What is a circular economy?
A circular economy is a regenerative system in which resource input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing energy and material loops. This can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and closed recycling loops. This is in contrast to a linear economy which is a ‘take, make, dispose’ model of production.
Arguments in favour of circular economy
A major argument in favour of the circular economy approach is that achieving a sustainable world does not require changes in the quality of life of consumers, nor it requires loss of revenues or extra costs for manufacturers and other economic agents. The argument is that circular business models can be as profitable as linear models and allow consumers to keep enjoying similar products and services.
To achieve models that are economically and environmentally sustainable the circular economy focuses on areas such as design thinking, systems thinking, product life extension, and recycling.
One example of a circular economy model is the implementation of renting models in traditional ownership areas (e.g. electronics, clothes, furniture, transportation). Through renting the same product to several clients, manufactures can increase revenues per unit, thus decreasing the need to produce more to increase revenues. Recycling initiatives are often described as circular economy and are likely to be the most widespread model.