction, production and waste disposal, is proving to be unsustainable and detrimental to the environment and human health. In contrast, a circular economy aims to break this linear cycle by prioritising waste prevention and the continuous use of resources. By transitioning to a circular economy, we can address the challenges of resource scarcity, environmental degradation and climate change. In this blog post, we will explore the concept of a circular economy, examine its impact and discuss the strategies and business models necessary for its successful implementation.

Understanding the Linear Economy

To comprehend the concept of a circular economy, it is important to first understand the linear economy. The linear model, also known as the “Take-Make-Waste” economy, relies on the extraction of finite resources, production of goods with limited utilisation and disposal of waste. Although the linear economy has brought societal benefits, such as abundance and poverty reduction, it is no longer sustainable in the long run due to the finite nature of resources and its adverse impact on the environment.

Consequences of the Linear Economy

The consequences of the linear economy are becoming increasingly evident and alarming. A significant portion of the resources we extract is wasted, with only 8.6% being cycled back into the economy.¹ The environmental impact of our linear consumption patterns is reflected in deforestation, waste generation, water pollution and increased energy consumption. Moreover, the linear economy has adverse effects on human health, contributing to air pollution, contaminated drinking water and exposure to toxic chemicals.

Transitioning to a Circular Economy

To transition to a circular economy, we must rethink how we use resources, materials and technologies. Creative destruction, the process of replacing outdated business models with innovative ones, plays a crucial role in driving this transition. By embracing new technologies, materials and solutions, we can reimagine and redesign industrial processes to reduce waste generation and reliance on non-renewable resources.

Examples of Circular Economy Practices

Several industries have already embraced circular economy practices, demonstrating the potential for sustainable change. For instance, the dairy industry is witnessing the emergence of precision fermentation technology, which enables the production of milk proteins without the need for cows. Similarly, advancements in textile production involve synthesising fabrics through microbial fermentation and biomimicry, reducing resource consumption and unethical labor practices. Examples like these highlight the importance of rethinking entire systems rather than simply pivoting to alternatives.

The “R” Strategies and Principles Hierarchy

The Ellen MacArthur Foundation’s “R” Strategies and Principles Hierarchy provides a framework for categorising and prioritising circular economy activities. This hierarchy ranks strategies such as refuse, rethink, reduce, reuse, repair, refurbish, remanufacture, repurpose and recycle based on their circularity potential. It emphasises the need to move away from end-of-life solutions, such as recycling and focus on preventing waste generation through a holistic approach.

Circular Business Models

To facilitate the transition to a circular economy, innovative business models are essential. The Value Hill Business Model Tool developed by Circle Economy outlines four circular business models:

Circular Design: Prioritising long-term value retention through the development of sustainable materials and products.
Optimal Use: Extending the use and lifespan of products, assets, or technologies to maximise their value.
Value Recovery: Capturing value from products at the end of their useful life through recycling and resource recovery.
Circular Support: Providing supporting products and services to enable the other three circular business models.

Conclusion

Transitioning to a circular economy is crucial for achieving sustainable growth and addressing the pressing challenges of resource scarcity and environmental degradation. By reimagining business models, adopting circular design principles and prioritising waste prevention, we can create a more resilient and regenerative economy. The circular economy offers a holistic approach that not only benefits the environment but also promotes economic prosperity and social well-being. By embracing the “R” Strategies and Principles Hierarchy and implementing circular business models, we can foster innovation, reduce waste generation and minimise our reliance on finite resources.

The transition to a circular economy requires a collective effort from governments, businesses and individuals. It calls for a shift in mindset and a commitment to sustainability at all levels. As we continue to explore and implement circular economy practices, we must also strive for continuous improvement and collaboration to overcome the challenges that lie ahead. By embracing the circular economy, we can pave the way for a more sustainable and prosperous future for generations to come.

References

Circularity Gap Reporting Initiative, “FIVE YEARS of the Circularity Gap Report”, 2022. Available at: https://www.circularity-gap.world/2022