Circular economy

A circular economy (often referred to simply as 'circularity') is an economic system aimed at minimizing waste and making the most of resources. In a circular system resource input and waste, emission, and energy leakage are minimized by slowing, closing, and narrowing energy and material loops; this can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling. This regenerative approach is in contrast to the traditional linear economy, which has a 'take, make, dispose' model of production. A circular economy (often referred to simply as 'circularity') is an economic system aimed at minimizing waste and making the most of resources. In a circular system resource input and waste, emission, and energy leakage are minimized by slowing, closing, and narrowing energy and material loops; this can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling. This regenerative approach is in contrast to the traditional linear economy, which has a 'take, make, dispose' model of production. Proponents of the circular economy suggest that a sustainable world does not mean a drop in the quality of life for consumers, and can be achieved without loss of revenue or extra costs for manufacturers. The argument is that circular business models can be as profitable as linear models, allowing us to keep enjoying similar products and services. Intuitively, the circular economy would appear to be more sustainable than the current linear economic system. Reducing the resources used, and the waste and leakage created, conserves resources and helps to reduce environmental pollution. However, it is argued by some that these assumptions are simplistic; that they disregard the complexity of existing systems and their potential trade-offs. For example, the social dimension of sustainability seems to be only marginally addressed in many publications on the circular economy. There are cases that might require different or additional strategies, like purchasing new, more energy efficient equipment. By reviewing the literature, a team of researchers from Cambridge and TU Delft could show that there are at least eight different relationship types between sustainability and the circular economy. The circular economy can cover a broad scope, findings from the literature show that researchers have focused on different areas such as industrial applications with both product-oriented and services, practice and policies to better understand the limitations that the CE currently faces, strategic management for details of the circular economy and different outcomes such as potential re-use applications and waste management. The circular economy includes products, infrastructure, equipment and services, and applies to every industry sector. It includes 'technical' resources (metals, minerals, fossil resources) and 'biological' resources (food, fibres, timber, etc). Most schools of thought advocate a shift from fossil fuels to the use of renewable energy, and emphasize the role of diversity as a characteristic of resilient and sustainable systems. It includes discussion of the role of money and finance as part of the wider debate, and some of its pioneers have called for a revamp of economic performance measurement tools. 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, manufacturers can increase revenues per unit, thus decreasing the need to produce more to increase revenues. Recycling initiatives are often described as a circular economy and are likely to be the most widespread models. As early as 1966 Kenneth Boulding raised awareness of an 'open economy' with unlimited input resources and output sinks, in contrast with a 'closed economy', in which resources and sinks are tied and remain as long as possible a part of the economy. Boulding's essay 'The Economics of the Coming Spaceship Earth' is often cited as the first expression of the 'circular economy', although Boulding does not use that phrase. The circular economy is grounded in the study of feedback-rich (non-linear) systems, particularly living systems. The contemporary understanding of the Circular Economy and its practical applications to economic systems evolved incorporating different features and contributions from a variety of concepts sharing the idea of closed loops. Some of the relevant theoretical influences are cradle to cradle, laws of ecology, looped and performance economy, regenerative design, industrial ecology, biomimicry and blue economy. The circular economy (CE) was further modelled by British environmental economists David W. Pearce and R. Kerry Turner in 1989. In Economics of Natural Resources and the Environment, they pointed out that a traditional open-ended economy was developed with no built-in tendency to recycle, which was reflected by treating the environment as a waste reservoir.