top of page

Circular Economy

Conventional economies that follow a linear model of production, consumption, and disposal have caused severe harm to both human well-being and the natural environment. However, the circular economy model possesses the capacity to initiate extensive transformation and propel the globe towards accomplishing the Sustainable Development Goals set by the United Nations. Although the current method of promoting economic growth has resulted in significant waste and benefited only a small portion of the population, adopting a circular model might view waste as a design error and foster more widespread and equitable systems. In essence, it presents a chance to reconsider, revamp, and reimagine economies in order to more effectively meet human requirements and optimize the utilization of natural resources - and its relatively early stage makes it very conducive to innovation.

Circular Economy

A New Understanding of Economic Growth

Modern economic growth models prioritize people and ecological systems, fostering sustainable economies. Traditional economies, characterized by their linear, extractive nature, have yielded economic growth and reduced extreme poverty – as reported by the World Bank in 2015 with a record low of 10% global extreme poverty. However, these models pose significant risks to biological and cultural diversity, intensifying resource exploitation, and leading to resource shortages. The benefits, often unequally distributed, revolve around continuous resource extraction, resulting in unsustainable cycles of temporary abundance and scarcity.

Understanding how a circular economy can disrupt the linear, extractive economic models is vital. The United Nations supports this shift, aligning it with Sustainable Development Goals (SDGs) to guide the global economy towards sustainability by 2030. A circular economy reduces resource extraction, regenerating materials for continued production, and contributing to various SDGs. These include sustainable consumption (SDG 12), water and sanitation access (SDG 6), sustainable economic growth and work (SDG 8), sustainable cities (SDG 11), climate action (SDG 13), ocean conservation (SDG 14), land restoration, biodiversity loss (SDG 15), and reducing inequality (SDG 10).

Circular Design

Circular design targets environmental and social issues at their root, contrasting with traditional economic models designed for consistent profit through resource exploitation. These models influence manufacturing, consumption, and disposal, leading to practices like incineration and landfilling. Design decisions determine an item’s lifecycle, including its potential for sharing, repair, recovery, remanufacturing, and composting. Designers, guided by their organizations, corporations, and governments, must align their work with circular economy principles. This involves considering material selection, assembly methods, and future adaptability.

Organizational decisions shape product and service design, affecting waste generation and consumption patterns. Innovative models like sharing and incentivized return demonstrate alternatives to selling products. The design phase's consequences, like the pervasive impact of plastic, underscore the need for circularity principles in initial design stages. These principles can improve product quality, customer relationships, and resource efficiency, addressing broader economic, social, and environmental challenges.

Technologies Enabling Circularity

The Fourth Industrial Revolution, marked by IoT and AI, propels the global shift towards a circular economy. These technologies change economies by enabling virtual work and enhancing product and material transparency. Enhanced data collection and analysis identify issues in material movement and waste, improving decision-making. Industries like aerospace and transport use sensors for equipment monitoring, aiding in maintenance, safety, and uninterrupted operation.

Global businesses are adopting circular strategies using AI to design long-lasting, reusable products. AI optimizes material selection and manufacturing processes and supports circular business models like car sharing by improving demand forecasting and maintenance. Bike-sharing services benefit from AI in predicting real-time bike demand and availability. AI also bolsters infrastructure resilience and optimizes logistics in recycling and remanufacturing. However, AI's potential in enhancing circularity is still under-explored.

A Regenerative Food System

To develop regenerative food systems, identifying the flaws in linear systems is essential. The Ellen MacArthur Foundation's 2019 study highlights the biodiversity and health risks of current food production, incurring $5.7 trillion in annual costs globally. Circular models in food production can enhance the environment and provide nutritious food. Wageningen University & Research advocates principles for circular agriculture: prioritizing plant biomass for human food, recycling food production by-products, and using non-edible biomass for animal feed. Cities, consuming 80% of food by 2050, can lead the shift towards regenerative systems by promoting local, sustainable food, minimizing waste, and offering healthier options.

Circular Finance

The financial sector can support the transition from linear to circular economies. Facing new environmental regulations and demand for strong ESG principles, finance can shift investment from extractive industries to sustainable practices. Sustainable investing assets, according to the Global Sustainable Investment Alliance, reached $35.3 trillion in 2020, indicating growing interest in environmental and social considerations. The finance sector can encourage circular transitions through tailored financial solutions and a deeper understanding of circular business risks and rewards.

Circular Business Models

Transitioning to circular models involves designing for durability, sharing, and reuse. Current manufacturing practices often result in resource loss, contrasting with circular models that focus on resource replenishment. Businesses can impact circularity by prioritizing product longevity, sustainable design, maintenance, repair, and refurbishment. Access-based models, like car-sharing services and clothing rental libraries, extend product life and offer consumer benefits. For instance, the New York Public Library offers professional attire for job interviews, and LENA in Amsterdam provides a clothing lending service. Businesses are evolving from selling products to providing access to services, aligning with circular economy principles.

A Circular Economy in Cities

Urban areas, consuming vast natural resources and generating waste and emissions, can transform through circular economy practices. By 2050, two-thirds of the world's population will be urban, intensifying the need for sustainable resource use. Circular cities can boost economic and environmental well-being, create jobs, improve air quality and public health, and foster social engagement. Implementing circular models requires rethinking urban planning, construction, and adaptation, including adaptable, modular buildings and waste-free construction technologies like 3D printing. The sharing economy, enabled by digital technologies, can promote community connections and resource sharing.

A Systems Perspective on Circular Change

Achieving sustainable consumption requires systemic change, addressing the core issues rather than just the symptoms. Collaboration among producers, retailers, and governments is crucial to coordinate circular processes. In sectors like textiles, food, and plastics, extensive cooperation can establish regenerative cycles and change consumer habits. Collaborative strategies are essential to efficiently produce, use, and recycle materials, integrating diverse social and ecological systems within economies. This approach necessitates decentralization, interconnectivity, and collaboration between businesses, governments, and communities for a circular economy.

bottom of page