Today, planet Earth faces multiple challenges in the context of urgent environmental impacts such as climate change, biodiversity loss and environmental pollution.
Despite the richness of our planet’s natural resources, estimates indicate that the Earth has now reached its maximum limits in the use of these resources as a result of misuse, unfair distribution, and the waste of large quantities of them outside the consumption cycle.
As the population grows and the Earth’s resources continue to be depleted, we may need nearly three planets by 2050, when the world’s population reaches nearly 10 billion people, to provide the natural resources needed to support current lifestyles.
Linear economic model
Our current economy consumes the planet’s finite resources and converts them into products that produce endless amounts of waste, based on a linear “take, make, dispose” approach: raw materials are acquired, extracted, used to manufacture products, sold to consumers, and then disposed of as waste after single use. It is a polluting system that degrades natural systems and creates resource scarcity, and is the driver of global challenges, including climate change and biodiversity loss.
The Industrial Revolution set the framework for this linear economy, making it possible to produce goods in large quantities at low prices, and at first it seemed as if the supply of raw materials and energy were virtually endless.
planned obsolescence
Planned obsolescence is a prominent feature of the linear economy approach, where products are designed to have a short, limited lifespan to encourage consumers to buy them again.
Planned obsolescence is a business strategy in which a product is planned to become obsolete, i.e. become unfashionable or no longer usable since its design by the manufacturer, so that in the future the consumer feels the need to purchase new products and services offered by the manufacturer as a replacement for the old products and services, thus enhancing demand, and ensuring annual manufacturing of the same product with minor changes to retain its customer base.
Consumers often react negatively to planned obsolescence, especially if new generations of products offer insufficient improvements over previous versions. However, this strategy may be well received by consumers as companies also use planned obsolescence as a means of cutting costs, lowering the price of their products, and increasing their popularity.
IT companies use planned obsolescence to reduce the replacement cycle of personal electronic devices such as smartphones and computers by introducing new generations of software and operating systems that are less compatible with older devices, and designing software to include new features and file types that are incompatible with older versions of the software.
Correcting this unsustainable path requires a qualitative shift in economic and social activities represented by a more sustainable model, the circular economy, by separating economic activity from the consumption of limited resources.
Circular economy concept
The circular economy is based on the principles of reduce, reuse and recycle, and offers a different model to traditional economic activity by prioritizing keeping products in use for as long as possible.
As the name suggests, the essence of this model is to keep resources in the economy for as long as possible, minimize waste generation by designing durable, reusable and upgradable products, remanufacturing products using secondary raw materials and waste extracted from existing products, recycling them into new products, and dismantling, repairing and re-marketing worn-out products, thus extending their life cycle, saving raw materials and thus creating additional value.
For producers, this added value is reduced costs of purchasing raw materials to manufacture new products, even if more materials are used to make the products more durable. For consumers, it is access to goods at lower prices, and the benefits to the environment and society include reduced greenhouse gas emissions, reduced waste and restored ecosystems.
The most prominent models of the circular economy
- Circular inputs
Renewable, recycled or recyclable inputs are largely used in production processes within the circular economy model, allowing for partial or complete elimination of waste and pollution, i.e. waste becomes an asset rather than an obligation that producers pay for its disposal.
Circular manufacturers can expect lower costs for their production inputs as they do not have to be extracted from scarce resources, they come from excess materials and recycled materials.
Circularly designed products do not reach the end of their lifespan, but rather the end of the current use becomes a link and an entry point to the next link.
For example, it is better to recycle used tires and turn them into rubber floor tiles or car parts, rather than exporting them to poor countries or dumping them in vast areas of land that lead to increasing pollution crises in the world. When the tire reaches the recycling stage, all of its original materials are extracted and used to produce new tires.
- Product as a Service
Over the past decades, producers and manufacturers have focused on selling their products once, where ownership of the product passes from the producer to the customer, which limits producers’ responsibility for the rest of the product’s life.
In such a model, producers get the most benefit by selling as many products as possible, without having an incentive to improve quality, lifespan, repairability and recyclability, which in some cases leads to adverse effects such as planned obsolescence, overproduction and lower quality of products.
Conversely, product-as-a-service models have the potential to offer a smarter, more sustainable alternative to this material-intensive consumption. Rather than selling standalone products to customers, product-as-a-service business models focus on outcomes and performance rather than the product itself, and the service provider often remains the owner of the product.
For this reason, the service provider may have an incentive to use the same products or components as much as possible and for as long as possible by redesigning, reusing, repairing or sharing the product.
Cloud storage services are a good example of offering a product as a service, as companies do not need to purchase large and expensive storage media that are subject to damage and replacement later as long as they can rent the service from providers who own this media and are responsible for its continued operation and maintenance in exchange for monthly or annual subscriptions.
- Resource recovery
Resource recovery from consumers focuses on the final stages of the use cycle, i.e. recovering embedded materials, energy and resources from end-of-use products that are no longer functional in their current application.
Circular economy companies derive direct economic benefits from extracting all of their products with recoverable value, their product design focuses on making the value recovery process easy and efficient, and their business model ensures that users are motivated to return products.
For example, mobile phone companies could encourage customers to return their old mobile devices and tablets in exchange for a discount on new products or store credit, while companies could refurbish and resell the returned items or disassemble and recycle the components.
Benefits of the circular economy on the environment and climate
- Eliminate waste and pollution
The circular economy treats waste as a product design flaw, with the design specifications of any product including the fact that its components enter the economic cycle at the end of their use.
Many products can be traded by maintaining, sharing, reusing, repairing, refurbishing, remanufacturing and, as a last resort, recycling them. Food and other biological materials that can be returned to nature can act as fertilizers to replenish the earth, leading to increased production of new foods and materials.
- Reversing climate change
Greenhouse gases that cause global warming and climate change are produced primarily by industrial activities, transportation and energy production, with agriculture and food production also being rich sources of these emissions.
The current linear economic approach is strongly geared towards increasing global temperature, and if humanity continues on this path, it will emit 65 billion tons of greenhouse gases by 2030.
Studies show that by using materials efficiently and circularly in just four key industrial sectors – cement, steel, plastics and aluminium – circular economy strategies could help reduce global greenhouse gas emissions by 40% by 2050, and if we also incorporate circularity into the food system, we could achieve reductions of up to 49% in global greenhouse gas emissions overall.
- Renew nature
The circular economy focuses on replenishing nature’s resources rather than extracting them, through agricultural practices that allow nature to restore soil structure, increase biodiversity, and return vital components to the earth.
Regenerative agricultural practices can significantly reduce greenhouse gas emissions from food production by reducing reliance on synthetic inputs and building healthy soils that absorb carbon rather than releasing it. In addition to helping restore the natural carbon cycle, healthy soils are better able to hold water, reducing the impact of drought, and are better able to absorb water, reducing the risk of flooding.
In addition to the food system, the importance of the circular economy is highlighted in reducing the need for land required to obtain virgin raw materials, and thus these spaces can be used to restore wildlife, preserve biodiversity and repair damaged ecosystems.
