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HxN Back to Basics: What is Circular Economy?

Circular economy simplified

So what is circular economy? Circular economy is an economic model that outlines an opportunity where businesses can have an “endless cycle” rather than the customary linear model for production and waste. But what does this mean?  Well as the name suggests, circular economy is circular in its model. It has adopted a “repair, re-use, recycle” philosophy which is much kinder to the environment, and when put into practice reduces waste to a minimum and keeps whatever materials are usable from previously owned products in the economy whenever possible. This means that using recycled materials creates further value in these products, and minimizes waste and raw material consumption (Europarl). Our current linear model is more of a line and less of a circle, the linear model, which has been prominent since the industrial revolution, applies a “take, make, use, dispose” approach. This “take, make, use, dispose'' model does not account for the possibility that materials can be reused after a product has been discarded so with a circular model the life cycle of these materials is prolonged. 

What are the benefits of a circular economy? 

The benefits of circular economy, especially when compared to the still widely used linear model, are plentiful. Circular economy uses and reuses raw materials efficiently and in most cases, fully. This ensures that there is less waste with this more sustainable approach and has less of a negative impact on the environment. This circular model is “restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times” (Interreg). According to the Ellen MacArthur Foundation, waste and pollution are created largely due to the way products are designed and created currently and that by keeping products and materials in a circular use, we have the possibility to design waste and pollution out of the equation altogether. Some additional projected benefits in the coming years which stem from this economic model are a 48% reduction of carbon dioxide emissions by 2030, a 47% reduction in traffic congestion in China’s cities, an increase of 3,000 euros in disposable income for EU households per annum, and many more (ibid).

The process

As mentioned above, circular economy adopts an “endless cycle” approach so imagine a circle. At the top of this circle, this economic model begins with raw materials and a design, from there the material moves to production or re-manufacturing (re-manufacturing because not all raw material is new material, especially in circular economy) to bring this design to life. After the product has been produced it moves to distribution, from distribution to consumption. While in the consumption phase of this model, we as consumers have the product, we can have this product for many years, using it, re-using it, repairing it, until we no longer have a purpose for it and we dispose of it. After disposal of our already consumed product, waste is collected and what is salvageable for recycling is moved on to the next step and what is not reusable will leave the cycle. The material that has been deemed recyclable is recycled, and finds itself back to the top of the circle as raw material, ready to bring a new design to life.

“The future depends on what we do in the present.”- Mahatma Gandhi

Ponder on this, Adidas sold 1 million shoes made out of ocean plastic in 2017, each pair of shoes reused 11 plastic bottles (CMI). Adidas is currently in the transition of using 100% recycled polyester in their products by 2024. This example demonstrates that slowly but surely “big” businesses are becoming more conscious of the detrimental impact that is sure to occur if they keep participating in the traditional linear model, however, it should not stop there. New and emerging businesses should and are beginning to also partake in the circular economy and its benefits for society, such as creating new “green” industries and jobs, reduced pollution, a decrease in dependence on importation of raw materials, and putting a stop to environmental damage fueled by resource extraction (CMI). 

It is up to each and every one of us to be the changemakers that will make the practice of circular economy a norm in our present time and create a path towards a more sustainable future. 

Authors: Hailey Matarese & Alondra Magana


References n.d. Circular Economy: Definition, Importance, And Benefits | News | European Parliament. [online] Available at: <> [Accessed 11 June 2020].

n.d. [online] Available at: <> [Accessed 11 June 2020].

n.d. [online] Available at: <> [Accessed 11 June 2020].

Sustainability Guide. n.d. Circular Economy - Sustainability Guide. [online] Available at: <> [Accessed 11 June 2020].

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