Scientists and climate activists are clamouring towards a more sustainable planet, as the world starts to experience the devastating and fatal effects of climate change. And the need for change is now- as the world population surpassed 8 billion last year, our food system continues to drive biodiversity loss and threaten 24,000 species to extinction, and about 924 million people are facing food insecurity despite enough food being produced.

With these problems in mind, the term circular economy is thrown around, touted as an effective solution to our unsustainable way of living. But what is it and what benefits does it offer our planet?

The Beginnings of Circular Economy

The circular economy is a concept that has been gaining traction in recent years as a way to create a more sustainable future. It is a systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution. The circular economy is based on three principles: eliminate waste and pollution, circulate products and materials, and regenerate natural systems. The idea is to create a closed-loop system where resources are kept in use for as long as possible.

The concept of the circular economy has been around for a long time, and it has evolved over the years. It cannot be traced back to a single author or date, but rather to various schools of thought:

• In the 1960s, British economist Kenneth Boulding argued humans have to find ways to recycle resources because the Earth has limited materials and capacity to endure pollution and resource extraction.
• In the 1970s, the Club of Rome put forward the “Limits to Growth” concept, which states that humans can only survive if we control production and consumption.
• Meanwhile, the Cradle to Cradle concept, proposed by German chemist Michael Braungart and American architect Bill McDonough, considers all materials in production as new resources for something else. The idea of eliminating waste is also in other schools of thought that brought life to the circular economy like Industrial Ecology and Blue Economy. 
• Architect and economist Walter Stahel maintained the importance of selling services rather than products, also known now as the Performance Economy.
• On the other hand, american science writer and innovator Janine Benyus popularized the term Biomimicry in her book where she posited that all human challenges can be solved by reproducing nature’s patterns and strategies.
• John T. Lyle’s Regenerative Design idea aims to create restorative systems that would benefit society while considering the integrity of the environment.

Unpacking its Principles

The whole idea of the circular economy is to get away from the current linear economy, also known as the take-make-waste economy. In this system, resources are used to create new products that only end up in landfills because they are not used to their full potential.

The linear economy first came about during the industrial revolution, when raw materials seemed infinite and the new products manufactured led to the economic growth of so many countries. But this global development eventually led to the degradation of the environment’s natural systems. And until today, the continued mismanagement of resources is destroying and polluting the planet and driving climate change and biodiversity loss.

Another reason the world needs to transition to a circular economy is the planet’s biocapacity or the ecosystem’s capacity to produce the resources we need and absorb the waste we generate. Because once an area’s ecological footprint exceeds its biocapacity, is when unsustainability happens.

The concept of biocapacity is significant to a circular economy to ensure that humanity is sustainably using the planet’s natural resources, allowing the environment to regenerate and continue meeting our demands. By designing systems that prioritize circular practices—such as recycling, reusing, and reducing waste—our activities will be better aligned with the Earth’s biocapacity, so future generations can enjoy nature’s resources the way we do today.

One way to ensure we do not overwhelm the planet’s biocapacity is through the process of decoupling. The Organisation for Economic Co-operation and Development (OECD) defined the concept of decoupling as “the process of separating economic growth from associated negative environmental impacts. In other words, it is to do things more efficiently”. There are two ways to practice decoupling: (1) relative decoupling where we use resources effectively and our environmental impact is less in relation to the economic growth, or (2) absolute decoupling where we use fewer resources overall while the economy still grows.

All economic growth increases waste production. So in a study on decoupling waste generation from economic growth, Sjöström and Östblom (2010) stated that it is not enough for us to rely on technical solutions like recycling, recovery, and remanufacturing to solve our current waste and consumption problem. What we need is to focus on non-technological strategies such as reuse, upcycling, reclaim, and repurpose to achieve absolute decoupling, which Chatterton and Style (2001) describe as the middle ground between economic growth and waste reduction to protect the planet. 

Benefits vs. Misconceptions

There is a great reason why transitioning to a circular economy is being touted as an impactful way towards sustainability- the various benefits it can offer:

1. The circular economy champions sustainability through three principles: putting an end to waste and pollution, circulating products and resources, and regenerating the environment. To achieve this, products need to be redesigned so they can be used longer, reused and remanufactured, and eventually be recycled.
2. For businesses, a circular economy can help reduce the costs of buying new material while consumers will be able to have access to more durable products at a much lower price.
3. A circular economy would also give rise to more job opportunities, not only in waste management, repair and maintenance, and recycling, but it would also boost innovation and entrepreneurship as new business models would be needed to support circular practices.
4. It is also estimated that adopting a circular economy can generate up to €900B by 2030. Meanwhile, it also has immense economic value in terms of reduced costs due to climate change because of lower GHG emissions and decreased spending in healthcare due to les pollution.

Despite all these merits, many continue to question the feasibility of the concept. Although some critiques of the circular economy can be considered valid, there are those misconceptions that just completely miss the mark of what the idea is all about:

• Circular economy is for developed countries only- developing economies will continue to fall behind.

The truth is developing countries have various ingenious strategies, techniques and practices that developed economies can learn from and adapt. A circular economy needs a massive rethinking of current systems, which could result in developed countries facing greater resistance.

• It’s all about recycling.

Although recycling can help reduce the extraction and use of virgin resources, this should be the resort in carrying out a circular strategy, as other initiatives should be prioritized like caring, repairing, and reusing.

• The circular economy is only about resource efficiency.

Efficient production is indeed a critical part of a circular economy. But the most impactful strategy in waste management is refusal- challenging which products need to be manufactured in the first place.

Circular Economy Policies

Given the various benefits we can reap from a circular economy, national leaders have developed and implemented policies championing this sustainable system. The European Union, for example, adopted the Circular Economy Action Plan in 2020, which aims to make the region a circular economy. The plan ensures that products are more durable and repairable, and that consumers are empowered to make more sustainable choices. It also targets key sectors that use the most resources like the electronics and batteries industries, plastics and packaging, textiles, and building and construction.

Meanwhile, the UK has developed its Waste and Resources Strategy with the goal of becoming a leader in using resources efficiently and reducing waste it generates as a society. The plan covers a host of subjects including innovation, sustainable production, resource recovery, waste crime, and food waste.

In the US, the Extended Producer Responsibility (EPR) legislation is emerging, where producers are required to fund programs to collect, recycle or manage packaging. Currently, only four states have passed EPR laws (California, Oregon, Maine, and Colorado) but more are expected to join the list with more than 30 EPR and packaging bills introduced last year. 

Case Studies

Ecovative’s mycelium packaging for Hudson Hemp’s Treaty CBD

Exciting advancements in our economy are unfolding at the intersection of material science, business models, and digital technologies. Some of us have already witnessed – and maybe even used – products and services ingrained with circularity. These incredible companies are ushering in innovative forms of value and are contributing to the mitigation of environmental and social challenges.

California-based company Trove helps fashion brands like Canada Goose, lululemon, and Patagonia to buy back and resell used items. Thanks to its platform, Trove is able to create a new source of revenue for companies and extend an item’s life through many more uses.

In the world of packaging, New York-based Ecovative is introducing an innovative packaging solution using mushroom roots or ‘mycelium’. Their eco-friendly product has the protective properties of polystyrene packaging but it does not contribute to the millions of plastic pollution worldwide. Today, Ecovative is supplying a growing list of Fortune 500 companies with its sustainable packaging solution.

London-based foodtech company Winnow has created an innovative response to the growing number of food waste generated each day. With its easy-to-install technology, clients are able to identify what foodstuff is usually discarded and how much. Insights are then generated to help businesses throw away less food through better decision-making in menu design and food preparation.

Transitioning to a circular economy does seem like the best option towards a more sustainable way of living. The question is, will we be able to adopt this system for a healthier planet even if it means forgoing our current consumption habits?

If you, too, have a business contributing towards sustainability, we can help you get your message to more people- just send us a message!

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