With growing pressure to respond to the risks of climate change, governments and private actors around the world are developing new approaches to promote sustainable practices. One of the newest and most ambitious approaches seeks to eliminate the concept of waste. It's known as the circular economy. The concept has received wide attention in Europe and China, and more recently in the Americas. Already, international companies such as Google, Unilever, Renault, Cisco, and Philips have rolled out major company-wide circular economy initiatives.
What is the Circular Economy?
The circular economy stands in contrast to the existing so-called linear economy. A product in the linear economy creates waste during every step of production, distribution, and use, from resource extraction to manufacturing to transportation emissions. After people purchase a product in the linear economy, it will usually end up in a landfill, and the cycle repeats.
But the circular economy aims to eliminate the concept of waste in the process of production and disposal. In a sustainable circular economy, a company creates a product by minimizing resource extraction or sourcing materials from renewable sources. The company sells or leases it to the customer, and at the end of the product’s useful life, the customer might compost the product, recycle it, or return it to the company for repair so that it can be resold or leased to another customer.
Circular economic practices have already grown in certain industries. One example of this has been seen in companies that lease an item of clothing to a customer through a subscription model. For example, a customer leases a pair of jeans for a year, and at the end of the lease period, returns the jeans to the company, which then refurbishes the item and leases it to a new customer.
Rather than the original customer buying the item of clothing and disposing of it at the end of its lifecycle, the circular model extends the product’s life, and eliminates waste and disposal by having the product returned and reused again. The company might also construct the jeans out of a biodegradable material so that it can eventually be composted. The circular business model is one of sharing, not ownership.
How can the model of the circular economy apply to cities? Circular cities provide an avenue through which the circular economy can be implemented by various stakeholders. Businesses, institutions, and citizens work together within a city to promote sustainable development and reduce city-wide emissions.
Some cities have already begun to adopt circular economy frameworks. In 2015, Amsterdam became the first city to announce its commitment to become a fully circular city by 2050 after a study found that implementing the circular economy in a city would boost the economy, create jobs, and reduce greenhouse gas emissions. The city’s action plan has included policy initiatives such as having 65% of all household waste separated by 2025, emissions-free traffic by 2025, and a 50% reduction of the use of primary raw materials such as minerals, fossil fuels, and metals by 2030. As Amsterdam seeks to meet the goal of becoming a fully circular city by 2050, it has also launched innovation programs and research initiatives focused on the circular economy.
The Stakes for the Circular Economy
The circular economy doesn't just challenge individuals to rethink the value of resources. It seeks to reduce resource extraction by restoring and reusing resources, and it seeks to eliminate waste through recycling and remanufacturing. This is critical in the transition toward a more environmentally sustainable economy. The circular economy draws from nature itself, whose biosphere is self-sustaining, restorative, and regenerative all on its own.
But can the rest of the world follow Amsterdam’s lead on circular city planning? With approximately 70% of the global population projected to live in cities by 2050, cities play a critical role in reducing global environmental footprint. Case studies by the Ellen MacArthur Foundation, an organization that works to advance the circular economy, show that some cities are already making the transition toward becoming circular.
However, there is still much to be done globally, as Circle Economy, an organization that conducts research on the opportunities for the circular economy, released a study in 2019 that found that the world’s economy is only 9% circular. This raises the question of whether the circular economy can even exist within current political and economic structures. The transition to a circular economy will require both a systemic shift and a transformation of current political and economic structures in order to make the transition toward a more environmentally sustainable and equitable world.