Circular economy

The global economic system is conventionally built on a linear model of production and consumption, which is dependent on an unlimited supply of natural resources that can be extracted, processed and discarded. This model creates a significant amount of waste along the entire value chain with significant impacts for GHG emissions. For example, more than a third of all food produced is wasted during either production, distribution or after purchase (FAO, 2015).

The circular economy takes a more holistic view of the production and consumption paradigm and considers where value can be re-captured from waste within the value chain.

The Ellen MacArthur Foundation (2015) defines a circular economy as:

[An economy] that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times, distinguishing between technical and biological cycles. This new economic model seeks to ultimately decouple global economic development from finite resource consumption.

The circular economy focuses on reimagining and redesigning production and consumption for individual businesses and consumers, but also wider industrial systems involved in creating goods and services. This involves the following three main features:

  1. removing waste in the production process through circular design
  2. reusing and recovering products and materials
  3. regenerating natural resources and systems.

(Ellen MacArthur Foundation, n.d.)

By reducing the need to extract new resources, circular approaches can decouple economic growth from resource use and, consequently, environmental impacts (Ellen Macarthur Foundation, n.d.). Economic growth need not be hindered, as organisations can develop profitable and innovative business models and collaborative approaches to ensure that value is extracted and retained.

To adopt a circular approach, organisations need to implement business models that facilitate the design and production of longer-lasting goods. These sustainable goods should also be designed from the outset with the potential for maintenance, reuse and recycling (Howard & Webster, 2018).

Note: The importance of design for net zero

Design can be defined as the process of thinking and planning before acting. Opportunities to design for net zero are greatest if undertaken at an early stage, since the design decisions and financial investments are locked-in once a design progresses and production has started.

The importance of early-stage design is even greater when considering capital projects, such as buildings and other infrastructure, since the cost of changes increases dramatically once construction is underway, and even more once completed. Nevertheless, in countries with substantial stocks of historical infrastructure, retrofitting existing buildings to improve energy performance is still important (Georgiadou, Hacking & Guthrie, 2012).

For optimal results, the full life cycle needs to be considered at the design stage, whether designing products or infrastructure. Designers need to grapple with the trade-off that may exist between the energy needed for the initial production or construction, versus the energy required for the use of the product or service. For example, a road with fewer steep inclines is more expensive to build but reduces the amount of energy required by road users.

Herein lies a dilemma, since the developer does not share in the benefits that accrue to the end users; as such, government intervention may be needed. A product-related example can be seen in the introduction of energy consumption labelling for major appliances, such as fridges and washing machines (Georgiadou, Hacking & Guthrie, 2012).

Adapted from: Ellen MacArthur Foundation, 2019 by CISL