Circular economy at a glance
For more than 150 years, since the Industrial Revolution, we have had an economic model based on the extraction of natural resources for the manufacture of products and services. Once used, consumer goods are disposed of as waste. This system is known as a linear economy and is based on the hypothesis that there will always be natural resources to meet consumer demand.
However, the growth of the world population, the increase in the demand for consumer goods, the technological revolution and the limitation of natural resources provoke a necessary rethinking of this linear model. In the face of this culture based on “extracting, manufacturing, using and throwing away”, the circular economy emerges as a new economic model that imitates the natural life cycle, where nothing is wasted.
Circular economy implies the use of resources in a more environmentally friendly way and “closing the circle” of the life cycle of consumer goods, favoring repair, reuse and recycling. In this paradigm waste does not exist, they are valuable resources that have a utility.
“On a circular path, European GDP could grow by as much as 11% by 2030 and 27% by 2050, compared to the percentages of 4% and 15% in the current scenario”
Benefits of Circular Economy
This perspective brings environmental, social and economic advantages. Circular economy also speaks of eco-design, collaborative economics, extracting maximum value and performance from products, services and resources, saving energy and reducing greenhouse gas emissions, which cause climate change.
One of the most outstanding international references in this field is the Ellen MacArthur Foundation: considering that the linear consumption model is unsustainable in a world where natural resources are limited, the Foundation promotes the circular transition and quantifies its economic benefits in several studies. Its report Towards the Circular Economy shows several examples of these opportunities:
- Economic growth: on a circular path, European GDP could grow by as much as 11% by 2030 and 27% by 2050, compared to the percentages of 4% and 15% in the current scenario.
- Material cost savings: annual material cost savings would amount to USD 630 billion, or 8% of annual turnover. In the case of fast-moving consumer goods, an additional potential of up to USD 700 billion is estimated worldwide.
- Job creation: Encouraging the use of recycled materials could create 100,000 new jobs in the next five years.
Europe in the driver’s seat
Aware of the importance of the circular economic model, the European Commission has adopted an ambitious package of measures, ranging from production and consumption to waste management. It will mobilise €5.5 billion for waste management and €650 million under the Horizon 2020 programme for investments in the circular economy.
Whether it is a commitment to reduce environmental impact, an increasingly demanding regulatory framework or the opening of new markets, the circular economy has become an opportunity that companies cannot afford to miss.
Video about circular economy. Source: Whymaps / Cotec.