What is a Circular Economy?

circular economy

A circular economy is an alternative, sustainable economic model of production and consumption. It is one that reduces waste and pollution by making sure that we get as much value and use out of products and materials for as long as possible.

A linear economy is a ‘take, make and waste’ economy. The goal is to get you, the consumer to buy products that you don’t need or have a single-use. Packaging is one example of an item that is only used once and then thrown away when it is no longer needed.

In a circular economy, you are encouraged to buy useful products that you will reuse over and over again. The term “circular” is used because the overall process creates zero waste and it is constantly cyclical. This model can be applied to any industry, but it’s most commonly associated with the manufacturing sector.

Consumption and value

Providing value is central to both business models. However, the circular economy aims to extend the entire value chain by extending the lifecycle of products. The circular economy recognises that we have finite resources that will run out eventually. So waste management is crucial especially for limited resources like rare earth metals.

It is important to be aware that a circular economy views consumption as an activity related to food and organic matter. Technological resources are seen as items to be used, rather than consumed.

The circular economy

A circular economy can be achieved through various ways such as recycling, upcycling, sharing and reusing. Some examples of circular economies in practice include:

– Production of goods with minimal impact on the environment.

– Sustainable energy sources such as solar panels

– Packaging that can be returned for recycling or reuse

-Plant waste that can be composted and returned to the soil

Effectively, the circular economy is one that takes a different approach to resource use and waste management: it avoids the build-up of negative environmental impacts. The global ecosystem deserves better than what we have been giving it so far.

Circular ecosystems are natural:

As a species, we need to take a leaf out of nature’s book and change the way we function on the planet:

“Unlike natural ecosystems, which operate in cycles—plants grow in soil, animals eat plants, dung replenishes soil—the industrial economy is largely linear.”

National Geographic

The capitalist economy will not be sustainable in its current form because resources will become scarce. Our current economic model is already causing climate change issues such as biodiversity loss. So, we need to adopt practices that are more eco-friendly.

Reducing waste

The textile industry is a great example of how waste is created. The process starts with the extraction of raw materials from the ground and ends with the production of textiles. The silk industry, for example, has a lot of waste that is often overlooked. Introducing new technologies and innovations can help reduce waste in the textile industry. For example, there are new machines that recycle old clothes into new textiles without using any virgin materials.

We should be designing things in a way that wastes as little of the raw material as possible. By using materials that can be recycled, we can reduce the amount of virgin material we extract from the earth. This is a more sustainable solution for resource extraction and reduces our carbon footprint.

Plastic, not so fantastic

Humans are in love with plastic. But the plastic we use is environmentally unsustainable. Plastic is a petroleum product and it takes 200 years to degrade in nature. We have been using plastics since the 1950s and today, there are over 6 billion tons of discarded plastics. In 2015, humans generated about 300 million tons of CO2 from burning fossil fuels and all the plastics we’ve created accounts for 10% of that figure.

Plastic is now one of the most pressing environmental issues due to the accumulation of plastic waste that is filling up landfills and polluting our oceans. The production and consumption of plastics have become a huge burden on the environment. Plastics damaging effects are felt across the world but most notably in Asia where it accounts for 60% of all solid waste.

In order to save our planet from being turned into one giant garbage dump, it is imperative that we take action to reduce the number of plastics we produce and consume.

We need to rethink our consumption habits and be more responsible. The first step is to educate ourselves about the problem so we can change our behaviour.


Recycling is a process of processing and treating waste materials so they can be used in the production of new materials.

The benefits of recycling are endless. It reduces environmental pollution, saves energy, reduces natural resources and fossil fuels, and provides jobs to many people.

With increased awareness of environmental sustainability, there has been a rapid growth in related industries such as recycling plastic. It is expected that the global market size for recycled plastics will reach $56 billion by 2026.

Related: A quick guide to finding green jobs

How can I be part of the circular economy?

  • Rent instead of buy
  • If you buy, use the item (e.g. clothes) at least 30 times
  • If it’s broken, get it repaired
  • Or upcycle it

Our current economy

Waste happens at each stage of the supply chain process. As a consumer, we might purchase something but it is not used up completely and winds up in our trash bins. By buying things that are durable with long usage times, we reduce waste produced in the supply chain. We can also recycle stuff to use in other things or repair broken items instead of replacing them with new ones

Extraction of virgin resources e.g trees in Brazil for paper, coal in Indonesia for power generation

Manufacturing of products (e.g. plastic drinking bottles) to make them available on the market

Final consumer purchases and uses the product (e.g. drinks from a bottle)

Discards or disposes waste at end of life i.e. throw into the bin or takes to landfill

The linear economy is the industrial economy in which natural inputs are extracted, processed, manufactured, distributed and disposed of at rates that are too fast for the environment to continue supporting life.

Understanding that waste streams are often a result of this linear economy, it is essential to create products that are circular in nature. This way consumers can contribute less to our already-growing waste problem.

Technology has made it easier for designers and manufacturers to use circular design principles when creating products. The circular design principle states that all materials should be recycled or reused in the production of new products. This will greatly reduce our carbon footprint while simultaneously reducing our dependency on fossil fuels.

Our current economy focuses on using resources to create products, which are then discarded. Waste streams are a result of this cycle and can be thought of as a by-product. Waste streams are the waste that cannot be used or recycled during the linear economy.

A society’s waste stream is controlled by its economic system and social organization. Under a linear economy, there is no closed loop where resources continually renew themselves for use in production. The only way to break from this system is by embracing circularity instead.

Investments in sustainable projects can generate a lot of income as well as long-term benefits for society as a whole. This includes things such as investments in renewable energies, environmental protection, sustainable agriculture, recycling, and so forth.

Can a circular economy make waste obsolete?

It’s a common misconception that a circular economy eliminates waste. While it does greatly reduce the amount of waste produced, some waste will still occur. However, this is not something to fear as there are ways to deal with the remaining waste.

Stockpiling raw materials can help ensure supply and demand (especially for recycled products). This helps avoid shortages and ensures people are buying products they need, instead of wasting resources.

It’s understandable to fear the unknown, but rest assured that experts around the world are working hard to establish the best practices for reducing waste and transitioning to a circular economy. Don’t let fear stop you from making changes today.

The first step to transitioning a linear economy to a circular economy is to reduce consumption. This means reducing waste and altering our method of production from “make, use, dispose of” to “reduce, reuse, recycle.

Is circular economy realistic?

Circular business model innovation has started across the globe. For example, there are a number of technologies that have been identified to enable the industrial-scale transition to a circular economy. These range from industrial symbiosis to 3D printing and nanotechnology.

Industrial symbiosis is when two or more different industrial processes share waste products that can be used as raw materials for another process. This reduces waste at the source.

3D printing is another technology that has enabled manufacturers to make products with fewer materials. By using 3D printers, items can be printed in one piece instead of multiple pieces and then glued together. This significantly reduces the materials required compared to traditional production methods.

Other circular economy strategies include extending the life of clothing by repairing or returning clothes for re-use.

Some products are truly necessary, so try to buy those items second-hand instead of new. This not only reduces your carbon footprint but also saves you a lot of money. In most cases, buying second-hand does not reduce the quality of the product either.