Introduction to Circular Economy — with Examples
One of the most common things we hear / read these days is: The earth has limited natural resources. If we keep using them recklessly then we will run out of those resources. Today, about 13% of the world’s population lacks access to fresh water and 9% faces severe food insecurity. Resource scarcity will continue being exacerbated with increasing population, changing climate, soil degradation and threats from diseases. As for the primary energy sources, we are most likely to run out of oil in 50 years, natural gas in 52 and coal in 100 years. In order to conserve resources and leave a healthy planet for future generations it is imperative that we change the way we live as individuals, run our businesses as professionals, and make new laws as policy makers. Circular economy provides us with guidelines for the change.
What is a circular economy and how is it different from the current economic system?
“A circular economy (also referred to as “circularity”) is an economic system aimed at eliminating waste and the continual use of resources. 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.The circular economy aims to keep products, equipment and infrastructure in use for longer, thus improving the productivity of these resources.” — Wikipedia
(There are a number of definitions of circular economy but I feel that wikipedia’s definition is simple and comprehensive).
The current economic system is a linear system in which we take resources, make products, use them, and throw them away. Whereas in a circular economy, waste from one product is designed to be an input for another, for example making clothing from recycled plastic bottles. Circular economy adopts an approach of resource recovery instead of waste management.
Example 1: Waste as a resource: prolonged use and reuse: Here is a simple example of circular economy: Let us say you are using paper towels in the kitchen to wipe countertops. In this case you invest resources (money, time, and effort) to buy a new product (which in turn uses resources like timber, water, chemicals, electricity etc. as input resources) for wiping countertops, after which the used paper towel is thrown away. The next time, you use a fresh new paper towel which too is trashed, generating waste after each use.
Now considering the principles of circular economy you can ask, “Is there any waste material in my house that I can use for the same function and eliminate buying paper towels?” One answer is: You can use pieces of an old T-shirt or bedsheet to do the same function. This serves two purposes 1. The immediate waste generated by discarding an old T-shirt is delayed as it is in use for a longer duration of time 2. No new resources are needed (that is your money is saved along with trees etc. that go into making the paper kitchen towel). Doing so helps you save money and at the same time helps conserve resources and protect our planet.
For some of us this could be a great start to practice circular economy and environmental consciousness. We won’t mind the little additional effort in washing the wipe cloth for reuse. Does this mean that everytime we think about the circular economy we will need additional effort or might lose the convenience of single use products? No! Here is an example:
Example 2: Waste as a resource: reduce pollution and eliminate further waste:
Another extremely convenient product from our everyday lives is the takeout food box. Plastic and styrofoam are the most common materials for takeout boxes. Both materials create damage to the health of people and the planet. But there are some innovative solutions for this. An example I came across is Ecoware, an Indian company, manufacturing100% biodegradable and easily affordable products that have the convenience of plastic boxes along with being food safe, and fridge and microwave friendly. (I have no affiliation with Ecoware; I just like the concept :)
Ecoware uses crop leftovers (that are otherwise burnt, causing extreme pollution) to make their products. These products are supposedly made without using any chemicals or additives. When composted the products turn into soil in about 90 days thus no new waste is created. While convenience and performance are comparable with plastic / foam counterparts, Ecoware products are 15% more expensive than similar plastic products and 35% more expensive than foam ones.
Example 3: Revive, Retain, and Recycle:
Let’s take a more complex example: mobile phones. Usually when we buy a phone, after a few years we either sell it in a pre-used market, trade in for a new phone, hand it down to someone, or discard it. The ultimate outcome in most cases is that the phone is trashed! It is estimated that 150 million mobile phones are discarded in the United States annually, which is approximately equal to half of its population. Most of the resources that go in making a phone are lost, leading to generation of some toxic waste as well as economic loss. In 2019, the United States discarded electronics worth USD 7 billion.
So how could the circular economy work in the case of mobile phones? Often, consumers buy a new phone for a better camera, or to avoid expensive repairs, or to receive new software updates. With Fairphone, a Netherlands based company, you can buy just the new camera module, dismantle the old one from the phone, assemble the new one and revive your old Fairphone. The company also provides easy repair instructions and makes spare parts available for customers to repair their phones and retain for a longer duration of time. They also provide software updates for a longer time than most other phone makers. Their latest version, Fairphone 3+, is made with 40% post-consumer recycled plastics. Again, I have no affiliation with Fairphone; I just like their concept.
You may be thinking that it is common sense to use recycled materials wherever possible. Yes, this does not happen often. Even if it is technically possible to use recycled materials in manufacturing of products, the supply chain to recover these waste materials can be tricky. It may require a change in business model and the way companies operate. Thus, circular economy calls for systems thinking, meaning every part of the value chain like design, sourcing, logistics, manufacturing through to distribution and post-use disposal or resource recovery needs to be considered holistically.
If you are intrigued by the concept of a Circular Economy, stay tuned for the next article. In that article, we will look at some interesting examples of circular economy applied to supply chain, construction, fashion, policies and laws, information technology, product design , and home management.
Literature: Some of the most relevant theoretical influences are Cradle-to-Cradle (McDonough and Braungart, 2002), Laws of Ecology (Commoner, 1971), Looped and Performance Economy (Stahel, 2010), Regenerative Design (Lyle, 1994), Industrial Ecology (Graedel and Allenby, 1995), Biomimicry (Benyus, 2002), and The Blue Economy (Pauli, 2010).
