What is the Circular Economy?
Resource: Ellen MacArthur Foundation
The concept of a circular economy
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 large and small businesses, for organisations and individuals, globally and locally.
Transitioning to a circular economy does not only amount to adjustments aimed at reducing the negative impacts of the linear economy. Rather, it represents a systemic shift that builds long-term resilience, generates business and economic opportunities, and provides environmental and societal benefits.
The model distinguishes between technical and biological cycles. Consumption happens only in biological cycles, 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 (in the last resort) recycling.
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 ter 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.
The New Plastics Economy: Rethinking the future of plastics & Catalysing action Lightweight, versatile, and low cost, plastics are the dominant materials of our modern economy. Their production is expected to double over the next two decades. Yet only 14% of all plastic packaging is collected for recycling and around 30% escapes into the environment. This not only results in a loss of USD 80 to 120 billion per year to the economy, but if the current trend continues, there could be more plastic than fish (by weight) in the ocean by 2050. This report combines the main insights from the two previously published reports by the Ellen MacArthur Foundation with the support of the World Economic Forum: The New Plastics Economy – Rethinking the Future of Plastics, in 2016; and The New Plastics Economy – Catalysing Action, in 2017. The 2016 report provides a new way of thinking about plastics as an effective global material flow, aligned with the principles of the circular economy. The 2017 report offers a clear action plan for the global plastics industry to design better packaging, increase recycling rates, and introduce new models for making better use of packaging.
Plastics are fundamental to industry and everyday life. Yet, they are one of the most wasteful examples of our existing linear, take-make-dispose economy. Catalysing change in this global material flow will not only create a more effective plastics system, but will also demonstrate the potential for a wider shift from a linear to a circular economy.