The circular economy: how it can lead us on a path to real change

We live in a linear “take, make, waste” economy where natural resources are extracted from the ground, products are made and then disposed in landfill, incinerated or left to leak into nature.

It also assumes a constant supply of natural resources to make the products we consume and externalises the pollution caused from the manufacturing, use and disposal of those products.

In addition, this approach demands never-ending growth for its survival, something unseen in the natural world. This model has been the main driver of global warming, creating an existential crisis for humankind.

In recent years the promising notion of a ‘circular economy’ has emerged to address this crisis. A Circular Economy Action Plan has been adopted by the EU, for example, which encompasses reimagined product design, reverse logistics and waste management.

New leadership roles in some of the world’s largest companies include 'circular economy' in the title, for example Veolia’s Head of Circular Economy. Meanwhile circular economy conferences abound, including the UN’s World Circular Economy Forum and non-profits such as the United Kingdom’s Ellen MacArthur Foundation, which have a singular focus on promoting the circular economy, are growing rapidly.

The concept, however, is far from clearly defined or understood. A review of existing literature by Julian Kirchherr, Denise Reike and Marko Hekkert found 114 definitions – from the common ‘3Rs’ (reduce, reuse, recycle) to ‘9Rs’ (refuse, rethink, reduce, reuse, repair, refurbish, remanufacture, repurpose, recycle, recover) as outlined below.

The 9Rs framework places circular interventions on a scale from linear to circular. Recycling is placed at the linear end of this spectrum given it is an end of life only solution. Indeed, the vast majority of circular economy activities around the world today centre around recycling.

The Alliance to End Plastic Waste is a $1.5 billion fund that supports recycling technologies in developing countries. Proctor & Gamble’s $10 billion baby diaper brand Pampers is piloting diaper recycling in Italy, which sees used items turned into plastic bottle-tops and viscose clothing.

As an activity, it puts the focus on the consumer and governments to manage the waste generated by producers. As a circular strategy it is therefore the easiest possible approach for producers to champion, as there is no product redesign required and little to implement.

This approach is also minimally impactful given the limited value that processors can create from many of the things we recycle. In a sense, recycling is delayed, expensive landfilling that demands the community do weekly source separation for not a great deal of benefit.

And there is no guarantee recycling actually works. An investigative report by Reuters seriously questioned the efficacy of the process.

In addition, over the past 70 years a clear pattern has emerged of large polluters supporting efforts that look helpful in one respect, but are actually little more than distractions to real systems change.

The risk is that recycling as one relatively linear approach to a circular economy becomes the default. In effect, the circular economy becomes “recycling” rebadged, threatening the very exciting prospects that a fully formed, broadly defined circular economy can offer a planet in crisis.

It is a very real risk given the sheer size of the organizations and government support that recycling is gaining under the guise of being part of the circular economy.

A true circular economy is an approach that requires systems change to deliver a waste-free world; one that is inherently more complex than recycling, requires collaboration with unlikely partners and takes time to implement.

Examples include sharing economy companies such as ZipCar and GoGet, which have transformed the 100-year-old vehicle ownership model into a highly effective vehicle sharing model.

Subscribers access a vehicle only when needed and pay an hourly rate. Fuel is paid for by the providers. Users achieve significant savings by avoiding the upfront purchase price of a car and the on-going costs to insure and maintain the vehicle.

Costly depreciation is also avoided when the car is sold. Given that a car purchase is on average, the second largest purchase made by an individual and that the asset sits unused 95% of the time, car sharing offers a far more efficient use of resources. It also takes excess cars off the road.

Fully-fledged product redesigns that allow for regeneration after the products' first life are also beginning to make their way into the market. This trend will accelerate as the price of compostable materials starts to fall, as was the case with battery technology.

UpLink, the World Economic Forum’s early-stage innovation initiative, is enabling and accelerating the purpose-driven entrepreneurs that are essential for a net-zero, nature-positive, and equitable future. To find out more and join the UpLink community, click here.