The circular economy
We at Green Gain think that the circular economy is an exciting and inspiring vision of how we can we make, use and dispose of products in a resource-limited world.
We believe that the economy will become much more circular as the costs of raw materials and environmental controls escalate (see figure below). And we are seeing early adopters – new entrepreneurs and big business alike – beginning to make great commercial successes from new products, new business models and new strategies based on circular economy opportunities. We expect many of these innovators to become the future market leaders.
We are not the only ones thinking this way. The challenge has caught the imagination of big business, entrepreneurs, designers and educators who see that the resources, production systems, business models and consumption patterns that have driven the modern economy so far will increasingly need to be replaced.
“The potential of moving towards a truly circular economy – where materials are used again and again instead of going on a one-way trip – is truly phenomenal” Janez Potočnik, European Commissioner for the Environment
“Any business that thinks it cannot participate in these new models of circular economy – forget it! Disruptive threats will bring big business incumbents to their knees if it cannot deal with those challenges. So the circular economy is going to come whether you like it or not.” Mike Barry, Head of Sustainability, Marks and Spencer.
Sharp price increases in commodities since 2000 have erased all the real price declines of the 20th century. Credit: Ellen MacArthur Foundation
So, what is the circular economy?
Essentially, a circular economy is based on renewable resources – either grown or circulated within the economy at high value. The circular economy has no wastes: only resources designed to be feedstocks for other products. The diagram below shows how biological and non-biological products can be separately managed to maximise value recovery.
The Circular Economy Butterfly Diagram: value recovery for biological and technical materials. Credit: Ellen MacArthur Foundation
Some key features of circular economy thinking are:
Whole system design: an effective circular economy for a product is much more likely to be achieved if all or everyone involved in the product’s design, manufacture and use are incentivised towards the same outcome.
Design for end-of-life recovery: Repair, refurbishment and re-manufacture become much more commercially viable and prevalent when products are designed with this in mind.
New business models: Selling the function of a product rather than the product itself means that the supplier retains ownership of the product and is incentivised to design for durability and end-of-life recovery. Other business models based on sharing products between different consumers, and based on diverting end-of-life products before they reach a wheelie bin or skip are rapidly gaining ground.
Diversity: a wide variety of circular economy solutions applied at different scales will provide a resilient and adaptable foundation.
Biomimicry: copying systems used in nature – seeing ecosystems as a template for a circular economy and its elements.
Innovation: A mass migration from a linear to a circular economy will begin with a lot of invention, creativity, experimentation, entrepreneurship and collaboration. We are already seeing this happening. And it’s inspiring.
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