Circular Economy is an economic model which aims to minimize environmental impact of production and consumption processes with refurbishing, remanufacturing and reuse of products. It aims to protect nature and human prosperity by minimizing the potential waste.
There’s three principles of a circular economy: eliminate waste and pollution, circulate the products by protecting their quality and healing nature. So what are today’s conditions that create those principles? How can a circular economy create changes in the environment and in our society? First of all, we’re going to analyze our current economic system, then we’re going to analyze how we can eliminate the problems created by our economic system.
Our current production and consumption model, linear economy, is an economic model that spreads all over the world after SecondWorld War and that many of the countries adapt in their own economic system. Linear economic model prioritizes economic growth. It lies on a principle that if the density of production is high it can supply the demand. That’s how companies can gain high profit. However the overproduction triggered by this system causes overconsumption and overconsumption triggers overproduction. Wastes created by overproduction are emitted to nature and this situation causes climate crisis, global warming and many environmental issues. If we analyze more detailed our current economic system we can see better the cause of the problem: raw materials are obtained, then a product is produced by processing raw materials and instead of reprocessing waste obtained from the production they are disposed to the nature.
Source: Edx, Circular Economy: An Introduction
The density of this process is augmented for economic growth and supplying the demand of growing population and it triggers accumulation of waste. This situation caused many environmental issues and a climate crisis. According to measurements made on 3 July 2023, the global average temperature broke a record with 17.01 degrees celsius*. The 2 degrees rise in global average temperature causes many natural disasters and it threatens the prosperity of society. Can we create a model which prioritizes the environment and prosperity of society? So at this point, the circular economy steps in.
A Circular economy approaches the production process differently than our current system. It focuses on processing wastes at the end of the production process by the principle of nothing is a waste in nature. That’s how production processes become circular instead of linear by processing wastes in different manners such as recycling, refurbishment, and repairing. In the domain of consumption, renting, sale of durable products, etc. are focused on. Consumers buy a service instead of a product by renting, sharing, etc. The best example of that is the service given by a company called ‘Riversimple’. This company allocates cars that work by hydrogen to its customers by annual membership.
Source:Edx, Circular Economy: An Introduction
How can a circular economy solve current problems? Thanks to the circular economy we can obtain raw materials easily: materials obtained by recycling will be circulated in production processes again. That reduces the exploitation of resources and minimizes our impact on nature. 62% of GHG emissions originated from production and %38 of it originated supply of products. If we switch to a circular economy, the greenhouse gas emission of the EU reduces by over 56%. Additionally, companies will obtain raw materials not in first hand but by recycling. That leads to companies being less affected by the fluctuation of raw material prices and the reduction of production costs. Also, the company’s dependence on raw materials will be reduced and long-term planning will be easier.
When we look at the macro level, reobtaining raw materials will reduce the imports of raw materials of countries and it creates new job opportunities. Also, innovations create new job opportunities and that’s how the job market will be expanded. The Circular economy will create over seven hundred thousand new jobs by2030 only in the EU region (European Parliament, 2023**). That’s how the competitiveness in the economy will be enhanced.
To conclude, our current production and consumption model pollutes the environment and threatens human prosperity. We can approach our current economy differently by a circular model. That’s how we protect the environment and the prosperity of societies. So in which sectors can we apply a circular model? That will be our next article’s topic.