Circular Economy

The Circular Economy is a framework that aims to reduce environmental impacts and generate economic growth by eliminating waste and reusing resources. This model is an alternative to the traditional linear economic system, which presumes the existence and accessibility of unlimited natural resources, and in which a product’s life cycle ends with its disposal in a landfill.1 In contrast to a linear model, a circular model is inspired by the natural world, where resources and energy are cycled, and waste is regenerated. It is based on three principles: designing out both waste and pollution; using products and materials for as long as possible; and regenerating natural systems. This model represents a systemic shift to preserve and restore natural resources, increase system efficiency, reduce environmental impacts like carbon emissions, and create jobs and stimulate economic growth.2 An ideal circular economy functions using only renewable energy sources, thus eliminating economic dependency on finite resources while also creating economic, natural, and social capital.

Circularity differentiates between a material’s technical and biological cycles. Only products made with biologically based ingredients, or nutrients, are designed to be returned to the biosphere. Biological nutrients can go through regenerative processes like composting and anaerobic digestion, which provide the biosphere with renewable resources. Technical, or durable nutrients, like metals and most plastics, would be harmful if returned to the biosphere. Instead, these materials are designed to enter cascading loops of repair, recovery, reuse, remanufacture, or recycling.3 Circular systems use tighter loops that prefer maintenance and reuse to recycling, which requires more energy and maintains existing embodied energy. Under circularity, technical products are designed to maximize the time spent in each cycle as well as the number of cycles. Products like electronics that tend to be upgraded frequently are designed to be compatible with these upgrades, minimizing the energy needed to produce them and maximizing their value. These kinds of products also replace the concept of a consumer with that of a user. This means that when possible, durable products are leased or rented by manufacturers, or shared, rather than purchased. If they are purchased, there are incentives or contracts to guarantee return after their primary use. By designing and optimizing products and materials so that they can later be disassembled and reused, circularity eliminates waste.

The entire cycle is fueled by renewable energy, which reduces resource dependence and improves systems resilience in the case of disasters or shortages. It eliminates the use of toxic chemicals, which cannot be reused or returned to the biosphere.4

Implementation of a circular economy requires innovative business models based on longevity, renewability, reuse, repair, upgrade, refurbishment, capacity sharing, and dematerialization. Many of these will come from small businesses and entrepreneurs, but larger companies that control several vertical steps of the linear value chain have the power to make circularity mainstream by leveraging their vertical integration and market share. Companies also need to prepare and learn more about circular design in order to implement these business models. Specifically, it is important that they have expertise in designing products that will last and can be easily sorted, separated, or reused. Companies should also learn how to effectively select materials and use standardized components that account for waste or by-products. In order for products to effectively move through their respective technical or biological cycles, businesses must contemplate elements like chain logistics, sorting, warehousing, risk management, power generation, and even molecular biology and polymer chemistry. But the private sector cannot independently make circular economy the predominant model—it must be supported by policy makers, educational institutions, and popular thinkers. With their collaboration, effective environmental policies will be implemented, and businesses will gain access to the resources necessary to apply circular systems.

The circular economy model is a composite of several influential models, including Walter Stahel’s functional service economy; William McDonough and Michael Braungart’s Cradle to Cradle philosophy; Janine Benyus’s work on biomimicry; Reid Lifset and Thomas Graedel’s industrial ecology; Gunter Pauli’s blue economy system; and natural capitalism by Amory and Hunter Lovins and Paul Hawken.5

  1. Circular Economy Club
  2. Ellen MacArthur Foundation
  3. Circular Design Guide
  4. European Commission
  5. Ellen MacArthur Foundation


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