considered counter-productive. But this is certainly not how proponents of the circular economy model see this. The premise of the circular economy model relies on the principle that the more resources can stay within the economic cycle, the better is it for society and the environment as a whole.
Typically, natural resources are extracted from our environment to make goods; these goods are then consumed and at the end of their lifecycle, they become waste. This is what is known as the linear economic model based on a “take, make, throw away” mentality which leads to the inefficient use and depletion of our resources.
In contrast, the circular economy seeks to design waste out of our economy by reducing, repairing, reusing and recycling product waste. In fact, it propagates that we should seek to see waste as a secondary resource.
Given the amount of waste that our society generates, the circular economy promises to open up a very substantial source of resources which will help minimise our reliance on primary (natural) resources as well as generate jobs and spur innovation both in products but also business models.
To put these potential gains in numbers, the World Economic Forum, the Ellen MacArthur Foundation and McKinsey & Company estimate that the circular economy represents a net materials cost savings opportunity between $380 and $630 billion for the EU each year¹.
So what are the three key tenets of the circular economy?
- Better product design
The circular economy wants to ensure that waste considerations are an integral part of the design of any product which means focusing on selecting the right materials as well as ensuring that the way the product is built up maximises the opportunities for reusing it, repairing it or recycling it².
To illustrate this concept, it is interesting to review the genesis of the “Fairphone”, a mobile phone that embodies the principles of the circular economy and created with fair supply chains in mind³.
The Fairphone is manufactured in a way that maximises the opportunities for repair – and often the user can repair it themselves! For example, the Fairphone makes it easy to replace a number of its features such as the camera or the speakers as well as most of the buttons for controlling sound etc.
- Better collection and recycling
Depending on the kind of waste stream, different solutions can help divert valuable waste from going to landfill. One very attractive solution is the set-up of deposit return schemes which refund consumers for recycling drinks bottles and cans. This has the added benefit that it reduces littering very effectively.
- New business models
For instance, ownership patterns could be reconfigured: what about leasing rather than owning products? A lot of companies lease car for their employees but what if this model could be replicated for a range of products?
If we apply the “leasing” model to a number of white goods, such as fridges or dishwashers, this would mean that the producer would have to deal with the product’s end of life management, thus creating an incentive for making the product more easily recyclable; the producer would also have an incentive to ensure the durability and easy reparation of their product. This would seem to a be a win-win for both consumers and the environment.