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What is circular economy and why does it matter?

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What is circular economy?

Our current economic system can be considered a “linear economy”, built on a model of extracting raw materials from nature, turning them into products, and then discarding them as waste. Currently, only 7.2 percent of used materials are cycled back into our economies after use. This has a significant burden on the environment and contributes to the climate, biodiversity, and pollution crises.

Circular economy, on the other hand, aims to minimize waste and promote a sustainable use of natural resources, through smarter product design, longer use, recycling and more, as well as regenerate nature.

Besides helping tackle the problem of pollution, circular economy can play a critical role in solving other complex challenges such as climate change and biodiversity loss.

What are some examples of circular economy?

The first example most people think of when they think of circular economy is waste management, but circular economy is in fact so much more.

Circular economy approaches are all around us. They can be employed in a number of different sectors from textiles to buildings and construction, and at various stages of a product’s lifecycle, including design, manufacturing, distribution, and disposal.

In textiles and fashion, there are initiatives that employ regenerative agriculture to produce organic cotton and other natural fibres, using natural colorings and dye, thus ensuring higher quality and safer garments for the health of consumers and the environment. By producing higher quality garments, clothing can also last longer, be repaired, thrifted, and recycled.

In buildings and construction, circular solutions can include reducing virgin material use, re-using existing materials in circulation, or substituting carbon-intensive materials for regenerative alternatives such as timber.

In a circular economy, electronic goods are refurbished, water-soluble, recyclable and truly biodegradable packaging becomes the norm, and animal waste is used as natural fertilizers and processed into biogas for cooking, heating and lighting .

©UNDP Climate Promise

Why is circular economy important for our planet?

Estimates show that we are already using more than the available amount of Earth’s natural resources. If current trends were to continue, we would need three planets by 2050.

In the past two decades, material consumption has risen by over 65 percent globally, reaching 95.1 billion metric tons in 2019. By the same year, an estimated 13 percent of the food destined for human consumption was lost after harvesting and another 17 percent was wasted at the household, food service and retail levels. The amount of electronic waste reached 7.3 kilograms per capita in 2019, and the majority is not managed in a sound way, harming the environment and our health.

For the survival and well-being of people and the planet, these statistics show us the importance of transforming the way we use and respect our finite resources. Studies show that, to return to safe limits of consumption, we need to reduce global material extraction and consumption by a third . Transitioning to a circular economy will be instrumental to achieving this.

How can circular economy address climate change?

A circular economy is essential for fighting climate change.

Currently, material extraction and use amount to 70 percent of global greenhouse gas (GHG) emissions. That means that if we want to significantly reduce emissions, we have to look at “hot spots” of unsustainable consumption and production in high-impact sectors such as industry, buildings and construction, and agriculture.

Studies show us that, through efficient and more circular use of materials in just four key industrial materials (cement, steel, plastics, and aluminum), circular economy strategies can help reduce global GHG emissions by 40 percent by 2050 . And if we also include circular approaches within the food system, we could achieve as much as 49 percent reductions in global GHG emissions overall.

As part of the Paris Agreement, countries are adopting climate pledges – known as Nationally Determined Contributions (NDCs) – to reduce GHG emissions and increase resilience against extreme weather and natural disasters. By ensuring circular economy approaches are embedded into these pledges, countries can accelerate the transition to a low-carbon economy, protect the natural environment, and create green, decent, and dignified jobs as well.

According to the International Labour Organization (ILO), if the world implemented more circular activities such as recycling, repair, rent, and remanufacture, it would create 6 million jobs globally by 2030.

What are the challenges in transitioning to a circular economy? Why aren’t we there yet?

A more circular world is possible, but the transition isn’t a simple one. Several challenges exist.

The first challenge is limited knowledge. Not every country knows about the potential of circular economy or has a strategy in place for creating it. A better understanding of the benefits and impacts of circular economy measures, particularly for climate and biodiversity, is needed.

Businesses, particularly small and medium-sized enterprises (SMEs), as well as other organizations and actors, often struggle to access adequate finance to transition from linear to circular business models or systems. For example, it is estimated that it takes approximately three years for a smallholder farmer to shift from conventional cotton production to organic cotton production, and shifting to circular, regenerative practices can take equally long, if not longer. This transition, therefore, requires not only adequate investment and finance, but also knowledge transfer, community-building, and training throughout the transition period.    

Even if implementing or mainstreaming circular economy practices were easier, assessing their impact may prove to be a challenge. Hence, tracking and reporting progress can often be complex. For example, tracking reductions in “scope 3” emissions (the indirect emissions that an organization or company is responsible for up and down its value chain) presents challenges due to issues such as lack of transparency of supply chains, lack of direct connections with different tiers of suppliers, and complex accounting, among others.

©UNDP Philippines/Jilson Tiu

©UNDP Peru/Giulianna Camarena

Are there working models already? Which countries are leading on circular economy?

Yes, good news! Many countries and territories are already adopting circular economy approaches to shift development and growth to cleaner, greener, and more regenerative ones.

Kosovo* , for example, is supporting innovative solutions for start-ups and SMEs, including the development of a mobile app for identifying environmental pollution and misconduct in urban areas.

Ghana is working to improve urban waste management by supporting entrepreneurs who are building houses made of recycled plastic waste.

Meanwhile, by transitioning to a circular economy, countries like Jordan are creating opportunities for women , allowing them to find employment, learn new skills, open their own businesses and take leadership positions in their community.

The Philippines has enacted a bill that requires large manufacturers to limit the use of plastic packaging and pay for the cost of managing plastic waste.

And an increasing number of countries, such as Mexico, are working to better connect circular economy solutions with their climate action plans . Mexico is developing and implementing training programmes for subnational authorities to identify circular economy actions that will contribute towards the roadmap for implementing the country’s updated NDC.

The island nation of Vanuatu is more circular than any other country whose circularity has been estimated. In 2021, its domestic consumption was estimated to be 59 percent circular . Ranking behind it were the Netherlands with 24.5 percent, and Austria with 9.7 percent. Meanwhile, global circularity has dropped from 8.6 percent in 2020 to 7.2 percent in 2023.

What is the connection between circular economy and Indigenous Peoples?

For a truly circular economy, we, as a collective, need to not only look ahead to new innovative approaches or technologies, but also look back to see what has already worked, and continues to work.

Indigenous Peoples have been implementing circular solutions as a way of life for thousands of years – whether it is through agricultural practices that ensure natural systems are regenerated, or building housing and structures using regenerative materials such as bamboo or adobe bricks.

These experiences and practices offer a lot of wisdom and guidance on how to create a truly circular world. In following principles set by these practices, we can better foster local economies centered around holistic approaches and in the process nurture resilience, reciprocity and respect between people and planet.

How is UNDP supporting countries on circular economy?

Whether focusing on climate change, sustainable energy, food and agriculture, or chemicals and waste management, UNDP is working with countries to scale and accelerate transformative change by integrating circular and green economy approaches . For example, under UNDP’s Climate Promise, The Gambia, Lao PDR, South Sudan, Uganda and Vanuatu conducted detailed circular economy assessments as part of their NDC revision process to identify and prioritize circular economy interventions for enhancing their climate ambition.

We’re also supporting a wide range of actions including national, urban, and sectoral planning and budgeting, and by convening and engaging key stakeholders and partners at global, regional, and national levels to help build capacities and raise awareness of circular economy and other important nexuses.

How can we accelerate the circular economy transition?

Despite the urgent need to shift to a circular economy, material extraction is rising every year, with circularity declining – from 9.1 percent in 2018 to 7.2 percent in 2023 . This means that we are using more virgin materials and becoming more wasteful.

To start closing the loop, UNDP believes that countries should leverage their national climate pledges – their NDCs – to include circular economy measures. As of May 2023, only 27 percent of NDCs include circular economy, so there is ample room for action.

On this journey, it will be key for governments to engage a broad range of stakeholders across different value chains and at all stages, ensuring that all voices are heard in the process, particularly the most marginalized and vulnerable. This way, we can ensure that the best solutions are prioritized in the NDC, are inclusive of all those affected, and have local ownership to be effectively implemented on the ground.

With the next round of NDC revisions required in 2025, now is the time to define circular economy measures to include in NDCs, helping to accelerate the transition to a more circular and regenerative world.

* All references to Kosovo shall be understood in the context of UN Security Council Resolution 1244 (1999).

Editor's Note: If you found this piece useful, sign up for our monthly climate newsletter to get more explainers and climate news delivered directly to your inbox.

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The circular economy in detail

A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment. In contrast to the ‘take-make-waste’ linear model, a circular economy is regenerative by design and aims to gradually decouple growth from the consumption of finite resources.

What is the economy?

To understand the circular economy we first need to understand what an economy actually is.

In this video, Ken Webster takes us right back to the basics of what an economy is.

The circular economy

An economy that is restorative and regenerative by design.

In a circular economy economic activity builds and rebuilds overall system health. The concept recognises the importance of the economy needing to work effectively at all scales – for big and small businesses, for organisations and individuals, globally and locally.

It is based on three principles:

Eliminate waste and pollution

Circulate products and materials, regenerate nature.

What if waste and pollution were never created in the first place?

A circular economy reveals and designs out the negative impacts of economic activity that cause damage to human health and natural systems. This includes the release of greenhouse gases and hazardous substances, the pollution of air, land, and water, as well as structural waste such as traffic congestion.

For more on this principle,  read this guide .

What if we could build an economy that uses things rather than uses them up?

A circular economy favours activities that preserve value in the form of energy, labour, and materials. This means designing for durability, reuse, remanufacturing, and recycling to keep products, components, and materials circulating in the economy.

Circular systems make effective use of bio-based materials by encouraging many different uses for them as they cycle between the economy and natural systems.

What if we could not only protect, but actively improve the environment?

A circular economy avoids the use of non-renewable resources and preserves or enhances renewable ones, for instance by returning valuable nutrients to the soil to support regeneration, or using renewable energy as opposed to relying on fossil fuels.

Pause for thought

Having just learnt the three principles of the circular economy, how would you describe the principles that underpin the current, linear economy?

At the Ellen MacArthur Foundation we have tried to capture the essence of the circular economy in the diagram above, which is somewhat understandably nicknamed the ‘butterfly diagram’.

The diagram tries to capture the flow of materials, nutrients, components, and products, whilst adding an element of financial value. It builds on several schools of thought, but is perhaps most recognisably influenced by Cradle to Cradle’s two material cycles.

A few definitions:

Maintain/prolong (and share).

This innermost loop of the technical cycle technical cycle The processes that products and materials flow through in order to maintain their highest possible value at all times. Materials suitable for these processes are those that are not consumed during use - such as metals, plastics and wood. shows the strategy of keeping products and materials in use by prolonging their lifespan for as long as possible through designing for durability durability The ability of a product, component or material to remain functional and relevant when used as intended. as well as maintenance and repair repair Operation by which a faulty or broken product or component is returned back to a usable state to fulfil its intended use. . These longer-lasting products can then be shared amongst users who are able to enjoy access to the service they provide, removing the need to create new products.

Reuse/redistribute

Technical products and materials can also be reused multiple times and redistributed to new users in their original form or with little enhancement or change. Marketplaces such as eBay are proof of this already well-established approach.

Refurbish/remanufacture

Remanufacturing and refurbishment are two similar, yet slightly different, processes of restoring value to a product. When a product is remanufactured it is disassembled to the component level and rebuilt (replacing components where necessary) to as-new condition with the same warranty as a new product. Refurbishment is largely a cosmetic process whereby a product is repaired as much as possible, usually without disassembly and the replacement of components.

Recycling is the process of reducing a product all the way back to its basic material level, thereby allowing those materials (or a portion of them at least) to be remade into new products. While this is undoubtedly an important process in a circular economy , the loss of embedded labour and energy, the necessary costs to remake products entirely, and the inevitable material losses mean that it is a lower value process than those closer to the centre of the system diagram, such as reuse reuse The repeated use of a product or component for its intended purpose without significant modification. and remanufacturing.

This loop, within the biological cycle biological cycle The processes - such as composting and anaerobic digestion - that together help to regenerate natural capital. The only materials suitable for these processes are those that can be safely returned to the biosphere. , refers to the process of putting used materials and components into different uses and extracting, over time, stored energy and material order. Along the cascade, this material order declines until the material ultimately needs to be returned to the natural environment as nutrients. A cascade, for example, might be a pair of cotton jeans being turned into furniture stuffing and then into insulation material before being anaerobically digested so that it may be returned to the soil as nutrients.

Biological and technical material flows

Can a material safely re-enter the natural world?

The first thing that most people notice about the butterfly diagram is the separation into two distinct halves, or cycles, which represent two fundamentally distinct flows of material: biological and technical.

Biological materials  – represented in green cycles on the left side of the diagram – are those materials that can safely re-enter the natural world, once they have gone through one or more use cycles, where they will biodegrade over time, returning the embedded nutrients to the environment.

Technical materials  – represented in blue on the right hand side – cannot re-enter the environment. These materials, such as metals, plastics, and synthetic chemicals, must continuously cycle through the system so that their value can be captured and recaptured.

Access versus ownership

Do we consume products or use them?

One particular subtlety of the diagram is the distinction between consumers and users. In a circular economy, biological materials are the only ones that can be thought of as  consumable , while technical materials are  used . It makes no sense to say that we consume our washing machines and cars in the same way that we consume food. This is a subtle, but important distinction in how we view our relationship to materials.

Further to this, it raises questions about the necessity of owning products in the way that we traditionally do. What benefit is there in owning a drill when you just want to put holes in your wall to hang a picture? It is access to the service a product provides that is important, rather than the product itself. Understanding this shift in mindset lays the groundwork to many of the practicalities of shifting our economy from linear to circular.

The economic benefits

What are the macroeconomic impacts of shifting to a new economic model?

The circular economy has been gaining traction with business and government leaders alike. Their imagination is captured by the opportunity to gradually decouple economic growth from virgin resource inputs, encourage innovation, increase growth, and create more robust employment. If we transition to a circular economy, the impact will be felt across society.

Economic benefits in detail

Economic growth.

Economic growth, as defined by GDP, would be achieved mainly through a combination of increased revenues from emerging circular activities, and lower cost of production through the more productive utilisation of inputs. These changes in input and output of economic production activities affect economy-wide supply, demand, and prices. Its effects ripple through all sectors of the economy adding to overall economic growth.

Material cost savings

Based on detailed product-level modelling, it is estimated that, in the sectors of complex medium-lived products (such as mobile phones and washing machines) in the EU, the annual net-material cost savings opportunity amounts to up to USD 630 billion. For fast moving consumer goods (such as household cleaning products), there is a material cost-saving potential of up to USD 700 billion globally.

Job creation potential

The largest comparative  study  to date of the employment impacts of a circular economy transition points to “positive employment effects occurring in the case that the circular economy is implemented”. This impact on employment is largely due to increased spending fuelled by lower prices; high-quality, labour-intensive recycling activities; and higher skilled jobs in remanufacturing. New jobs will be created across industrial sectors, within small and medium enterprises, through increased innovation and entrepreneurship, and a new service-based economy.

The aspiration to replace linear products and systems with circular ones is an enormous creative opportunity. The benefits of a more innovative economy include higher rates of technological development, improved materials, labour, energy efficiency, and more profit opportunities for companies.

Environmental and system-wide benefits

What impact will shifting to a circular economy have on the environment?

The potential benefits of shifting to a circular economy extend beyond the economy and into the natural environment. By designing out waste and pollution, keeping products and materials in use, and regenerating rather than degrading natural systems, the circular economy represents a powerful contribution to achieving global climate targets

Environmental and system benefits in detail

Carbon dioxide emissions.

For Europe, a circular economy development path could halve carbon dioxide emissions by 2030, relative to today’s levels across mobility, food systems, and the built environment. In addition, sector specific analysis indicates that the UK could reduce greenhouse gas emissions by 7.4 million tonnes per annum by keeping organic waste out of landfills.

Primary material consumption

The circular economy could result in a reduction of primary material consumption (i.e. car and construction materials, real estate land, synthetic fertiliser, pesticides, agricultural water use, fuels, and non-renewable electricity) by 32% by 2030.

Land productivity and soil health

Land degradation costs an estimated USD 40 billion annually worldwide, without taking into account the hidden costs of increased fertiliser use, loss of biodiversity, and unique landscapes. Higher land productivity, less waste in the food value chain, and the return of nutrients to the soil will enhance the value of land and soil as assets. Returning biological material back into the soil will reduce the need for replenishment with additional nutrients. Recovering all of the nitrogen, phosphorus, and potassium from food, animal and human waste streams globally could contribute nearly 2.7 times the nutrients contained within the volumes of chemical fertiliser currently used. This is the circular economy principle of regeneration at work.

The opportunity for companies

How will companies benefit from the circular economy?

Businesses would benefit significantly by shifting their operations in line with the principles of the circular economy. These benefits include the creation of new profit opportunities, reduced costs due to lower virgin-material requirements, and stronger relationships with customers. The sliders below expand on these and more benefits.

Opportunity for companies in detail

Profit opportunities.

Businesses could lower costs and create new profit streams. Analysis of complex medium-lived products (e.g. mobile phones) and fast-moving consumer goods (e.g. household cleaning products) shows that the circular economy would support the following improvements:

The cost of remanufacturing mobile phones could be reduced by 50% per device

High-end washing machines could be leased instead of sold – customers would save roughly a third per wash, and manufacturers would earn roughly a third more in profits

Reduced volatility and greater security of supply

The shift to a circular economy means using less virgin material and more recycled inputs, reducing a company’s exposure to ever more volatile raw materials prices and increasing resilience. The threat of supply chains being disrupted by natural disasters or geopolitical imbalances is reduced because decentralised operators provide alternative materials sources.

New demand for business services

A circular economy would create demand for new business services, such as:

Collection and reverse logistics reverse logistics Supply chains dedicated to the reverse flow of products and materials for the purpose of maintenance, repair, reuse, refurbishment, remanufacture, recycling, or regenerating natural systems. companies that support end-of-use products being reintroduced into the system

Product remarketers and sales platforms that facilitate longer use or higher utilisation of products

Parts and component remanufacturing, and product refurbishment offering specialised knowledge and services

Improved customer interaction and loyalty

Circular solutions offer new ways to creatively engage customers. New business models, such as rentals or leasing contracts, establish longer-term relationships, as the number of touch points increases over the lifetime of a product. These business models offer companies the chance to gain unique insights into usage patterns that can lead to a virtuous circle of improved products, better service, and greater customer satisfaction.

The opportunity for individuals

What does the circular economy mean for individuals?

The circular economy will not only benefit businesses, the environment, and the economy at large, but also the individual. Ranging from increased disposable income to improved living conditions and associated health impacts, the benefits for individuals of a system based on the principles of circularity are significant.

The opportunity for individuals in detail

Increased disposable income.

Analysis  shows that a circular economy could increase the disposable income of the average European household. The cost of products and services would be reduced and there would be less unproductive time (e.g. time stuck in traffic). The average disposable income for EU households would increase by EUR 3000 by 2030.

Greater utility

The utility, or benefit, felt by customers may be enhanced by the additional choice or quality that circular models provide. Customer choice increases as producers tailor products or services to better meet customer needs.

Reduced obsolescence

For customers, overcoming premature obsolescence (the untimely failure of products) will significantly bring down total ownership costs and deliver higher convenience as they would avoid hassles associated with repairs and returns.

Shifting to a circular food system could lower the healthcare costs associated with pesticide use by USD 550 billion globally. There would also be significant reductions of antimicrobial (an agent that kills microorganisms or stops their growth) resistance, air pollution, water contamination, and foodborne diseases. It is estimated that a circular economy for food, catalysed by cities, could save 290,000 lives otherwise lost to outdoor air pollution per year, by 2050.

Shifting from linear to circular requires systemic solutions.

There is no simple fix and no stones can be left unturned in the pursuit of system change. Business models, product and service design, legislation, accounting practices, urban planning, farming practices, materials extraction, manufacturing, and more, all currently have undesirable qualities from a circular perspective. Yet, we cannot change just one element of the existing system and expect the change we need.

Systems change is difficult to achieve and great ideas often don’t come to fruition because of failures in managing the complexities involved. What we should do, though, is learn to understand how complex systems – like an economy – operate, because understanding is the first step towards creating better solutions.

Systems thinking

If we do a poor job of designing systems - by, for example, leaving out key elements - we run the risk of being surprised by system failures. The diagram below is a classic example of a poorly-mapped-out system, yet it is widely used in Economics courses. This ‘circulation of money’ diagram misses out environmental factors, unpaid work, and the commons, all of which are crucial areas of our economy. One might say they are hitched to everything else.

We need to be careful that our way of thinking about the circular economy isn’t found equally wanting. Discussions about the circular economy can often be rather narrow: closed loops, product service systems, business models, and other such practical actions. But a more holistic look at the system reveals other necessary elements, such as the science and philosophy that shapes how we think and act, as well as legislation and infrastructural elements.

Instead, all of this could be characterised as a sandwich, where the tasty filling is the part most are happy to focus upon. Without the other elements there is a real risk that the circular economy becomes ‘business as usual’ with a few tweaks here and there.

For an in-depth look at how systems operate, you might want to  check out this great read  by Professor Thomas Homer-Dixon.

The origins of the concept

An idea whose time has come. The notion of circularity has deep historical and philosophical origins. The idea of feedback, of cycles in real-world systems, is ancient and has echoes in various schools of philosophy. It enjoyed a revival in industrialised countries after World War II when the advent of computer-based studies of non-linear systems unambiguously revealed the complex, interrelated, and therefore unpredictable nature of the world we live in – more akin to a metabolism than a machine. With current advances, digital technology has the power to support the transition to a circular economy by radically increasing virtualisation, de-materialisation, transparency, and feedback-driven intelligence.The generic concept has been refined and developed by a number of schools of thought that you can read about below.

Schools of thought

Cradle to cradle.

German chemist Michael Braungart and American architect Bill McDonough, developed the Cradle to Cradle™ concept and certification process. This design philosophy considers all material involved in industrial and commercial processes to be nutrients, of which there are two main categories: technical and biological. The Cradle to Cradle framework focuses on design for effectiveness in terms of producing products with positive impact.

Cradle to Cradle’s three principles

Cradle to Cradle design takes inspiration from natural systems, where there is no concept of waste: everything is a resource for something else. Biological nutrients should be safely returned to the soil, while technical nutrients should be used again and again at high quality.

The second principle is to use clean and renewable energy renewable energy Energy derived from resources that are not depleted on timescales relevant to the economy, i.e. not geological timescales. . The argument goes that natural systems thrive on current solar income and human systems could too. Renewable energy is clean (at the point of use), low-cost to operate, creates no emissions in use, and utilises abundant resources.

Finally, celebrate diversity: diversity builds resilience in natural systems, and can do so in human systems, too. Equally, no two places are the same: a diverse approach is often necessary to overcome the challenges and meet the opportunities offered by different geographies.

The Performance Economy

In his 1976 research report to the European Commission, Walter Stahel, architect and economist, sketched a vision of an economy in loops (or circular economy ),  The Potential for Substituting Manpower for Energy , co-authored with Genevieve Reday. The vision looked at its impact on job creation, economic competitiveness, resource savings, and waste prevention.

Credited with having coined the expression “Cradle to Cradle” in the late 1970s, Stahel worked at developing a ‘closed loop’ approach to production processes and created the Product Life Institute in Geneva more than 25 years ago. It pursues four main goals: product-life extension, long-life goods, reconditioning activities, and waste prevention. It also insists on the importance of selling services rather than products, an idea referred to as the ‘functional service economy’, now more widely absorbed into the notion of ‘performance economy’. Stahel argues that the circular economy should be considered a framework: as a generic notion, the circular economy draws on several more specific approaches that gravitate around a set of basic principles.

Read more about Walter Stahel’s thinking in his book:  The Circular Economy – A User’s Guide.

“Innovation inspired by nature” - Janine Benyus

The idea at the core of  Biomimicry  is that life has already solved most of the problems we are currently grappling with. To give some obvious examples: birds can fly with no need for fossil fuels, barnacles can adhere to underwater surfaces and have a tremendous ability to stay attached, insects outweigh humans yet cause no pollution or waste, leaves soak up sunlight and manage to efficiently and effectively transport water and nutrients through a dense network.

Biomimicry holds that we can find solutions to human challenges by emulating nature’s patterns and strategies.

Janine Benyus, author of  Biomimicry: Innovation Inspired by Nature , defines her approach as “a new discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems”.

Visit the  Biomimicry Institute  to learn more about biomimicry.

Industrial Ecology

The study of material and energy flows through industrial systems.

Focusing on connections between operators within the ‘industrial ecosystem’, this approach aims at creating closed-loop processes in which waste serves as an input, thus eliminating undesirable by-products. Industrial ecology adopts a systemic point of view, designing production processes so they perform as close to living systems as possible. This is achieved by considering local ecological constraints and looking at global impact of processes from the outset.

This framework is sometimes referred to as the ‘science of sustainability’, given its interdisciplinary nature. The principles of industrial ecology can also be applied in the services sector. With an emphasis on natural capital restoration, industrial ecology also focuses on social wellbeing.

Regenerative Design

In the US, John T. Lyle started developing ideas on regenerative design that could be applied to all systems, i.e., beyond agriculture, for which the concept of regeneration had already been formulated.

Arguably, he laid the foundations of the circular economy framework, which developed and gained notoriety thanks to McDonough (who had studied with Lyle), Braungart and Stahel. Today, the  Lyle Center for Regenerative Studies  offers courses on the subject.

Blue Economy

Initiated by former Ecover CEO and Belgian businessman Gunter Pauli, the Blue Economy is an open-source movement bringing together concrete case studies, initially compiled in an eponymous report handed over to the Club of Rome.

As the official manifesto states, "using the resources available in cascading systems, (…) the waste of one product becomes the input to create a new cash flow". Based on 21 founding principles, the Blue Economy insists on solutions being determined by their local environment and physical/ecological characteristics, putting the emphasis on gravity as the primary source of energy. The report, which doubles up as the movement’s manifesto, describes "100 innovations that can create 100 million jobs within the next 10 years", and provides many examples of winning South-South collaborative projects— another original feature of this approach intent on promoting its hands-on focus.

Moving from vision to reality.

Our economy is currently locked into a system which favours the linear model of production and consumption. However, this lock-in is weakening under the pressure of several powerful disruptive trends. We must take advantage of this favourable alignment of economic, technological, and social factors in order to accelerate the transition to a circular economy . Circularity is making inroads into the linear economy linear economy An economy in which finite resources are extracted to make products that are used - generally not to their full potential - and then thrown away ('take-make-waste'). and has moved beyond the proof of concept; the challenge we face now is to mainstream the circular economy , and bring it to scale.

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Funded by Eric and Wendy Schmidt Fund for Strategic Innovation

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• 16 November 2022

Recycling our way to sustainability

• Sarah King 0

Sarah King is a circular economy researcher at Swinburne University of Technology in Melbourne, Australia.

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Evidence of the economic opportunities that a circular economy could bring is mounting. The potential environmental impact is also clear. The move to a circular economy — a system that aims to reduce, reuse and recycle materials — could address 70% of global greenhouse emissions 1 . As the benefits stack up, this transition is becoming a key focus for policymakers around the world. But there remains much confusion about what a circular economy is, and how it might be achieved.

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Nature 611 , S7 (2022)

doi: https://doi.org/10.1038/d41586-022-03646-z

This article is part of Nature Outlook: The circular economy , an editorially independent supplement produced with the financial support of third parties. About this content .

Circle Economy. The Circularity Gap Report 2022 1–64 (2022).

Kirchherr, J., Reike, D. & Hekkert, M. Resour. Conserv. Recycl. 127 , 221–232 (2017).

Article   Google Scholar  

Kadner, S. et al. Circular Economy Roadmap for Germany (Circular Economy Initiative Deutschland, 2021).

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Competing Interests

The author declares no competing interests.

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5 Opportunities of a Circular Economy

• circular economy

More than 100 billion tons of resources enter the economy every year – everything from metals, minerals and fossil fuels to organic materials from plants and animals. Just 8.6% gets recycled and used again. Use of resources has tripled since 1970 and could double again by 2050 if business continues as usual. We would need 1.5 Earths to sustainably support our current resource use.

This rampant consumption has devastating effects for humans, wildlife and the planet. It is more urgent than ever to shift from linear, use-it-up-and-throw-it-away models to a circular economy: where waste and pollution are designed out, products and materials are kept in use for longer, and natural systems can regenerate.

A circular economy isn’t just about fixing environmental wrongs, though: Evidence shows it can bring big opportunities and positive impacts across industries, sectors and lives.

A growing number of businesses, governments and civil society organizations are coming together to drive the change through the Platform for Accelerating the Circular Economy (PACE) . More than 200 experts from 100 organizations helped develop the Circular Economy Action Agenda , a set of publications that analyze the potential impact and call for action across five key sectors: plastics, textiles, electronics, food and capital equipment (machinery and large tools such as medical scanners, agricultural equipment and manufacturing infrastructure). The Action Agenda demonstrates five opportunities associated with the shift to a circular economy:

1) Make better use of finite resources.

The circular economy concept is all about making better use of natural resources like forests, soil, water, air, metals and minerals.

Take the textiles industry. Each year, huge quantities of fossil fuels are used to produce clothes from synthetic fibers each year. Textile production (including cotton farming) uses almost 100 billion cubic meters of water per year, approximately 4% of global freshwater withdrawal. At the same time, people throw away still-wearable clothes worth an estimated $460 billion each year.

Creating a circular economy for textiles means shifting to recycled and recyclable materials in order to reduce the amount of land, water and fossil fuels used to produce new clothes. It means changing consumption patterns to reduce new purchases and keep clothes in use for longer, for instance by developing the second-hand and rental markets as well as changing the culture of fast fashion. Research suggests that the purchase of 100 second-hand garments can displace the production of 85 new garments. And finally, it means ensuring that clothes at the end of their life are collected and recycled or repurposed into new clothes, further reducing resource use.

2) Reduce emissions.

About 45% of global greenhouse gas emissions come from product use and manufacturing, as well as food production. Circular economy strategies that reduce our use of resources can cut global greenhouse gas emissions by 39% (22.8 billion tons) and play a crucial role in averting the dangerous impacts of climate change.

For example, shifting towards recycled materials would alleviate the need to produce virgin plastics and synthetic fibers, which would significantly reduce fossil fuel use and associated emissions. Changing consumption patterns is also crucial: For example, if the average number of times a garment is worn were doubled, greenhouse gas emissions from the textiles industry would be 44% lower .

Creating a circular economy for food by reducing loss and waste is particularly crucial to lowering emissions: If food loss and waste were a country, it would be the third-largest emitter after the United States and China.

3) Protect human health and biodiversity.

Every year, more than 9 million deaths occur due to air, water and soil pollution. This pollution also threatens biodiversity .

Working towards a circular economy helps protect human health and biodiversity in many ways, including by making better use of natural resources (e.g. protecting water and land), and by mitigating the climate crisis. One of the clearest and most direct impacts of the shift to a circular economy will come from how we deal with products at the end of their life.

The world produces around 300 million tons of plastic waste every year, nearly equivalent to the weight of the entire human population. This is on top of 54 million tons of electronic waste (e-waste), of which just 17.4% gets collected and recycled. This waste becomes hazardous for human health and for biodiversity when it is mismanaged, either leaking into the natural environment or disposed of through open burning, landfills or substandard recycling.

Designing products to be kept in use for longer reduces the amount of waste produced. Creating proper collection and processing systems protects workers and the environment from hazardous materials. For instance, utilizing existing solutions like replacing plastic other materials, designing plastics so that they can be more easily recycled, and scaling up collection and recycling could reduce the flow of plastic waste into the ocean by 80% in 20 years – a shift that would be enormously beneficial for human health and biodiversity.

4) Boost economies.

Research shows that the circular economy offers a $4.5 trillion economic opportunity by reducing waste, stimulating innovation and creating employment. New business models focused on reuse, repair, remanufacturing and sharing models offer significant innovation opportunities.

For example, a circular economy for plastics offers considerable economic benefits. Less plastic waste in the ocean would benefit industries like fishing and tourism, as plastic pollution currently leads to $13 billion in costs and economic losses per year. Reducing the pollution and toxic emissions that come from the open burning of plastic waste would lower healthcare costs, while reducing fossil fuel use for plastic production would help mitigate climate change and its associated costs.

Many of these economic benefits and opportunities are long-term, indirect and require significant investment; a long-term view is key, as are short-term incentives to drive the change. This can include policies that create more immediate financial incentives for businesses to develop innovative new business models and enable the efficient flow of reused and recycled materials across global value chains.

5) Create more and better jobs.

Transitioning to a circular economy could create a net increase of 6 million jobs by 2030 . Making the most of this opportunity will require a clear focus on social and environmental justice.

Jobs may be lost in more linear businesses; however new jobs will be created in fields such as recycling, services like repair and rental, or in new enterprises that spring up to make innovative use of secondary materials. These new jobs cannot be considered direct replacements, as they may be in different locations and require different skills. For instance, we must consider the millions of garment workers — mostly women — whose employment depends on the continuation of the fast fashion industry. Investing in a just transition via social dialogue, social protection and reskilling programs is key.

While a net increase in jobs is important, another value-add of circularity is the opportunity to provide formal work and improved working conditions for informal laborers. Around 15 million people worldwide work as “waste pickers,” salvaging reusable or recyclable materials from garbage. Bringing these informal waste pickers into formal work in collection or recycling is a major opportunity to offer safer, more secure employment.

Maximizing the Impact of the Circular Economy

Of course, there are always trade-offs to be considered and managed when working towards large-scale, systemic change. For example, shifting to bio-based plastics and natural, recyclable textiles like cotton will use less fossil fuels than traditional plastics or synthetic fibers, but may increase demands for land and water to grow such materials. Shifting to natural materials is a crucial part of the solution, but only if those materials are produced in a sustainable way — and only if consumption habits change, too.

It’s also important to recognize the interconnected nature of the global economy. Many of the minerals and metals used in electronics are byproducts from the mining of aluminum, copper, lead and zinc, which are used across industries. Going circular in the electronics industry alone would therefore not do much to reduce dependence on these resources. Multiple industries must shift to create systemic change.

Finally, it will be crucial to keep social well-being and equity top-of-mind. For example, moving to a circular economy can shift investment and employment away from production and manufacturing (which tends to happen in lower-income countries) and towards later stages of the value chain, such as repair, resale, sorting and recycling (which are often concentrated in wealthier countries). We’ll need to ensure that economic benefits are equitably distributed to maximize the opportunity of a circular economy.

A Role for Everyone

The above five impact areas exhibit some of the social, environmental, and economic benefits of a circular economy, but realizing these benefits will require ambitious action. Governments, businesses, civil society, finance institutions, research organizations—everyone has a role to play. The new Circular Economy Action Agenda is a good place to start. You can also visit Systems Change Lab to track progress on the world's transition to a circular economy.

Relevant Work

How a partnership in kenya recycled 100,000 kilograms of fashion waste, how to build a circular economy, the apparel industry’s environmental impact in 6 graphics, barriers to a circular economy: 5 reasons the world wastes so much stuff (and why it's not just the consumer's fault), how you can help.

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• Social and human impact

Benefits and challenges of the digital circular economy

Digital tech can potentially help companies follow the circular economy model, but critics point out possible issues as well, including continuing demand for plastics. learn more..

• Guilliean Pacheco, Associate Site Editor

Many companies are looking to technology to address the growing challenges of the global climate crisis.

Some potential options have emerged from the Fourth Industrial Revolution , such as IoT, robotics and AI. But company leaders must understand both the pros and cons of using tech in the name of sustainability before moving forward with implementation.

For example, some companies are increasingly looking to AI for ways to minimize greenhouse gas emissions, such as transportation planning. However, AI is a resource hog, producing large amounts of carbon dioxide, and AI model training creates large amounts of heat, requiring more water to cool the data center.

The circular economy model is also an increasingly popular topic in sustainability discussions. Companies following the circular economy model focus on using resources efficiently as well as minimizing emissions and waste throughout their supply chain.

In Gaia's Web: How Digital Environmentalism Can Combat Climate Change, Restore Biodiversity, Cultivate Empathy and Regenerate the Earth , Professor Karen Bakker, an environmental scientist and tech entrepreneur, explores how using digital technology could potentially support a circular economy model.

Using digital technology for sustainability has its supporters and detractors. Supporters see the potential to eliminate waste and enhance resource efficiency. Detractors raise concerns about the expanded use of hardware and infrastructure like servers and the continuing demand for metals and plastics because of this technology use.

In this excerpt from Chapter 5 of Gaia's Web , Bakker shares insights into the pros and cons of a digital circular economy.

In circular economies, technologists strive to avoid both pollution and extraction of nonrenewable resources from Earth. Technological systems can thus conserve and reuse, but not consume. The only consumption is of renewable resources, between living things; for example, food and biologically based materials (like wool or wood) can be used, but then feed back into ecosystems through processes like excretion and composting -- regenerating living systems like soil, thereby providing renewable resources for the economy. Biological systems can consume and regenerate and are the primary source of growth in a circular economy. In making these arguments, advocates draw on long-standing theories of cyclicality, systems-thinking and metabolism in both living organisms and machines. Contemporary variants of the circular economy argument include ecologist Janine Benyus's concept of biomimicry, architect Walter Stahel's "functional service economy," the "cradle to cradle" design philosophy of architect William McDonough and chemist Michael Braungart, Gunter Pauli's "blue economy" and theories of industrial ecology and natural capitalism.

This collective set of developments is sometimes termed a Fourth Industrial Revolution: a convergent set of biological and digital innovations that will generate a complete makeover of industrial production (and industrial metabolism) through automation, cognitive computing, the Internet of Things and cloud computing-enabled data exchange in manufacturing technologies. Ecomodernists argue that these cyber-physical systems will enable decoupling, supporting continued economic growth as total environmental impacts shrink. Degrowth advocates argue that this is unlikely: even if feasible in principle, decoupling will not happen in the time frame necessary to avoid ecological tipping points, so alternative policy trajectories based on technological deceleration, redistribution, and material-energetic degrowth will be required.

Where do digital technologies fit within circular economies? Some proponents argue that digital technology is vital to a transition to a circular economy by enabling production that is highly resource- efficient, low-emission, low-waste and embedded in eco-industrial networks that are automated, decentralized, flexible, networked and intelligent. Long-lived products with entirely recyclable components would reduce both resource use and waste. This would enhance resource efficiency not only in production but also in supply chains, by radically enhancing transparency through tracking and control of entire value chains. Some proponents also argue that virtualization enabled by digital technologies will also dramatically shift fossil fuel and resource use.

In part, this depends on how these value chains shift geographically in the future; some argue that value chains will shorten and localize, thanks to the emergence of open-source business models in design and manufacturing, linked to networked micro-factories -- "fab labs" and makerspaces equipped with machines (like 3D printers and computer numerical control [CNC] machines) that can generate prototypes and devices from digital software files. This could enable a "design global, manufacture local" trend, reducing the need for global transportation of manufactured goods; easy-to-transmit commodities (knowledge, design ideas) are transmitted globally, while heavy, expensive-to-transport commodities (machinery, building materials) are local and, ideally, shared, reused and recycled. In opposition to the large-scale digital agricultural model discussed above, farmware cooperatives like Farm Hack or L'Atelier Paysan (in France) support small-scale farming by sharing designs for open-source agricultural machines. The WikiHouse project shares designs of dwellings with minimal environmental impacts. RepRap shares open-source designs for 3D printers that self-replicate. Open Bionics produces open-source, low-cost designs for bionic and robotic devices.

Critics point out that the materials requirements of the digital economy have led to increasing volumes of hardware and infrastructure. Computing centers, servers and transmission networks offer one obvious example of where this has been the case. As computing devices proliferate and become ubiquitous (e.g., wearables or smart textiles woven into clothing) these demands will continue to increase. The rapid rate of innovation makes it difficult to predict whether and when this will shift to reusable products and/or renewable inputs, but short-term trends do not seem positive for the environment. Most forecasts suggest increased use of metals, rare earth minerals, plastics and glass; amounts of e-waste are also expected to rise substantially in the next few decades, largely due to growing digitalization of industrial production and consumer goods. Will Digital Earth monitoring add to the tsunami of e-waste already being generated? Whether the digital optimization of industrial value chains can offset these increases remains to be seen.

Within this debate, issues of social justice often tend to be overlooked. The egregious human rights impacts of mining rare earth metals necessary for digital devices to function are, by now, well known. The energy transition from fossil fuels to renewables will create increased demands for minerals, which might create new economic opportunities but will also intensify risks of human and environmental rights, particularly in low-income countries. An estimated 40 million people worldwide are de facto modern slaves by force or by fraud, working in gold mines in Ghana, graphite mines in China, granite quarries in India and logging in the Amazon. As Benjamin Sovacool puts it, the use of forced labor and sometimes child labor in artisanal mines, notably in Africa, amounts to "subterranean slavery" supporting the sustainability transition. This forced labor, mostly in the world's poorest countries, provides a hidden subsidy to users of digital devices. Protests by local communities over the expropriation of land, inadequate compensation, and the health and ecological effects of mining are often met with violence, which in some regions -- particularly in sub-Saharan Africa -- is sometimes state-sponsored. The Digital Earth agenda rests on an often hidden foundation of environmental degradation, human rights abuse and socioeconomic injustice. Western science and industrialized moderns often choose to forget where raw materials come from, a collective amnesia about the dirty side of the cleantech revolution.

Guilliean Pacheco is an associate site editor for TechTarget Editorial's CIO, ERP and Sustainability and ESG sites. Guilliean graduated from the University of San Francisco with an MFA in Writing.

About the author

Karen Bakker was a Guggenheim Fellow, a professor at the University of British Columbia and the Matina S. Horner Distinguished Visiting Professor at the Radcliffe Institute for Advanced Study at Harvard University.

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JSmol Viewer

Mapping circular economy in portuguese smes.

1. Introduction

2. research methodology, 3. preparing the interviews, 3.1. refining the process, 3.2. sample constitution and characterization, 4. interview results, 4.1. quantitative analysis, 4.2. qualitative analysis of the results.

• SME customers
• P 1.1—Customers might not value products and services that offer circularity
• P 1.2—Customers could penalize companies that are careless with CE issues
• P 1.3—Communication and marketing of CE Practices adopted is not efficient
• P 1.4—Measurement of the impact of CE practices is not effective
• SME employees
• P 2—The majority of workers might not value the CE practices implemented in the companies where they work
• SME top managers
• P 3.1—Legislation on CE could be inefficient
• P 3.2—There might be an imbalance between costs and benefits
• P 3.3—It could be difficult to quantify the impact of CE practices

5. Conclusions

5.1. limitations, 5.2. theoretical and practical implications, author contributions, institutional review board statement, informed consent statement, data availability statement, conflicts of interest, appendix a. list of companies interviewed.

Appendix B. Spearman Correlations

Appendix C. Semi-Structured Interview Guide

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Carreira, R.J.; Ferreira, J.V.; Ramos, A.L. Mapping Circular Economy in Portuguese SMEs. Sustainability 2024 , 16 , 7009. https://doi.org/10.3390/su16167009

Carreira RJ, Ferreira JV, Ramos AL. Mapping Circular Economy in Portuguese SMEs. Sustainability . 2024; 16(16):7009. https://doi.org/10.3390/su16167009

Carreira, Rui Jorge, José Vasconcelos Ferreira, and Ana Luísa Ramos. 2024. "Mapping Circular Economy in Portuguese SMEs" Sustainability 16, no. 16: 7009. https://doi.org/10.3390/su16167009

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Assessment of Carbon Footprint from Household Solid Waste in Tamil Nadu, India: Pathways for Achieving Low-Carbon Economy

• Original Paper
• Published: 16 August 2024

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• A. Premkumar   ORCID: orcid.org/0000-0002-9563-5337 1  

Solid waste generation rates in the low and the middle-income countries reflect their level of socio-economic development, urbanization and industrialization. India is the world's third-largest contributor to anthropogenic greenhouse gas (GHG) emissions and it emits 2060 MtCO 2 e. The present study attempted to examine the carbon footprint from household solid waste generated in Tirupattur district of Tamil Nadu, India. The data on waste generated by sample households which were collected through household survey from 534 households in Tirupattur and it was converted into a single metric KgCO 2 equivalent by equating with the consumption values obtained. The study estimated the carbon footprint from household solid waste, finding that most households emit less than 10 kg of CO 2 equivalent weekly, with biodegradable waste being the major contributor. To mitigate these emissions, policies should promote composting and anaerobic digestion for biodegradable waste, along with robust recycling programs for non-biodegradable waste particularly plastics. Furthermore, public awareness, education and economic incentives are crucial for encouraging sustainable practices. International collaboration under frameworks like Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) is essential for technology transfer and financial support from developed to developing nations. India’s initiatives, including the “Panchamrit” policy goals and “Lifestyle for Environment” (LIFE) are the strategies that can be adapted globally by tailoring waste management to local conditions, promoting successful technologies, and engaging communities. International collaborations and robust monitoring frameworks will facilitate continuous improvement in waste management and carbon footprint reduction efforts.

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Other important urbanised states are: Kerala with 47.7 percent and Maharashtra with 45.2 percent of urbanized population.

Other districts such as Kanyakumari, Theni, The Nilgiris, Cuddalore, Thanjavur and Nagapattinam were identified as most sustainable districts in Tamil Nadu.

Abbreviations

• Carbon Footprint

Carbon Dioxide

Carbon Dioxide Equivalent

Global Warming Potential

Municipal Solid Waste

Solid Waste Management

Ministry of Housing and Urban Affairs

Million Tonnes

Intergovernmental Panel on Climate Change

Greenhouse Gas

Tonnes Per Day

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Premkumar, A. Assessment of Carbon Footprint from Household Solid Waste in Tamil Nadu, India: Pathways for Achieving Low-Carbon Economy. Circ.Econ.Sust. (2024). https://doi.org/10.1007/s43615-024-00411-4

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DOI : https://doi.org/10.1007/s43615-024-00411-4

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