Can the Circular Economy Offer a Sustainable Market Solution?
When we think of the way that goods are produced in modern-day economies, a few images come to mind. To produce a good, we need raw materials. These come from places such as copper mines, oil fields, lumber yards, and the like. From there, materials are processed in manufacturing facilities, where they can be made into countless goods—from cars and planes to medical devices and kitchen appliances. Even after consumption, however, the lifecycle of these materials does not end. Historically, materials have been created with the intent of one day being disposed of and filling up landfills. This is called a linear economy.
A linear economy is an economic model that closely describes the production timeline, usually under capitalist systems where the goal is to manufacture as cheaply as possible for the greatest overall profit. The system is summed up by economists as “take-make-dispose.” The goal of most of these systems is for the goods to ultimately be disposed of. Thus, the products are designed as such (see our coverage of the fast fashion industry). Under this system, we can easily see how unsustainable this can become. Since materials from disposed-of goods are never recovered, this model requires new material to be used at each stage of production.
Due to the massive waste linear models cause, economists and environmentalists have introduced something novel: the circular economy. Think of the symbolism at most recycling disposal sites, the one where arrows feed into one another, forming a loop. Recycling is preceded by the call for reducing and reusing as much as possible before recycling; this idea is expanded within a circular economy to fit a large economic model. Instead of goods being disposed of and ending there, the model asks to analyze whether goods can be reused, redistributed, or otherwise utilized for materials that can then be converted into other goods. In this way, the model uses less raw material, produces fewer emissions by creating fewer goods, and promotes sustainability across an economic system.
The circular economy is particularly present in the European Union, with the European Commission adopting a platform in March 2020 to commit to converting its economic systems to sustainable, circular models. Their goal is to not only bring circularity and sustainability to their economic model but to make it more profitable and enticing for businesses and individuals to play into the system and encourage its uptake. You can read their action plan here.
The circular economy seems like an obvious solution that countries and companies should adopt in order to promote sustainability and reduce the impact of the changing climate. However, as always with environmental initiatives, enforcement is a key challenge to committing entities to the cause. Scholars have also argued that it offers a simplistic view of a complicated manufacturing process and that many more factors are at play than the model allows for. Additionally, the model challenges the goal of most businesses, which is to turn a profit. If customers are consuming less (due to higher quality, longer-lasting goods), and companies are accepting materials and goods back for recycling, their profit potential often decreases, leading to a lack of interest in pursuing circular strategies.
Despite these challenges, the circular economic model offers a solution to a massive problem and can reduce waste in the production system. Already in the European Union, industries like textiles, construction, oil and gas, and rare metal mining have found solutions that make them more sustainable via the circular economic model. It is incumbent on individual industries and governments to find ways to circularize all aspects of the production line to minimize the effects of climate change globally.
