Circular Economy and Sustainability

According to a report only 9% of the world is circular. Our current economy is hardly sustainable and follows a linear model. The core tenets of the linear economy include the wasteful take of resources – make use of said resources, which further generates waste that is then disposed. This vicious practice is detrimental to the environment, which cannot supply the growing populace of our planet with essential services, and naturally leads to strained profitability. 

The natural environment is rapidly approaching (or surpassing) a tipping point where the planet irreversibly loses its capacity to sustain the biosphere or life as we know it. The conventional linear economic model, which has thrived in the conditions of resource abundance, reaches the limit for supplying the input that humanity needs for sustenance in the rapidly increasing demands of the market. World Wildlife Foundation has estimated that we would require 1.5 Earths to sustain the current rate of consumption. Planetary boundaries, a concept given by Rockstrom in his paper, is a measure of human impact on the ecosystem. It claims that four of the nine boundaries have been crossed: the climate has been altered, the biosphere has lost its integrity, the land-system has been affected, and the biogeochemical cycles have been corrupted. The Millennium Ecosystem Assessment (2013) claims that 15 out of 24 ecosystems that sustain life, as we know, are already in stress and are being depleted.

According to the Ellen MacArthur Foundation (2013), the current economic design results from uneven distribution of wealth by geographic region. Most of the resources are consumed by developed countries, whereas the resources are sourced in increasingly developing regions. Therefore the industrial nations have experienced an abundance of material resources and energy. In this arrangement, the materials have been cheap compared to the cost of human labor. As a result, the producers have adopted business models that rely on extensive use of materials and economize on human work. This dynamic of cheap material / expensive labor has resulted in the neglect of recycling, reusing, and putting much emphasis on waste.

Sustainable Europe Research Institute (SERI) published a report claiming that approximately 21 billion tons of materials used in the production of various goods and services are not incorporated in the final product. They are lost during the transition between the forms of materials, in between production, as residual by-products, due to inefficiency or as a result of storage problems, etc. The unmanaged waste not only loses its original function, but it is also wasted as a source of energy.

Elements of a plausible solution to the ever-growing challenges of meeting unlimited demands with limited resources have been around for decades but only recently been compiled into the conceptual framework of a circular economy. The core ideas of the Circular Economy are the elimination of waste by respect for the social, economic, and natural environment, design, and resource-conscious business conduct. Built on the backbone of these principles, the circular economy has demonstrated to deliver tangible benefits and viability to address the economic, environmental, and social challenges of our days. Sustainability and circular economy (CE) are of growing interest for governments, investors, companies, and civil society. Sustainability envisions a balanced integration of economic performance, social inclusiveness, and environmental resilience, to benefit current and future generations.

The phrase circular economy (CE) itself was introduced by Pearce and Turner (1989), although the concept has deep roots dating back to the 1960s and contributed further by environment-conscious scholars, economists, vocational parties, and others. Based on previous theorizations, and advanced by McDonough and Braungart’s concept, the circular economy is today defined as: “an economic system that aims to keep products, components, and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.” Its importance is implied by the fact that global organizations such as the World Economic Forum in 2016, also adopted the interdisciplinary composition of the circular economy.

The European Union has adopted circular economy principles as part of their sustainable development strategies, defining different areas of actions within the EU Action Plan for the Circular Economy. This has given rise to several new industries focused on recuperating, scraping, cleaning, reusing old products to make new ones, with the ambition that all waste can one day be a resource. The more an industrial organization reuses and cycles its waste, the closer it approaches the idea of the circular economy and being more profitable and less harmful to the environment. CE mainly promotes the reduction of virgin material consumption and the adaption of clean technologies. Some of the strengths of the circular economy are:

  • Proficiency in the reverse material flow cycle is a potential competitive edge.
  • Elimination of waste from the value chain has the quantifiable benefit of reducing systemic and direct material costs and diminishing resource dependence.
  • Incorporating the attributes of CE in the R & D phase of operation yields spurs progress in material sciences and yields the development of
  • higher quality and more durable components.
  • Due to the closed-loop processes, the economy grows less exposed to price fluctuations of the materials, and the flattened cost curve ultimately results in more efficient use of resources in terms of both value and volume.
  • Externalities are associated with the use and flow of material, and lower material consumption decreases the exposure to externalities.

The transition towards a sustainable value creation can be prompted by three circular business strategies: narrowing, slowing, and closing the loops. These nomenclatures refer to the mechanisms by which resources flow through a system:

Narrowing loops: This strategy aims at using fewer resources per product, calling for higher resource efficiency. In other words, “do more with less.” This is where resource maximization tactics such as lean manufacturing come into play. Although this question is already widespread in the linear economy, focusing exclusively on narrowing loops disregards other aspects of the circular economy. What about the products’ quality or afterlife?

Slowing resource loops: These tactics work on extending products’ lifetimes to slow down the flow of resources. This includes designing long-life, repairable, and manufacture products and can mean investing extra resources that would eventually be offset by the longer use-cycle of products. The slowing loops approach includes long-life product design, emphasizing design for attachment and trust or durability, and product life extension, focusing on ease of maintenance and repair, upgradability, or adaptability.

Closing resource loops: This strategy closes the loop between post-use and production, resulting in a circular flow of resources, from disposal back into the production, avoiding waste in the first place. Recycling is the most prominent example of closing a resource loop. Strategies to close material loops comprise the design of recyclable parts and goods (design for a technological cycle and biological cycle, design for disassembly and reassembly).

Thus circular economy is a viable, sustainable, and unavoidable alternative that is capable of coping with the challenges. The collection of concepts composing the circular economy enables reducing the waste by incorporation of reusable components of goods by design via closed loop and cascaded approaches, containing the dependence of the economy on material and energy inputs, increasing the resilience of the economic system, the preservation of the environment, supplying the growing demands of the ever more populated planet and improving the operation ability and cost efficiency of production.

The transition to a circular economy holds challenges and opportunities at a community level as well. Innovative business models and policy frameworks can help drive towards sustainable systems, but a new social logic of consumption is equally necessary to change the way we use and consume goods and materials. Many community-based initiatives can encourage citizens to use shareable goods, exchange usable products, and learn how to repair goods before they reach their real end-of-life. Sharing and repairing ideas can be a great means to foster a circular societal shift at the individual and communal levels, creating economic, social, and environmental advantages.


  • Linear Economy versus Circular Economy: A comparative and analyzer study for Optimization of Economy for Sustainability, (Sariatli.F, 2017), Visegrad Journal on Bioeconomy and Sustainable Development,
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