The Circular Economy

By Rachel Dzombak

“Let’s face it, the universe is messy. It is nonlinear, turbulent, and chaotic. It is dynamic. It spends its time in transient behavior on its way to somewhere else, not in mathematically neat equilibria. It self-organizes and evolves. It creates diversity, not uniformity. That’s what makes the world interesting, that’s what makes it beautiful, and that’s what makes it work.” 

– Donella Meadows

With more than 3 billion consumers entering the middle class over the next 2 decades, critical resources including water, food, and energy are more in demand than ever before. In our current economic system, most products end up landfilled after a single use, and only a small percentage are reused or recycled. A circular economy is an economic model where all products are remade, repaired, resold, or recycled. The closer we get to implementing a truly circular economy the better off our economic system will be for people, businesses, and the planet as a whole.

During the last week of June, 17 students from universities around the world (including Gobeer Rachel Dzombak) gathered in London to discuss how to implement a circular economy during an intensive Summer School. The Summer School serves as a kick-off for a year-long fellowship during which time students complete innovative projects around the circular economy with input from industry partners. The Summer School is a joint effort between the Ellen MacArthur Foundation and the Schmidt Family Foundation.

2015 Schmidt-MacArthur Fellows

What is the circular economy?

The circular economy is an industrial system that is restorative or regenerative by intention and design. [1] Instead of disposing products at the end of their life, businesses within a circular economy would seek to capture materials and derive further value from them through new applications. Key principles of the circular economy include utilizing sources of renewable energy, discontinuing use of toxic materials, and eliminating waste from product life cycles through innovative systems, designs, and business models.

Why should the circular economy exist?

Our current system of consumption is highly linear. Manufacturers take natural resources, make products, and sell them to consumers, who dispose of them after usability ceases. In 2010 alone, 65 billion tons of raw materials entered the economic system, and less than 40% were composted, recycled, reused, at the end-of-life [2]. Constraints on natural resources including water, energy, and minerals are increasing rapidly. A new system that extends and expands the usable life of materials is needed now more than ever before.

How can we bring a circular economy to fruition?

Implementing a circular economy will require input and action from a wide array of stakeholders. Policy makers, consumers, and business leaders will need to work together to design new systems at scale. First and foremost, companies need to recognize the business opportunities that exist when the value currently embedded in waste is captured and leveraged. This will provide incentives to create new circular business models. Additionally, research and attention is needed to better understand how countries with a burgeoning middle class can also participate, if not drive, the circular economy. A truly circular economy will need to be implemented on a global scale if it is to be successful.

The Circular Economy Going Forward

The Schmidt-MacArthur Fellowship is a great proxy for what the circular economy needs: diverse and motivated individuals ready to form partnerships and create change. Companies successful at implementing circular business models, such as Desso, Philips, and Caterpillar, have managed to integrate efforts across design, finance and sustainability. Multi-disciplinary conversation is required to bring a circular economic model to fruition. Most companies still operate with teams in silos, preventing collaboration, innovation, and ultimately, large-scale change.

 

[1] The Ellen MacArthur Foundation. Towards a Circular Economy. 2012.

[2] OECD 2012