The circular economy definition includes keeping resources in use for as long as possible, extracting the maximum value from them, and then recovering, renewing and reusing products and their components when they are no longer serviceable. The circular economy replaces a linear take-make-waste economic model with a closed loop model that minimizes waste, emissions and pollution. This process starts at the very beginning of a product’s life cycle: circular product design and production processes can help save resources such as water, metals and other raw materials, avoid inefficient waste management, and create new business opportunities and jobs, according to the EU. Another way to consider what is the circular economy is to think of it as a tool to fight climate change and pollution.
What are the goals and principles of the circular economy?
The circular economy model is based on five principles: using sustainable inputs such as recycled materials and renewable sources of energy, the recycling and reuse of products, materials and components, the notion of product-as-a-service, the use of sharing platforms, and product life extension. The goals of the circular economy include reducing the use of non-renewable resources, cutting emissions, and creating sustainable growth. For example, the fashion industry worldwide generates about 20 million tons of waste each year and accounts for over 10% of global greenhouse gas emissions. By going circular and adopting a sustainable production and consumption model, the fashion industry could make a significant contribution to the global fight against climate change.
What are the opportunities for businesses when moving to a circular economy model?
Businesses that want to remain competitive must rethink their value chains from the point of view of sustainability. Going circular is vital in a world in which more and more consumers are environmentally conscious. They demand to know a product's carbon footprint, and they are increasingly making choices based on how a product is manufactured, transported, packaged, delivered, and disposed of. In addition, adopting a circular business model makes companies more efficient and resilient. It also generates added value, because it turns waste into materials that can be reinjected into the value chain, bringing in additional revenue streams.
The circular economy and cities: why are cities important in the transition to a circular model?
Cities are important in the transition to a circular economy model because by 2050, two-thirds of us will live in urban areas, consuming 75% of the world’s natural resources, producing 50% of global waste and over 60% of greenhouse gas emissions, according to the Ellen MacArthur Foundation At the same time, cities have a high concentration of resources, capital, data, and talent. This means they are centers for innovation, for example in the fields of circular manufacturing, fashion, transportation, food and procurement. Cities that become sustainable by applying the circular economy model to sectors such as construction, energy, mobility, and waste management bring significant economic, social, and environmental benefits to their inhabitants and their economic fabric.