The linar economic model vs the circular model

“Circular economy embraces the need to redesign our economy, in a way that we can re-design products so they can be ‘made to be made again’. This sustainable way of thinking, helps to work effectively at all scales – for large and small businesses, for organisations and individuals, globally and locally. Moving to a more circular approach, requires mostly a systemic change that builds long-term resilience, generates business and economic opportunities, and provides environmental and societal benefits”. (Ellen Macarthur Foundation, 2020)

The World Economic Forum has officially defined Circular Economy as below: “A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems, and business models.”

In today’s economy, society is benefiting from many of products that are both diverse and cover almost every need a human brain can imagine! This increased growth has been however fuelled by the continuous use of natural resources. Today, more than ever, the industry is heavily and extensively using the world’s natural resources. But based on pure economic principles, resources are scarce. So, it is only expected that natural resources will not be available for quite a long time still. Bare also in mind, that the planet’s ability to regenerate itself is slow, and such a process could take hundreds of years.

Therefore, with the clock ticking, a more circular approach as to how we reduce consumption, reuse materials and products, and recycle waste, is essential if we want to continue to enjoy products that cover all our needs without wasting all earth’s resources and damaging the environment!

Did you know that adopting a circular approach could boost EU’s resource productivity by 3% by 2030, generating cost savings of 600 EUR billion a year, and 1.8 EUR trillion more in other economic benefits? (McKinsey & Company, mapping out circular economy benefits, 2016)

The numbers really speak for themselves. Let’s check out some more benefits.

But first, let’s observe the 3 basic principles of the circular economy model:

• Design out waste and pollution
• Keep products and materials in use
• Regenerate natural systems

Can you imagine what would happen if waste and pollution never happened in the first place? Or what about, building a world which uses things rather than using things out? Last but not least, what if we could, not merely protecting the environment but, actively helping to improve it?

A circular economy approach can really help to achieve the cornerstones of this model. In terms of designing out waste and pollution, the circular economy model, can, in fact, design the negative impacts of economic activity, so these can be prevented. In an effort to map out such negative impact examples, we could refer to hazardous substances, air pollution, land and water alike, etc.

Circular economy, applicable to the conservation of goods and resources in use, achieves the design longevity of products, reuse, remanufacture and recycle to sustain the circulation of products, parts and materials in the economy. Additionally, the CE model is strongly emphasizing the effective use of bio-based material, in a way that it promotes different uses of these materials; a cycle is created and these materials are circulating between the economy and natural systems. Lastly, in relation to improving the environment, the circular economy model invests in the use of renewable resources; a typical example being the area of mobility, which encourages the use of renewable

Figure.1. energy instead of fossil fuels.

Source: https://www.locusresearch.com/think/blog/2019/08/business-value-circular-economy

Referencing again the concept’s definition CE aims to improve resources’ performance and fight the volatility that climate change might bring to businesses. The CE model brings so many benefits on a multiscale level (i.e., economy, business, environment and society) and as such it carries the potential of creating value in systems and economies alike.

So how is circular economy basically different from a linear economy?

To put it simply, “in a linear economy we mine raw materials that we process into a product that is thrown away after use. In a circular economy, we close the cycles of all these raw materials. Closing these cycles requires much more than just recycling. It changes the way in which value is created and preserved, how production is made more sustainable and which business models are used.”[1]

Therefore, in contrast to what is happening when basing your operations on the linear economic model, the circular economy model, is making optimal use of raw materials and resources.[2]

Figure.2. From a linear to circular economy

Source: https://themasites.pbl.nl/o/circular-economy/

It is very important to understand, that converting a linear economy to a circular economy necessitates system modifications, or transition. Other designs or techniques (for example, 3D printing), items that can be repaired or regenerated, material recycling, and a different way of thinking about things (for example, sharing them) are all parts of such a transition.

Prioritizing strategies based on the ‘Rs’ is a good rule of thumb for selecting the greatest value reuse of resources within the cycle (Rethink, Redesign, Reuse, Repair, Remanufacturing, Recycling, Recover). There will, however, always be exceptions.

A circular economy has a different view on sustainability than a linear one. When working on sustainability within a linear economy, the emphasis is on eco-efficiency, which implies minimizing the ecological effect while producing the same output.

Figure.3. Effectiveness

Source: EPEA GmbH, 2013

This will increase the time it takes for the system to become overwhelmed (Di Maio, Rem, Bald, and Polder, 2017). In a circular economy, sustainability is pursued via enhancing the system’s eco-effectiveness. This indicates that not only is the environmental impact minimal, but the environmental, economic, and social impact is even beneficial (Kjaer, Pigosso et al., 2019). By focusing on eco-effectivity to make a beneficial influence, we boost the ecological, economic, and societal systems.

[1] https://kenniskaarten.hetgroenebrein.nl/en/knowledge-map-circular-economy/how-is-a-circular-economy-different-from-a-linear-economy/

[2] https://themasites.pbl.nl/o/circular-economy/