Why Do We Need a Circular Economy?

If we are to have any chance at all in providing for the needs of all in a sustainable manner, we have to make a paradigm shift in the way we create, use and throw away materials. We need to find ways in which everyone benefits from the limited resources on earth.

Although I had read many articles about burgeoning waste, one particular newspaper report about the collapse of a landfill in New Delhi which killed 2 people, pushed me to acknowledge and engage with reality. Perhaps it was the cumulative effect of all the intermittent reading on waste which acquired critical mass with this report and acted as a catalyst to my efforts. I realized that we have a problem with waste and we needed to take control of it. Wondering how to go about this, I decided to start at home. Given that a significant portion of my household waste came from the kitchen, I decided to stop discarding waste and start making compost at home. This way, I could return the finished compost back to the soil.

Unwittingly, I had stumbled on a principle of circular economy - designing out waste. In writing about this, I also acknowledge that while I had the required space and resources to make compost at home, not everyone and certainly not the poor, have the wherewithal for this. This is why it is very important that governments take up the burden of waste management, by building  required infrastructure, setting up processes and enforcing them in the backdrop of enabling laws and policies. Expounding on this will require another article in itself. Coming back to my story, I continue to make compost at home and my belief in the need for waste reduction across all aspects of our lives has only grown stronger.

The current global economic model based on the take-make-waste philosophy is depleting natural resources and increasing waste. If we are to have any chance at all in providing for the needs of all in a sustainable manner, we have to make a paradigm shift in the way we create, use and throw away materials. We need to find ways in which everyone benefits from the limited resources on earth. Therefore, the transformation of the current linear model to a circular one where waste is designed out is both imperative and inevitable.

What is Circular Economy ?

Circular economy is an economic system that is restorative and regenerative by design. The principles intrinsic to circular economy are:

• Designing out waste and pollution: This involves redesigning business processes, products and services to ensure that there is no waste or pollution.
  
• Keeping products and materials in use: This involves designing or redesigning products for durability. The aim is to constantly keep them in use and reduce both the need for new products and waste.  
  
• Regenerating natural systems: Valuable nutrients from materials should be returned to the biosphere.

The Butterfly Diagram by the Ellen MacArthur Foundation (set out below) crystalizes the essence of circular economy. It explains how biodegradable and non-biodegradable materials can be designed and used in ways that fit within the framework of circular economy.

The desired cycle for each type of material is represented in the diagram - biological cycle for biodegradable materials on the left and technical cycle for non-biodegradable materials on the right.

Biological cycle: The object of this cycle is to return embedded nutrients in biodegradable materials to the biosphere. For e.g., organic materials that can’t be used further (food waste) can be composted or anaerobically digested and returned to the biosphere. Cascades within the biological cycle refers to putting materials to various uses and over time, extracting stored value from them. For e.g., a pair of cotton jeans turns to furniture stuffing and then insulation material, before being anaerobically digested.

Technical cycle: This cycle is for non-biodegradable materials and employs the following strategies in the order of writing:

• Maintain / prolong: The most effective way to reduce waste is to follow the inner most loop of ‘Maintain / Prolong’ in the technical cycle. The aim here is to enable longer usage of any product and thereby reduce the need to create new products.
• Reuse / redistribute: After initial use, many technical materials can be reused or redistributed with little enhancement. This way, materials can still be in use for longer periods, without the need to extract resources for manufacture of newer ones.  For. e.g., reusing cars can reduce the need for more cars, thereby avoiding extraction of natural resources and reducing waste.
• Refurbish/ remanufacture: When a product can no longer be reused or redistributed, most of the value in the product can still be utilized through either refurbishment or remanufacture. A product is remanufactured if it is disassembled to its component parts and rebuilt. On the other hand, refurbishment is a process whereby a product is repaired as much as possible, without any disassembly. For e.g., a car manufacturer can refurbish or remanufacture a component part.
• Recycle: Only when a product can no longer be reused, refurbished or remanufactured, should we resort to recycling. As a process, recycling involves reducing a product to its basic materials and allowing those materials to be remade into new products. Despite the process taking away much of the embedded energy and labor that went into the making of a product, the value of materials can still be preserved through recycling.

Left to itself, the take-make-waste model our current economy works in will not only deplete the natural resources we depend on, but also increase the amount of waste that we have to deal with. We cannot recycle our way out of the waste crisis. There is an urgent need to reduce our dependence on natural resources, to redesign the way we produce goods and services, to share products and keep them in use for longer periods and to eliminate waste. This is why we need circular economy and all the people who will bring in new solutions within this framework.

Opportunities in Circular Economy

The principles and ideas embedded in the circular economy framework will create innumerable opportunities for designers, thinkers, business owners and innovators. For instance, the material cycles highlight the difference between access and ownership - only biological materials are consumed whereas it is enough for technical materials to be used rather than owned. This opens up immense business opportunities for reuse, redistribution and recycling based business models. The Ellen MacArthur Foundation’s New Plastic Economy Initiative has come out with its research on reuse models which include the following B2C business models - Refill at Home (for home care and personal care products etc.); Refill on the Go (for beverages, cooking essentials etc.); Return from Home (for picking up empty packaging, meal deliveries, groceries etc.); and Return on the Go (for beverages etc.).

Transitioning to a circular economy will also create demand for services, such as:

• Collection and reverse logistics providers who enable used products to be reintroduced into the system.
• Resellers or remarketers facilitating longer use of products.
• Parts and components remanufacturers, product refurbishment providers etc.

The transformation to a circular economy will create the need for local solutions, as opposed to universal ones. The principles inherent in the circular economy framework are waiting to be applied to the way we take and consume resources.

Take it Further

The beauty of circular principles is that they are applicable to all aspects of business in every sector. You can find more information on implementing circular economy in your career with Terra.do's Circular Economy: Principles and Applications Program. For more content about circular economy, you can also refer to the learning hub of Ellen MacArthur Foundation. Below is Terra.do's Circular Economy Webinar and Ask Us Anything with the course creator and instructor that gives a large overview of the circular workspace in the context of climate change.