Each year the world produces an extravagant amount of material waste. In 2017, there was 141,200 tons of textiles and leather waste; 763,400 tons of plastic waste; and 676,800 tons of food waste, according to the National Environment Agency. Only 6% of the textile and leather waste, 6% of the plastic waste, and 16% of the food waste was recycled. The numbers are staggering.
What is a circular economy?
In our traditional linear economy, we make, use, and dispose of products. This means we’re continuously generating waste. Although recycling is a step in the right direction, more drastic change is necessary. We need to shift to continuous product life-cycles which can be done through the principles of a circular economy.
As an alternative to the dominant linear economy, a circular economy follows a closed cycle of make, use, repair, refurbish, and recycle. This method emphasizes the use of long-lasting, durable materials so that users get the most out of a product. Then, at the end of the product’s service, it can be renewed and used to create a new product.
The idea of a circular economy is underpinned by the transition to renewable energy resources. With an increase in demand of consumer goods, it is becoming more challenging to maintain reliable sources for raw materials. This scarcity of resources makes the transition from a linear economy to a circular economy necessary. We want to use renewable energies to power the restorative system which will help us minimize negative externalities such as CO2 emissions.
Linear economies are expensive
There is an immense amount of money to be saved if we eliminate wasteful resource use. Extensive research, including interviews and economic modeling, was performed by McKinsey & Company in partner with the Ellen MacArthur Foundation to analyze three human necessities that account for 60 percent of European household spending and 80 percent of resource use: mobility, food, and housing (built environment). The McKinsey report, “Growth Within: A Circular Economy Vision For A Competitive Europe,” details the average European waste and explains that “In value terms, Europe lost 95 percent of the material and energy value, while material recycling and waste-based energy recovery captured only 5 percent of the original raw material value.”
Further, the report provides examples of everyday occurrences that quickly rack up the tons of waste in the three categories mentioned prior such as a parked car, food disposal along the production chain, and the unused space of offices even during work hours. In total, these three sectors costs Europe 7.2 trillion euros each year. Of this amount, 2 trillion euros are spent on externalities such as traffic congestion, CO2, pollution, noise, etc.
The European Union started making the transition to a circular economy a priority in 2016 with their Circular Economy Action Plan. Though their goals may be ambitious, according to the EU Action Plan, they believe these measures will “help stimulate Europe’s transition towards a circular economy, boost global competitiveness, foster sustainable economic growth and generate new jobs.”
According to the McKinsey & Company study, by 2030, Europe could boost its resource productivity by three percent saving 600 billion euros a year and 1.8 trillion euros in other economic benefits with the circular economy approach.
But, as stated by the Ellen MacArthur Foundation — a leader in inspiring the creation of a positive future circular economy — this can’t be done without the support of “policy makers, educational institutions and popular opinion leaders.” Enabling circularity requires collaboration, incentives, money, policy on environmental regulations, and people and companies willing to lead by example.
Policy needs to change
On their journey to “close the loop,” the EU hopes to set goals for waste reduction through revised legislation. Three of these goals include recycling 65% of city waste, recycling 75% of packaging waste, and reducing landfill to a maximum of 10% of city waste, all by 2030.
Looking long-term, the EU wants to implement strategies to transition to an all-encompassing circular economy, one of the key elements being to “re-use and stimulate industrial symbiosis–turning one industry’s by-product into another industry’s raw material.”
As stated in the McKinsey report, the transition to a circular economy would have considerable costs for research and development, asset investments, subsidy payments to promote new products, and expenses for digital infrastructure. The EU wishes to provide “economic incentives for producers to put greener products on the market and support recovery and recycling schemes (e.g. for packaging, batteries, electric and electronic equipments, vehicles).” All of which would be worth it.
Reshaping by re-educating
With consumption of goods moving at the rate it is, we need to make the shift to a regenerative system that is sustainable, and we need to start now. How can we redesign services and products to reshape the linear economy into a circular one?
Companies need to start asking the question: What do you do with a product once a consumer is done with it? Answers require a process centered around design-thinking and purpose-driven design.
Spearheaded by IDEO, a leading global design and innovation company, and the Ellen MacArthur Foundation, “The Circular Design Guide” has made it easier for companies to start using circular strategies with workshops, worksheets, and videos. It’s going to take time and an open mind to rethink traditional approaches to business and products.
Leading by example
There are quite a few companies already re-thinking and re-designing their products and business with circular design principles in mind. Patagonia is often mentioned as a leader amongst socially- and environmentally-responsible companies, and there is no doubt we can point to them again for leading by example. The company recognizes and voices their clothing production’s environmental impact. They encourage conscious consumption and promote a regenerative system with their trade-in program.
In hopes of reducing environmental damage, Patagonia offers the WORN WEAR trade-in program that washes any clothing items traded in and resells them for a discounted price. In addition, they provide repair services as they want to make high-quality gear that will last for years and can also be fixed. This is a wonderful example of circularity.
Food is another industry that could benefit from adopting circular thinking: recall the 676,800 tons of food waste produced in 2017 with only 16% of it being recycled. Chicago’s The Plant, a non-profit collaborative community of food businesses, aims to cultivate local circular economies.
In 2015, a study estimated that each month the businesses in The Plant produce around “18,000 kg of materials, 40% of which were finished products and 60% byproducts.” This majority byproducts is often the case with food production. For example, when we process fruits and vegetables, we remove leaves, pits, peels, seeds, etc. We also dispose of the spoiled ones and often the ones that just don’t look pretty. With these results, The Plant is hoping to develop a system that allows them to “repurpose and capture more value from byproducts.”
The Plant envisions a future where “the shift in production, consumption and waste is driven at the local level, generating equity and economic opportunity for all residents.” The organization provides people and businesses with tools to reevaluate their waste through classes, workshops, and other educational programs that explore the benefits of a circular economy.
Another application of circular design is the implementation of renting models in traditional ownership areas such as electronics, clothing, and furniture. Take children’s clothing, for example. In their early years, kids outgrow their clothes so fast it seems like we’re buying clothes every other day. In Copenhagen, Vigga Svensson started a company that offers a service to rent baby clothes with the goal of reducing waste of various resources and saving money. Her company VIGGA has won awards for its business model for circularity in the textile industry.
We have the tools, let’s use them
With the ever-advancing technologies surrounding us, we have the tools to transition to a circular economy. If the EU were to implement “electric, shared, and autonomous vehicles, food waste reduction, regenerative and healthy food chains, passive houses, urban planning, and renewable energy,” they could reduce CO2 emissions considerably across mobility, food, and housing sectors. Since Europe and the United States have similarities in their economies, it is easy to see how changes would have the same effects in the U.S.
In the past year, Ellen MacArthur Foundation announced its creation of a U.S. chapter for Circular Economy 100 (CE100) program which “brings together leading organisations with the objective of innovating, developing and implementing circular economy opportunities.” This group provides a platform to address the transition to a circular economy with the specifics of the U.S. market in mind. Companies such as Apple, The Coca Cola Company, Google, Nike, and Walmart have joined the group along with other big names.
There are endless opportunities to grow businesses and economies with a circular approach. But, we need more designers, small businesses, large companies, and communities to gather around and circle up to discuss how together we can complete the loop so that the after use of a product is no longer an afterthought.
For more information about the Ellen MacArthur Foundation, European Union’s Action Plan, the McKinsey Report “Growth Within: A Circular Economy Vision For A Competitive Europe,” or “The Circular Design Guide,” visit the links below: