The circular economy model moves outside of the concerns of single organisation to look at wider social applications of eco-efficiency ideas. It minimise the use of natural materials and maximise recycling and reuse. Does your organisation makes a useful contribution?
Definition
The most obvious applications of this model arena manufacturing sectors.
A circular economy is based on principles of designing out waste and pollution and regenerating natural systems.
Today, we turn resources into an extraordinary number of products. Many of us have access to products from all over the world at affordable prices. But the current system does not longer works for businesses, people and the environment. We throw away products and resources and produce a lot of waste. This has to change.
We need to understand how we manage the resources, how we use products and what we do with them after the use.
The waste and pollution are largely a result of the way we design things. 80% of the environmental impact is determined during the design process. Therefore, by changing the mindset during the design process can create this positive change. We can design products and components so they can be reused, repaired and remanufactured.
In nature, there is no concept of waste and everything is food for something else.
According to Ellen Macarthur Foundation the new systems could bring USD 550 billion reduction in healthcare costs, $3,000 increase in disposable income per annum for EU households, CNY 70 trillion savings for businesses and households in China by 2040 and USD 700 million annual material costs savings in the fast moving consumer goods industry.
The system is designed to benefit businesses, society and the environment.
The original definition of economy asks us three fundamental questions:
1) What to produce?
2) How to produce it?
3) Who gets the benefits?
Every economy has flows of materials, energy and money.
Generally we have two sectors within the economy: firms and households (capital and labour). Money flows between those two: wages are paid, goods are produced and income comes back to the flow. It's very much a pipework with governments taking taxies and banks ensuring savings are safe putting back to economy.
If the economy runs efficiently we are heading to a better world.
The circular economy is the economy that is restorative and regenerative by design. For every type of organisation it focuses on three principles: designing out waste and pollution, keep products and materials in use and regenerate natural system.
The idea
The design and technical circle of this strategy keeps products and materials in use by prolonging their lifespan through the design, maintenance and repair. Do we need to create new products if these can be reused and shared by others? Markets like e-Bay have already proved it is possible. Also, remanufacturing processes have become more and more popular these days. the product is disassembled to each component level and rebuilt gain in new condition. Recycling also allows used products to be remade to new ones. This drastically reduce the amount of new materials and labour, therefore automatically becomes more efficient. The idea is to put the used materials and items back into circle of different uses.
Biologica materials are those which can safely re-enter the natural world. Once it is used and biodegradable it returns nutrients to the world. Like a leaf falling down the tree, general's nutrients to the soil. Technical materials on the other side cannot re-enter the environment. Metals, chemicals, plastics, synthetics should be continuously moving through the circle. This is the only way for value to be generated.
Benefits
The circular economy is gaining more and more support among the governments and businesses. This is because encourage innovation, increase growth and create more robust employment. Increased GDP would be achieved through increased revenues and better utilisation of processes, materials and people. The increased spending fuelled by reduced prices will create wealthier population and higher skilled jobs involved in remanufacturing.
The substantial positive impact on the environment cannot be stressed enough. Having the system in place with allow to meet global climate targets. Sector specific analysis indicates that UK could reduce greenhouses gas emissions by 7.4 million tonnes per annum.
Businesses would also largely benefit from these principles. These include creating new profit opportunities, reducing costs and improved relationships with their customers.
Circular economy would also increase the need for services such as collection and reverse logistics companies, product remarkers and parts remanufacturing services offering specialised skills and knowledge.
The circular economy will also benefit individuals. Increased income, improved health conditions and waste savings to name the few.
This system change is not a simple one. It can not be a quick fix based on bare minimum. We cannot change one thing in the system and expect substantial results. We should therefore, learn to understand this complex principles and now is the real time to do it.
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