What is a Circular Economy?
A circular economy is an economic system where we aim to eliminate waste and have continuous use of resources.
In other words
A circular economy is a new concept that challenges current methods of economic development.
The concept states that there should be no distinction between the economic ‘production’ and economic ‘consumption’ phases of the economic cycle.
Ideally, products should be designed for reuse from the very start. This means that products are conceived for recycling and created with the intention of being reused many times over.
A circular economy can be implemented by population segments such as towns and communities, or by a company.
The circular economy revolution has been made possible by the creation of new technologies that can design, manufacture, curate, and contribute to the cycle.
A circular system uses the method of reuse, sharing, repair, remanufacturing, recycling, and refurbishment, which creates a closed-loop system.
The circular economy’s main aim is to provide us with products and equipment that can be used for a more extended period and improve the productivity of the resources.
The waste materials which are received from a product should be used as an input for another product.
The current traditional model (often called Linear Model) is based on ‘take-make-consume-waste’ approach to using resources.
The raw material is transformed into a product and after it ends its life cycle is thrown to waste.
Nowadays the concept of recycling is gaining popularity.
These concepts are more sustainable than the present linear economic system.
In a circular economy, natural resources are utilized sustainably and efficiently, and products and materials are preserved for further use.
These are the 3 main parts of the circular economy
- Reduction of waste & pollution
This includes the reduction/minimization of waste & pollution by reducing damage from various economic activities.
- Extension of products & longer usage of their value
As part of this, we aim to extend the useful life of various products by creating the loops of products, circulating in the economy. We can achieve this by active reuse, proactive repair & remanufacturing the products in the economy.
- Regeneration of natural systems
This is to enhance natural capital & to create the necessary conditions for the regeneration of natural systems.
So, Circular systems employ reuse, sharing, repair, refurbishment, remanufacturing, and recycling to create a closed-loop system, minimising the use of resource inputs and the creation of waste, pollution, and carbon emissions.
In the age of a dwindling planet, the circular economy is a highly pertinent concept. It is essential to protect the earth and its resources by being aware of what one buys and uses. It is also important to be mindful of how much and what one throws away.
Circular Business models
As part of this, in various industries, the focus has shifted from manufacturing new products to recycling, remanufacturing, and reducing/reusing the existing resources.
Their focus is to minimize the resource input and reduce the waste and emission leakage in the organizational system.
This involves recycling measures, use of phase extensions, and improvement in efficiency, and
substitute products by Software Solutions and services. To achieve these strategies, a well-planned
design of the material recovery process and adjoining circular supply chain is required.
Circular economy in textile industries
Textile industries adopt the practice of circular economy where clothes and fibers are recycled, so
that waste can be avoided. According to a survey, the” take, make, dispose of” model leads to an
economic loss of $500 billion per year. It also affects the environment by disrupting the ecological
cycle. Tons of clothes are disposed of in landfills and incineration.
Automotive industry
The automotive industry has also started adopting a circular economy. To give a boost to a circular
economy, carmakers get specific incentives.
According to research use of circular economy will lead to good quality and better convenience.
Agriculture
As many countries aim to have a circular economy, considerable changes are brought in the
field of agriculture. Some of them were as follows
-Using natural manure instead of artificial fertilizers.
-Reusing of the waste stream.
-Closure of the fodder manure cycle.
Furniture Industry
Generally, the products in the furniture industry especially durable therefore implementing strategies accordingly become important to extend the lifeline of the product.
This helps in lowering environmental pressure and lower cost. There is a massive potential in the furniture sector for the circular economy.
According to reports, 10,000,000 tonnes of furniture are discarded annually in Europe; most of it is used in landfills or incinerated.
There is another study that reports that 42% of bulk waste used in landfills is furniture.
The circular economy strategic management
A circular economy gives an alternative to think about a method to attain sustained competitive advantage (SCA).
Many companies still find it challenging to apply a circular economy as there is a lack of clarity among the firms.
Most companies still feel the circular economy is not applicable since it might be costly or risky to implement.
List of countries making progress in Circular economy
Germany: they are ahead in aspects of the circular economy such as waste management and recycling
Netherlands: by 2030 Netherland aims to reuse 50% of all the materials by converting waste into reusable materials.
They further strive to make the country 100% waste-free.
Belgium: Belgium is also leading the race for the use of a circular economy. In 2018 Belgium proposed a road map for a circular economy consisting of 50 measures.
Examples of some leading companies in ‘Circular Economy’
Winnow : It has developed smart meters/tools, which analyses the trash in a kitchen. With it’s powerful AI technique, it identify & suggest ways to reduce food wastage.
DyeCoo : It has developed a process of dyeing cloth that uses no water at all, and no chemicals other than the dyes themselves. It uses highly pressurized “supercritical” carbon dioxide, halfway between a liquid and a gas, that dissolves the dye and carries it deep into the fabric. The carbon dioxide then evaporates, and is in turn recycled and used again.
Close the Loop : It process & create new material/products from old printer cartridges and soft plastics. These products are mixed in with asphalt and recycled glass to produce a higher-quality road.
Enerkem : Their technology extracts the carbon from trash that can’t be recycled. It turns the carbon into a gas that can be used to make biofuels like methanol and ethanol, as well as chemicals which can be used in thousands of everyday products.
Schneider Electric: It uses recycled content and recyclable materials in its products, prolongs product lifespan through leasing and pay-per-use, and has introduced take-back schemes into its supply chain.
Conclusion of What is a Circular Economy
A circular economy is a closed-loop system that prevents waste of resources and creates long-term prosperity.
The goal of a circular economy is to keep the natural resources for generations to come.
A circular economy is an alternative to the linear economy, which cannot handle the negative consequences of exponential growth without relying on depleting natural resources.
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