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Everything Explained About the Circular Economy: How can you be part of it?

Updated: Oct 11, 2021

One of the biggest challenges experienced amongst the environmental and climate movements is making the economy sustainable or at least getting countries to work towards it.

Getting 193 countries to sign-up for the Paris Climate Agreement was tough going and some countries, not naming or shaming (USA) pulled out of the agreement. But, thankfully the USA is fully committed now. So, you’re probably thinking moving from the linear economic system (we have now) towards a circular economy seems like expecting to see a snowstorm in the Sahara Desert. With the unpredictability of our climate, anything is possible.

Working towards a circular economy isn’t wishful thinking I’m going to explain exactly how you can be part of it or at least in small ways. Read on to find out how!

Table of Contents

1. Defining the Economy

2. How Does the (current) Economic System Work?

3. What is a Circular Economy?

4. The Problems with the Linear Economy

5. The Benefits of a Circular Economy

6. How Can You Be Part of the Circular Economy?

Defining the Economy

Before we dive into what and how the circular economy works, it’s important to know about the current economic system, which is an integral part of every country. As I’m not an economist nor an expert in world economies, I went and looked at various reliable sources.

The Economy Explained – Very Briefly

To understand how our current economic system works, first, we need to know what is the economy? This is difficult to do, considering different sources give their definitions and countries have their interpretations.

The Bank of England gives two perspectives. I did say it will be complicated, but luckily, I’ll break it down into understandable size pieces.

The economists define it as the study of scarcity before you shout out "isn’t the whole point of an economy to produce so people have more things to buy", yes, it is but resources such as raw materials, land and workers are limited – “while the demand for them is infinite”. To put it simply, we always want more. I’m not going to diverge into explaining scarcity as this blog will never end. However, here is a video that explains it all.

"Our necessities are few but our wants are endless."

- George Bernard Shaw

Common textbook definition of economy is a “system for distributing scarce resources”. When we talk about ‘the’ economy it usually refers to countries.

Some countries follow a system where for the most part, the government controls resources and levels of production. On the other hand, the majority of the countries in the world have freer economies determined by supply and demand. I’m going to elaborate later and explain why it’s easier to transition into a circular economy from a more open economy.

I did say defining the economy is complicated. If you’re still reading, it means you’re curious to find out how our current economic system works.

How Does the (current) Economic System Work?

Whether it’s a linear or circular economy, the system is in place to meet these fundamentals:

1. How to allocate limited resources— from production to individuals and organizations as well as to best satisfy unlimited needs.

2. What goods and services to produce and in what quantities?

3. Who produces the goods and services?

4. How is it distributed to consumers?

To give your eyes some rest, I have created this simple diagram to explain how the current economic system works.

Linear Economic Diagram

The current economic system is based on fast production, overconsumption and disposing of the product once we are done with it. Now you can see why it’s linear and has a devasting impact on the environment, in simple terms, raw materials are extracted, usually used once and then goes straight to the landfill.

Now let’s look at how the circular economy compares.

What is a Circular Economy?

Can you see what’s missing in the circular economy? In a truly circular economy waste is eliminated or a least minimised to biodegradable waste. A circular economy can only work when recyclable raw materials are extracted, otherwise, it defeats the purpose of being a circular economy. Once recyclable materials are sourced, the production and distribution have to be sustainably processed. At this stage it is based on three principles:

  1. Effectively manage waste and design out pollution from the start.

  2. Keeping materials in use over and over and manufacturer products that can easily be recycled.

  3. Fundamentally using renewable resources for energy, whilst revitalising ecosystems.

Once the products are distributed out into society, it comes down to us as individuals to make conscious decisions and use our judgement to effectively manage our waste.

The Problems with the Linear Economy

Unlike the circular economy, the linear economy is based on the principles of "take-make-waste". Let’s go back to the beginning, in a linear economy, most raw materials are non-recyclable.

Take these standard t-shirts, for example, simply by looking at them you won’t know that one is made from renewable resources and the other made from mixed materials that are harder to recycle (of course by touching it you’ll figure it out).

Most t-shirts manufactured by big brands contain at least two or three different materials. Most sportswear is made from a lycra-cotton blend. Lyra is a synthetic manmade fibre created from polyurethane.

Although it is durable, the downside is it doesn’t break down easily. If you’re interested in the journey of how clothes are made and want to learn about different materials that go into your clothes, I would recommend checking out this website.

On the flip side, a t-shirt made from bamboo works well in a circular economy. Why? Because bamboo can be recycled over and over without losing its durability and can be turned into other products. Most importantly, once the bamboo made t-shirt reaches its lifespan, it can easily break down in nature.

Some people would argue that the linear economy works because it gives society more choice in the market, which then allows the markets to be open and competitive and it allows small businesses to start and flourish more easily. I’m going to try and debunk some of these arguments under the benefits of a circular economy.

To put it bluntly, the linear economy is designed around meeting demand whilst maximising profits, there is very little or no emphases on working with the environment, but rather generating waste which devastates our eco-systems.

The Benefits of a Circular Economy

1. Innovation is endless – replacing linear products and systems opens up a wide spectrum of ideas and innovations. Some of the benefits include untapped technical development, sourcing of natural materials, energy efficiency and more growth opportunities for companies.

2. Job opportunities – In the circular economy, new industries would be able to establish, such as waste management, higher-skilled jobs in small to medium enterprises and entrepreneurship.

3. Revitalizing the environment – By ensuring to use of recyclable materials during production, means designing out waste and minimising pollution. Further, keeping materials in use means effectively utilizing rather than destroying natural systems, the circular economy contributes to achieving climate targets.

4. Radically reducing carbon emissions – The EU’s Circular Economy Action Plan is an ambitious development path to make the circular economy a reality. Under the new action plan, the EU aims to ‘make sustainable products the norm’, ‘make circularity work for people’ and "encourage green growth" by managing the life cycle of natural resources.

5. Opportunities for individuals - Hopefully you’re now convinced that the linear economy works well for businesses and not so much for the environment or the people. The circular economy will not only work wonders for businesses, the economy and the environment but also for the people. For instance, increased disposable income (as the cost of products would be reduced), improved health conditions (as air pollution and water contamination will be significantly reduced) and innovation in technologies will mean higher quality products (thus overcoming desuetude).

How Can You Be Part of the Circular Economy?

This circular economy seems like wishful thinking, right? Well not necessarily, the notion of living in a circular economy has its historical origins and many people are realising that the current linear economic system is not adequate to resolve global issues. Already there are small enterprises as well as on the grassroots level extraordinary people are making the circular economy a reality.

This transition needs traction for us to be able to truly enjoy living in a circular economic system. For the circular economy to take root and work within our ecosystem, it fundamentally comes down to conscious consumption.

You can be part of the circular economy by supporting small to medium-size enterprises, shopping consciously and eradicating waste.

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