A Quick Glimpse to Circular Economy
Limits of the linear model of consumption
Modern society in developed countries is based on the concept of consumption and, in particular, on the linear model of consumption: take – make – dispose pattern. Companies gather raw materials, use them to create products and sell the products to the consumer, who throws it away when the product is not useful anymore (Ellen MacArthur Foundation 2013). To make profit in this system, the manufacturer must get the raw materials at the lowest possible price and then try to sell as many finished products as possible. Whilst this model is a precondition to economic growth, it presents two main flows related to its linearity.
The first one is that it implies an unlimited availability of resources on Earth: increasing amounts of raw materials such as metal, glass, plastic are needed to create increasing amounts of finished products to sell. Furthermore, linear economy is based on an added value at each step of production (Stahel 2016). Nonetheless, as explained here, the world does not have infinite resources, thus this process will inevitably come to an end. The second flaw concerns the huge amount of waste that is produced once the products are discarded. The waste is often toxic and frequently not recycled, polluting oceans and lands thus causing last-longing problems to the environment. The current situation shows that decreasing raw materials and environmental damage related to climate change are beginning to influence productivity and increase prices of products.
Relation between sustainability and Circular Economy
Sustainability is a concept extremely discussed in the academic field and an increasing number of civil society organizations, NGOs and political parties believe that it is a fundamental principle to follow in order to preserve the equilibrium in the environment and in the world society. At first, sustainability was a concept related to the environment only, namely the respect towards the ability of nature to regenerate itself (Duden 2015). However, sustainability encompasses a variety of human life’s spheres, including the environment, but also the social, the economic and the political ones. Indeed, according to the definition of the Brundtland Commission, sustainability is the “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs” (Brundtland 1987).
Circular Economy seems to be the third way between economic growth and sustainability. According to the MacArthur Ellen Foundation, “Circular Economy is an industrial system that is restorative or regenerative by intention and design” (MacArthur Ellen Foundation 2013). Circular Economy is based on the reutilization of materials coming from discarded products that are reintegrated into the productive system in a new object (Geissdoerfer, Savaget, Bocken, Hultink 2017). Such mechanism presents advantages for the productive chain and for the environment, because it employs the same material several times and in different forms:
- It reduces waste;
- It reduces costs of raw material extraction;
- It reduces the impact on the environment.
Therefore, both sustainability and the Circular Economy stress that the earth is a closed and circular system, with finished resources and that economy and the environment should coexist in an equilibrium (Pearce and Turner 1989).
The functioning of Circular Economy
The world works in a cyclical way, for example the cycle of water. A crucial question is whether humans can accept and adopt a cyclical economic system. This type of economy rests on few principles. The first one is that few or no resources should be lost in the making of a product, so that they can be further re-employed. This notion brings to the second principle: the design out of waste. The creation of product must already imply the subsequent re-utilization of its composing parts into a new product. The third principle concerns the composition of products. Indeed, there should be a differentiation between consumable and durable components of products. Consumable components are made with biological nutrients, compostable and non-toxic for the environment. Durable components of technical parts (computers, TVs etc.) such as metal or plastic are toxic but reusable, thus thought to be recycled (Ellen MacArthur Foundation 2013).
The idea of Consumer
We have just described a circle in which raw materials are not newly extracted, rather they are taken from old products. In this perspective, the idea of the Consumer changes into the idea of the User and a new relation between business and customer is established. The User does not buy and consume the product, but he/she rents the product from the company, while it keeps the ownership of the product (Stahel 2016). Once the product is broken, the User returns it to the company, where it is disassembled, and all its parts are recycled and re-used into a new product. Hence, the company is not the producer and seller, rather it becomes a service provider. Once the company owns the product, it is willing to create is in a way easier to disassemble.
Examples of Circular Economy
The concept of Car/Scooter Sharing is an example of circular economy, where the consumer just rents the vehicle rather than owning it. However, this concept could be applied for other kinds of products. For instance, VIGGA is a Danish startup which creates a new idea of consuming clothes for children: it uses high-quality fabrics, produced under proper conditions at an attractive price. For a monthly subscription, customers get 20 pieces of clothing in the size of their children. Once the clothes are too small, they are returned, professionally washed and lended to someone else. Importantly, they are replaced with new ones in a larger size. This results in a circular process, which saves up 70-85% of clothes waste (vigga.us).
A second example comes from the worldwide know boots brand Timberland. Footwear is a product that uses virgin rubber is large parts. This company has partnered with a tire manufacturer, Omni United. When the tires have reached the end of their life as a product, the manufacturer ships them to a recycling facility, turning them into crumbs rubber. Then, crumb rubber is processed into the outsoles of Timberland shoes (timberland.com).
Why is Circular Economy a Viable Alternative?
Growing inequality and deterioration of the environment makes sustainability more desirable. From the economic point of view, raw material prices have been rising because their availability is closer to an end (Frenzel, Kullik, Reuter, Gutzmer 2017), consequently an increased resource efficiency is needed. Moreover, Circular Economy reduces costs in the supply chain because instead of buying virgin materials such as plastic or paper, firms and companies can use recycled ones: the output becomes the input in a different part of the productive ecosystem (Geissdoerferet al. 2017). From the environmental point of view, the system of Circular Economy has a smaller impact on nature, because there would be less CO2 emissions, which would lead to less soil and water pollution and a decreasing extraction of raw materials (Geissdoerfer, Vladimirova, Evans 2018). Moreover, hazardous waste would not be dispersed in the environment, rather it would be recycled.
Is it feasible?
The UN Environment Programme (2006) presents Circular Economy as a necessary condition for maintaining economic growth in a sustainable way. Our time period is fundamentally rooted into economic growth, and everything turns around it. It is based on a linear economy of take – make – dispose. However, this system is altering the wellness of the earth and of humans. Consequently, a system that entails the system of reduce – reuse – recycle can have a lesser destructive impact on the environment, and, at the same time, caa have a positive economic side as well (Geissdoerfer 2018).
The academic field understands that transforming a linear economy – began in the 1950s -1960s – into a circular economy has inherent costs related to the modification of the supply chain, composition of finished products and, on top of it, the acceptance by the wider society. In fact, Circular Economy is not about one manufacturer changing his way of producing, but it is about all manufacturers forming networks to modify the process-making of a product. From this perspective, there is still significant work to do, but there are already many businesses which are turning in that direction.
Brundtland Commission Report. 1987. Available at: http://www.un-documents.net/our-common-future.pdf
Duden. 2015. Duden: Deutsches Universalwörterbuch, Bibliographisches Institut GmbH, Berlin.
Frenzel, M., J. Kullik, M. A. Reuter, J. Gutzmer. 2017. Raw Material “criticality” – sense or nonsense? Journal of Physics D: Applied Physiscs 50(12).
Geissdoerfer, Martin, Paulo Savaget, Nancy M.P. Bocken, and Erik Jan Hultink. 2017. “The Circular Economy – A New Sustainability Paradigm?” Journal of Cleaner Production 143: 757–68.
Geissdoerfer, Martin, Doroteya Vladimirova, and Steve Evans. 2018. “Sustainable Business Model Innovation: A Review.” Journal of Cleaner Production 198: 401–16. https://doi.org/10.1016/j.jclepro.2018.06.240.
MacArthur Ellen Foundation. 2013. “Towards the Circular Economy.” https://doi.org/10.1007/b116400.
Stahel, Walter R. 2016. The Circular Economy. International Weekly Journal of Science 531: 435-438.
Timberland.com. Available at: https://www.timberland.com/responsibility/stories/drive-recycle-wear.html
UNEP. 2006. Circular Economy. An Alternative Model for Economic Development. United Nations Environment Programme, Paris.
Vigga.us. Available at: https://vigga.us/
Autore dell’articolo *Roberta Croce, addetta alla comunicazione del think tank trinità dei monti. Studentessa in Politics, Philosophy and Economics all’Università LUISS Guido Carli, Roma, Italia. Come sempre pubblichiamo i nostri lavori per stimolare altre riflessioni, che possano portare ad integrazioni e approfondimenti.
* i contenuti e le valutazioni dell’intervento sono di esclusiva responsabilità dell’autore.