What is the circular economy?

The concept of the circular economy (CE) has rapidly gained popularity over the past few years, and is currently being promoted by the EU, several national governments and many businesses around the world. There are numerous definitions of the circular economy, but perhaps the simplest is that it’s a cradle-to-cradle approach – one that aims to close the loop and bring consciousness and ownership to the entire lifecycle of a product.

It’s about manufacturers taking responsibility for their product from production through to disposal, recycling or reuse. It’s the same kind of system that many countries use for bottle recycling, for example. Bottles are sold with a small deposit fee to incentivise consumers to to bring them back, they are then collected by a retailer, shipped back to the manufacturer, cleaned and reused.

Now imagine this idea being implemented everywhere, for all kinds of products. No longer would you be left wondering what to do with old electronics that don’t work anymore, debating if you should just throw them out or spend time and effort to look up where you can recycle them, and then making a special trip to a special electronics recycling location that’s probably out of your way.

Or with clothes – H&M is one retailer that is now collecting old textiles, whether they can be reused as clothes or not. In exchange, they offer customers a discount coupon for their next purchase. Similarly, some sustainable razor companies now have programs where you can safely send back your old blades instead of throwing them away.

In this way, the circular economy aims to minimise waste, make the most of resources and reduce externalities. It’s in contrast to the traditional linear economy, which operates along a one-way chain of resource extraction, production, and disposal – which the manufacturer isn’t responsible for.

Moving away from the linear model will help promote a more sustainable society, allow us to design waste out of the system, and slowly separate productive economic activity from the consumption of finite resources.