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The Latest on Circular Economy

5/15/2019

71 Comments

 
Picture

How Can We Accelerate the Transition to a Circular Economy? 
How can we harness the power of business to resolve our economic, environmental, and social challenges? There are opportunities to profoundly change our economy, serve our community and safeguard our environment. The circular economy model is regenerative by design and requires us to rethink what we buy and how we use, reuse, reuse, repurpose and then finally if absolutely necessary recycle any item. 

  • Global Trend 1: Industry Aggregation and Agglomeration 
Development processes  form the cornerstone principle of the circular economy, where the waste streams from one industry become the material inputs for another and thus represent a marginal income stream. This is already happening on a small scale. At a larger scale, the process becomes harder, but the benefits are greater. The economic yield on secondary waste streams increases with higher levels of waste stream aggregation and increasing economies of scale.

  • Global Trend 2: Industrial Design Reform
Circular economic ideas can be applied to the design of individual products and to industrial systems as a whole. This concept is known as cradle-to-cradle production where products are designed to recycle, reuse or simply use less material themselves. Industrial designers are expected to create products that are financially viable but have minimal impact on waste. Man-made products thus simulate natural processes of degradation such as dead organic material that provide nutrients for future organisms’ generations. This design goal, known as biomimicry, is another example of how a template for waste processes is provided by the natural environment. Moving to cradle-to-cradle production, however, is not trivial and requires major change. Industrial design is currently characterized by planned obsolescence and tailor-made and unique parts that make it difficult to replace. Extending product life will mean a fall in suppliers ' revenue, but manufacturers may learn lessons from other industries like music, television or even private transport that are moving towards subscription-based services. Subscription provides a better business model for applying concepts of circular economy. A steady supply of this recycled material is required for a product designed with recycled materials to be financially viable. The type of recycling infrastructure that would provide secondary raw material industrial volumes is rare worldwide and requires significant technical development.

  • Global Trend 3: Product Service Systems
Consumer behaviour also needs to change in order to replace the linear economy with the circular economy. Companies will have no incentive to change their business models to recycle and use less input material without an apparent demand. Consumer product business models have increasingly shifted from a product-based system to a product service system (PSS). A product-based system involves companies selling discrete goods to consumers, encouraging producers and marketers to create more products to sell to more buyers to make more profit. This has been the traditional business model for consumer products and is rooted in technological constraints, habit force and the need for individuals to control and own objects. Alternatively, a company does not sell a product in a PSS, but rather satisfies a requirement, and the product is merely a conduit to meet consumer needs. This can be seen in ridesharing services such as GoGet or OBike, and even in office spaces shared. These business models prioritize access over ownership and take advantage of these goods ' idle capacity.
What Can We Do Now?

While some of these circular economy concepts are being applied across the world, there remain many legislative gaps and technological barriers to global implementation. In the short to medium term, the linear economy will remain prevalent. In the meantime, the following actions have been identified as important steps towards the transition to a circular economy:


  • Pricing of negative externalities through taxation and trading schemes
  • Fiscal support for businesses transitioning to circular economy concepts
  • Further research and development in materials science for more efficient identification and separation of plastics
  • Using data and information systems to create databases of secondary raw materials
  • Establishment of secondary raw materials commodity markets
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    Sandra Anani is passionate about sustainability, with over 19 years’ experience. She has dedicated her career to sustainable development and communications.

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