Introduction to the Circular Economy

Key takeaways:

  • In a Linear Economy, materials are extracted, used and disposed of, risking the exhaustion of limited materials, the constant growth of landfills, the waste of energy and damage to ecosystems

  • In a Circular Economy, products, components, and materials remain as long as possible in the loop, minimising the use of virgin material and waste generation

Linear Economy

The Linear Economy follows the take > make > use > dispose flow. There is a linear flow from resource extraction to disposal of products. Consequently, available resources diminish, and waste grows. The disadvantages of a linear economy are:

  1. Continues extraction of limited resources will lead to unavailability of these resources

  2. Resource extraction that exceeds the regeneration rate of this resource reduces the stock thereof

  3. Energy used to process materials and create products is lost

  4. Landfills require ever-growing space and pose a risk to the health of humans and ecosystems

  5. In cases where access to specific resources is very limited, the risk of unavailable or expensive supply is rising

Circular Economy

The core idea of the circular economy is that resources circulate within the economy. They never become waste. They keep their value. The linear flow from the linear economy is transformed into a loop within a circular economy.

The benefits of the circular economy are:

  1. Reduced resource extraction and environmental impact

  2. Lower adverse impact by ever-growing landfills

  3. Energy used to keep materials in the loop could be lower than energy used to extract new virgin materials (not automatically, though)

  4. Locally, higher independence from supply chain shortages

Within a circular economy, biological and technical cycles are treated differently.

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Biological Cycle

Renewable resources like wood or grain are part of the biological sphere and can biodegrade safely. Core products from agriculture and forestry usually stem from the biological cycle and are consumed. However, more and more innovation is happening to replace technical materials with biological ones.

The two essential characteristics of the biological cycle are:

  1. Resources can regenerate

  2. Resources biodegrade safely

Intensity and frequency are essential for the biological cycle. Regeneration happens at a natural speed. If harvesting and collection happen faster, the feedstock is reduced, and unintended consequences on biosystems are likely to occur.

Further Resources:

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Technical Cycle

Resources that are finite or only emerge over long periods circulate in the technical cycle. Products based on metals and oil are usually part of the technical cycle. Given their lack of biological degregation, they can typically be used instead of consumed.

The essential characteristic of the technical cycle is:

  1. Resources are finite or quasi-finite

Naturally, only a limited amount of finite materials can be mined. Therefore, monitoring the available capacity of these resources is necessary. Moreover, products made of finite materials usually don’t biodegrade. Sometimes, they can even harm the environment. It is, therefore, paramount to keep them in the loop and manage this stock consciously.

Further Resources:

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Energy Supply

Energy is mostly needed to mine, harvest, process, and transport resources. This energy can come from fossil or renewable sources.

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Water Supply

Water is generally necessary to clean and process resources. Because water is of superior importance for life on Earth, it is regarded separately from other resources.

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