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    What is a Circular Economy?

    For centuries, virtually all economies in the world have been linear economies in which natural resources are extracted or harvested and transformed into products, which are discarded at the end of their useful life, with a lot of waste generated at every stage. A circular economy eliminates waste at every stage and restores or regenerates resources. The planet’s resources are finite, making the transition to a circular economy a matter of necessity.

    Several organizations dedicated to moving us toward a circular economy offer definitions of that highly desired state. According to the World Economic Forum, a circular economy is “an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals … and aims for the elimination of waste through the superior design of materials, products, systems, and business models.”

    Since 2010, the Ellen MacArthur Foundation has been working with education institutions, businesses, and governments to support and accelerate the transition from what they describe as a “take-make-dispose extractive industrial model” to a circular economic model that “[decouples] economic activity from the consumption of finite resources and [designs] waste out of the system,” with a transition to renewable energy sources. The Foundation positions the circular economic model as a “systems solution framework” for taking on the world’s big challenges, such as climate change, the loss of biodiversity, and pollution. So what are the three principles of circular economy?

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    Three Principles of a Circular Economy

    All models rest on a foundation of these three principles of circular economy:

    • Designing to eliminate waste and pollution
    • Keeping materials and products in use
    • Regenerating natural systems

    Designing Our Waste

    In a truly circular economy, there is no waste. Waste is designed out of both products and processes. Products are designed to have the longest possible useful life and to be dismantled easily for reuse or recycling. Product reuse, repair, re-manufacturing, and recycling become the norm by design.

    Keeping Materials and Products in Use

    Recovering and restoring products, components, and materials for reuse keeps them and all of their embedded carbon out of the waste stream, out of landfills. It also reduces the extraction of natural resources and the energy demands of extraction activities.

    Regenerating Natural Systems

    Transitioning to renewable energy sources is key to making a circular economy a reality. Reducing our dependence on resources is essential to transforming production systems by design. In a circular economy, production processes as well as products are designed for zero waste.

    Benefits Of a Circular Economy

    The benefits of moving from a linear economy to a circular one are many and far-reaching.

    Environmental benefits are derived from applying the principles of a circular economy not only in the design and manufacture of products but also in our farming and food systems. These benefits include:

    • The reduction of greenhouse gas emissions from the use of renewable energy
    • Greatly reduced disposal of waste materials in landfills, which also lowers greenhouse gas emissions
    • Decreased pollution from resource extraction activities
    • Elimination of toxic materials from product designs and production processes
    • The return of nutrients to the soil through composting and other processes that reduce soil degradation, eliminating the need for chemical fertilizers

    Benefits for businesses include:

    • Lower material needs and input costs (up to 70%) according to recent studies
    • Lower energy and waste management costs
    • New markets and profit opportunities
    • Less vulnerable and volatile supply chains
    • Demand for new services to extend product life and manage products at the end of their useful life (for example, remanufacturing, refurbishment, etc.)