Circular Economy

What is a circular economy?

Our society currently works based on an old "extract-produce-sell-use-waste" industrial model, creating a "linear economy". It is at the base of capitalism, which aims for a gradual economic growth indefinitely.

Opposed to the linear economy is the circular economy, which aims to redefine growth, focusing on positive society-wide benefits. It entails gradually eliminating the extraction of raw materials and instead linking the source of manufacture to the waste of a previous process or company, slowly designing the extraction of new materials and the process of wasting out of the system. It also aims to use renewable energy sources. The circular model builds both economic value, and social and natural capital.


It is based on three principles:

1) Design out waste and pollution
2) Keep products and materials in use
3) Regenerate natural systems

We need to re-design the way our economy works, if we want to live in a clean, sustainable society,

by designing products that can be 'manufactured for reuse', and powered by renewable energy.

The concept of a circular economy

In a circular economy, all parts of a process are given equal importance. Transitioning to a circular economy means there must be a systemic shift that builds long-term resilience, generates business and economic opportunities, and provides environmental and societal benefits. The negative effects of the linear economy must be eliminated, while at the same time we need to build a new system on top.

Technical and biological cycles

There are two cycles: technical and biological cycles.

Biological cycles are the only process where consumption happens, where food and biologically-based materials (such as cotton or wood) are designed to feed back into the system through processes like composting and anaerobic digestion. These cycles regenerate living systems, such as soil, which provide renewable resources for the economy.

Technical cycles recover and restore products, components, and materials through strategies like reuse, repair, remanufacture or (only as a last resort) recycling.

Origins of the circular economy concept

The idea of feedback systems and cycles 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 have revealed the complex, interrelated and unpredictable nature of the world we live in. 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. (according to Ellen Macarthur Foundation)

Circular economy schools of thought

The circular economy model synthesises several major schools of thought.

They include: the functional service economy (performance economy) of Walter Stahel; the Cradle to Cradle design philosophy of William McDonough and Michael Braungart; biomimicry as articulated by Janine Benyus; the industrial ecology of Reid Lifset and Thomas Graedel; natural capitalism by Amory and Hunter Lovins and Paul Hawken; and the blue economy systems approach described by Gunter Pauli.

For more detailed information, please check the Ellen Macarthur Foundation's website here:

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