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17. February 2022

Circular Economy: An approach to a more sustainable future

When a leaf falls off a tree, it does not become waste but nourishment for the ecosystem. Nature shows us in this beautiful form that resources shall not be wasted. However, our current economy works differently. Applying a linear paradigm, resources and raw materials are taken, turned into products and then thrown away (take – make – throw away-paradigm).  

The circular economy paradigm however promises to change this. Driven by the need for climate neutrality, environmental protection and the shift towards a sustainable economy, the circular economy paradigm is rapidly gaining traction from politicians and economists around the world.  

What is the circular economy? A definition 

A circular economy is one in which most materials get re-used and remain within the economic lifecycle. The economic lifecycle is a circular flow of raw materials that consists of the phases product design, production and remanufacturing, distribution, consumption, use, reuse and repair, collection and recycling.  

The concept of the circular economy describes primarily a paradigm in which products and production processes are designed in such a way that most materials are re-used once they have completed the economic lifecycle. It is the opposite of our current linear economy (“take-make-waste”) where only 12 % of secondary materials and resources are brought back into the economy.  

According to the Ellen MacArthur Foundation, there are three essential signs of a circular economy: 

  • Regenerative natural systems 
  • Product design that eliminates waste and pollution (“waste is a design flaw”) 
  • Products and materials are kept in-use for as long as possible 

Our current linear paradigm is reinforced by economic incentives for businesses to sell the largest amount of products within a short-time frame. This unsustainable situation has led to phenomena like  

  • Planned Obsolescence where manufacturers design high-tech products for limited durability and short product lifetime in order to promote purchasing of newly released products and maximize revenues and profit 
  • Fast Fashion which is intended to getting the newest trends quickly to consumers. But in reality, it just makes consumers buy more often and wear it for a shorter period, creating unnecessary waste and short-lived products 

The benefits of a circular economy 

The switch to a circular economy brings with it many benefits for all involved stakeholders and society as a whole.  

Environment 

  • Reduction in CO2 emissions 
  • Less environmental pollution 
  • Reduced energy consumption 
  • Lower resource usage, raw materials extraction 

Economy 

  • New jobs created (within the EU alone 700.000 until 2030)* 
  • Economic/GDP growth (0.5 % p.a. within the EU until 2030)*  

* https://ec.europa.eu/environment/strategy/circular-economy-action-plan_en 

Consumers 

  • More endurable, innovative products 
  • Money saving long-term 
  • Better quality of life in a healthier environment 

Businesses 

  • New niches and markets created 
  • Enormous potential for innovation  
  • Huge market in recycling and materials re-usage 
  • Money saving due to more efficient, less wasteful production 

The EUs Shift to a Circular Economy: The Circular Economy Action Plan Explained 

On March 11th 2020, the European Commission passed the “Circular Economy Action Plan” which is a part of the “European Green Deal” presented on December 11th 2019. The goal of the CEAP is “to ensure that the resources used are kept in the EU economy for as long as possible”.  

The CEAP is an extensive and detailed plan that seeks to provide a strategy and incentives to succeed in the shift from a linear to a circular economy within the European Union. It is also part of the EU’s bigger effort of becoming climate-neutral by 2050. The action plan includes a total of 35 legislative and non-legislative measures including for example  

  • An EU Strategy for sustainable textiles  
  • Revision of the Ecodesign Directive 
  • Revision of EU rules on waste shipment 
  • And much more 

Summary 
The circular economy is an economic system with closed cycles. This means that the life cycle of raw materials and products is extended by reusing them for as long as possible. This promises many benefits for the environment, the economy, consumers as well as businesses. 

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