What do we mean by the Circular Economy?

In the linear economy, raw natural resources are taken, transformed into products and get disposed of. On the opposite, a circular economy model aims to close the gap between the production and the natural ecosystems’ cycles – on which humans ultimately depend upon.

This means, on one hand, eliminating waste – composting biodegradable waste or, if it’s a transformed and non-biodegradable waste, reusing, remanufacturing and finally recycling it. On the other hand, it also means cutting off the use of chemical substances (a way to help regenerate natural systems) and betting on renewable energy.

The World Economic Forum’s Definition Of Circular Economy

“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. ”

Ellen McArthur Foundation’s Definition Of Circular Economy

“Looking beyond the current take-make-dispose extractive industrial model, a circular economy aims to redefine growth, focusing on positive society-wide benefits. It entails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the system. Underpinned by a transition to renewable energy sources, the circular model builds economic, natural, and social capital. It is based on three principles: design out waste and pollution; keep products and materials in use; regenerate natural systems.”

Fig 1. Principles of  Circular Economy

The Principles Of The Circular Economy: Energy and Resources Are Gold

At its core, a circular economy model has the intention of designing out waste. In fact, a circular economy is based on the idea that there is no such thing as waste. In order to achieve this,  products are designed to last (good quality materials are used) and optimized for a cycle of disassembly and reuse that will make it easier to handle and transform or renew them.

In the end, these tight product cycles differentiate the circular economy model apart from disposal and recycling, where large amounts of embedded energy and labor are lost. The ultimate goal is to preserve and enhance natural capital by controlling finite stocks and balancing renewable resources flows.

The circular economy model makes a distinction between technical and biological cycles. Consumption happens only in biological cycles, where biologically-based materials (such as food, linen or cork) are designed to feed back into the system through processes like anaerobic digestion and composting.

These cycles regenerate living systems, such as soil or the oceans, which provide renewable resources for the economy. By their turn, technical cycles recover and restore products (e.g. washing machines), components (e.g. motherboards), and materials (e.g. limestone) through strategies like reuse, repair, remanufacture or recycling.

Ultimately, one of the purposes of the circular economy is to optimize resource yields by circulating products, components, and the materials in use at the highest utility at all times in both technical and biological cycles.