Circular Economy...What's that?
Why is it interesting?
Most western countries are strongly dependent on imports of resources, resulting in political dependencies to countries with monopolies and financial insecurities due to extreme price fluctuations over short time periods. This and the increasing shortage of resources stresses businesses and whole countries economically. Various new technologies, like electric cars, solar power and wind energy, are dependent on scarce materials, increasing the need of stable and reliable resource incomes.
Furthermore, the global aim to reduce greenhouse gases requires a more efficient use of resources. 1
A circular economy reacts to these issues and discovers the potential of unused materials in current waste. It redefines customer relations and ownership and supports new business models to optimize the use of materials and to reduce the demand of primary resources.
How is it defined?
The term circular economy was formed in the end of the 20st century while exploring alternatives to the linear economy. A linear economy describes the majority of the current economic system and consumer’s behavior and can be defined by the chain of actions “extract – produce – consume – waste”. 2
Contrarily, the circular economy is defined as a macroscopic economic system, which is mostly independent of the extraction of natural primary resources. 3 It optimizes the use of materials by increasing the number of lifecycles of products and components. The unavoidable outputs of a system are used as its own or another’s systems inputs. 4
To understand circular systems better, it can be compared to a natural, undisturbed ecosystem, in which waste does not exist. The outputs of one organism is the basis of life for another organism. To think in a more circular way, it is fundamental to realize that waste is not a natural system and that there is a value and use in every material. 4
In a circular economy, this value is recovered and optimized by designing products and services to increase their lifetime and regain their resources. During this economic cycle products, components and resources are continuously kept at the highest possible level of quality. The value of a product is extracted step by step from a high demanding to a low demanding application. 5 This is being displayed in the following graphic with the different levels of application are shown as loops. The inner loops preserve more of the energy used for production and are therefore more desirable. 5
An additional step towards a reduction of resource consumption in the dematerialization of society by using digital alternatives, more efficient and renewable technologies and processes as well as implementing a new concept of ownership.
References
1 Zweiter Monitoring-Bericht "Energie der Zukunft". Berlin: Bundesministerium für Wirtschaft und Energie (BMWi), 2014
2 Karunakaran, Naren : Make in India: Will the programme do well to evolve beyond the 'take-make-use-dispose' model? In: The Economic Times. URL:http://economictimes.indiatimes.com/news/economy/policy/make-in-india-will-the-programme-do-well-to-evolve-beyond-the-take-make-use-dispose-model/articleshow/51032001.cms. Archived by WebCite® at http://www.webcitation.org/6j5WUwqrp .(Abruf 15.7.2016). Mumbai, India: The Economic Times, 2016.
3 Circular Advantage - Innovative Business Models and Technologies to Create Value in a World without Limits to Growth. Dublin: Accenture, 2014
4 Peck, D.; Webster, C.; Bakker, C.: Principles of the Circular Economy. URL: https://www.youtube.com/watch?v=AoZHX4C2ZEk#t=116 (besucht am 07.07.2016). Archived by WebCite® at http://www.webcitation.org/6iom9Av0T. Delft, Niederlande: TU Delft, 2015.
5 Towards a Circular Economy: Business rationale for an accelerated transition. Cowes, UK: Ellen MacArthur Foundation, 2015
