Circular economy: definition, examples and principles

The conservation of natural resources and waste reduction: this is the basis of the circular economy. This new economic model aims to rethink our production and consumption models to limit the waste of natural resources and to limit the production of waste.

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What is the circular economy?

The circular economy is an economic model which aims to produce goods and services in a sustainable manner, limiting consumption, and waste generation.

Circular economy: definition It means transitioning from a linear economy (extract, produce, consume, throw away) to a more circular economy, meaning: sharing, renting, reusing, repairing, renovating and recycling materials and existing products as often as possible to create added value.

In fact, the current consumption society has negative effects on the environment. Human extractions of natural resources far overtake the Earth’s biocapacity. For this reason, the Earth Overshoot Day arrives earlier each year. It is therefore necessary to act and take action to reduce our impact and create value.

This economic model allows us to extend the life of products and give them a second life. It is for this reason that the concept of the 7Rs was created:

1. Redesign: the idea of environmental-conception takes into account environmental impacts as another factor to consider when designing products;
2. Reduce: reducing your consumption and optimising resources;
3. Reuse: giving a second use to products;
4. Repair: lengthening the useful life of a product;
5. Renovate: reusing products for other things which may also be useful;
6. Recover: the circular economy favours sharing things;
7. Recycling: giving a second life to our waste.

Linear vs circular economy: The key differences

A linear economy and a circular economy are fundamentally different - like chalk and cheese. The linear model is an industrial and production mentality in which resources are considered to be infinite and the economic benefits are the core criteria above all else. For the environment, it is not a good model to follow as it involves a lot of waste generation, which is why governments and companies are moving away from it. Some of the elements of a linear economy include:

• Overproduction;
• Reduced life-cycles;
• An accumulation of waste;
• Depleting and overusing the world’s natural resources.

The circular economy moves away from that idea, and, as already mentioned, focuses on reducing waste and overuse of finite resources.

Some of the key circular economy principles are:

• Recycle and reuse;
• Use renewable energy and reduce pollution;
• Increase the life cycle of a product.

Circular economy: examples

The circular economy aims to transform the current financial model by fighting against all forms of waste. For this, certain specific objectives have been established, such as, for example, abandoning single-use plastic or encouraging collaborative economic models.

The sharing economy

The sharing economy, is to a certain extent similar to the functional economy. It is an economic model which puts two individuals in touch so that they may exchange, share, sell or donate one use to the other.

This new consumption model has developed extensively across the UK in the last few years, with numerous collaborative platforms appearing, such as Airbnb or Uber.

Extending product life and Back Market

The current high-tech industry produces thousands of millions of electric and electronic devices every year with disastrous environmental consequences. In fact, according to a report on the BBC, digital pollution makes up 3.8% of total carbon dioxide (CO2) emissions on the planet.

Therefore, companies such as Back Market have decided to act and fight against this overproduction by extending the product life of devices already on the market. By reconditioning (renovating used devices) Back Market considerably extends the life of our devices. An effective way to fight against planned obsolescence.

What is planned obsolescence?Planned obsolescence includes all the techniques used to deliberately reduce the life of a product in order to increase their substitution rate.

The benefits of a green and circular economy

The United Nations Environment Program (UNEP) defines the green economy as “an economy which leads to greater human wellbeing and social equity, significantly reducing environmental risks and ecological scarcity”.

• A green economy is an economy which is:
• Low carbon;
• Resource efficient;
• Socially inclusive.

The circular economy is the basis for the green economy by transforming the linear production processes of the current economy towards circular production processes. It aims to transform waste into new prime materials and to rethink and redesign them. It therefore prioritises the use of resources and the reduction in prime materials.

A green and circular economic model would reduce CO2 emissions in the atmosphere, stimulating economic growth and creating employment.

Circular economy in the UK

In July 2020, the UK government published its Circular Economy Package (CEP) policy statement, in which it laid out its commitment to switching to a circular economy, reducing waste, and keeping resources in use as long as possible. The CEP aligns a number of policies already in place across the nation aimed at helping the UK reduce CO2 emissions and become a zero carbon country by 2050. Some of the policies already announced are:

• The 25-Year Environment Plan: a roadmap that sets out how the UK will double resource productivity and achieve zero avoidable waste by 2050;
• Clean Growth Strategy: a commitment to explore ways to manage and reduce emissions from landfill;
• Industrial Strategy: a policy aimed at changing the fundamentals of how producers and consumers view products and ensuring more is done to make the life cycle longer;
• Litter Strategy for England: legislation on how to reduce waste across England and make sure litter does not end up in our rivers, lakes and the sea;
• Resources and Waste Strategy (RWS): a commitment to extracting maximum value from products and services and promoting resource efficiency.

Examples of the circular economy in the UK

With the need for humans to be more conscious of our impact on the environment, there are many organisations, charities and companies in the UK leading the way when it comes to making the switch to a circular economy. Some of these include:

• Gomi: a company that makes hand-made portable speakers from plastic bags and powered by used e-bike batteries;
• Goods for Good: a charity that donates new and unwanted overproduced goods and items to vulnerable communities both in the UK and abroad;
• Young Planet: an app for parents looking to give or receive children’s items - toys, clothes and more;
• Gatwick airport: became the first airport in the UK to achieve Zero Carbon’s Zero Waste to Landfill accreditation.

Ellen MacArthur and the circular economyOne of the UK’s most decorated sailors has since turned her attention to raising awareness of the circular economy. Ellen MacArthur was inspired by the need to make the most of limited resources while on her world-record breaking solo voyage around the world in 2005. Since she retired, she set up the Ellen MacArthur Foundation, which focuses on providing training and education on the circular economy and reducing excess waste.

EU and the circular economy

In line with the European Green Deal (roadmap for Europe to become a climate neutral continent by 2050) and the 2030 Agenda for sustainable development, the European Commission proposed a new Circular Economy Action Plan in March 2020, focused on the prevention and management of waste and aimed at boosting growth, competitiveness and the global leadership of the EU in this field.

Discover more practical guides regarding the protection of the environment.