Made to Be Made Again - Teachers Guide to Circular Economy

A circular economy is a systemic arroyo to economic evolution designed to benefit businesses, gild, and the environment. In contrast to the 'have-make-waste' linear model, a round economy is regenerative by pattern and aims to gradually decouple growth from the consumption of finite resources. After defining what an economy really is, this learning path explores the nuances of the concept of a circular economy, including the difference betwixt biological and technical materials, the dissimilar opportunities that be to continue materials and products in use, and the history of the idea. Finally, the benefits of shifting from a linear to a circular economy are highlighted.

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The circular economy

An economy that is restorative and regenerative past design.

In a round economy economic activity builds and rebuilds overall system wellness. The concept recognises the importance of the economy needing to work finer at all scales – for big and small businesses, for organisations and individuals, globally and locally.

Information technology is based on three principles:

• Pattern out waste and pollution
• Keep products and materials in use
• Regenerate natural systems

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Design out waste and pollution

What if waste and pollution were never created in the first place?

A round economic system reveals and designs out the negative impacts of economical activity that cause damage to man wellness and natural systems. This includes the release of greenhouse gases and chancy substances, the pollution of air, land, and water, likewise as structural waste such every bit traffic congestion.

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Keep products and materials in use

What if we could build an economic system that uses things rather than uses them upwards?

A circular economy favours activities that preserve value in the class of energy, labour, and materials. This means designing for durability, reuse, remanufacturing, and recycling to keep products, components, and materials circulating in the economy. Circular systems make effective use of bio-based materials past encouraging many different uses for them as they cycle betwixt the economy and natural systems.

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Regenerate natural systems

What if we could not but protect, but actively improve the environment?

A circular economy avoids the utilise of non-renewable resources and preserves or enhances renewable ones, for instance by returning valuable nutrients to the soil to support regeneration, or using renewable energy every bit opposed to relying on fossil fuels.

Pause for thought

Having just learnt the 3 principles of the circular economic system, how would y'all describe the principles that underpin the current, linear economy?

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The round economy organisation diagram

At the Ellen MacArthur Foundation we accept tried to capture the essence of the circular economy in the diagram above, which is somewhat understandably nicknamed the 'butterfly diagram'.

The diagram tries to capture the menstruum of materials, nutrients, components, and products, whilst adding an element of financial value. It builds on several schools of thought, but is perhaps most recognisably influenced by Cradle to Cradle'due south two textile cycles.

Maintain/prolong (& share)

This innermost loop of the technical cycle shows the strategy of keeping products and materials in use past prolonging their lifespan for as long as possible through designing for durability as well as maintenance and repair. These longer-lasting products can then exist shared amid users who are able to enjoy access to the service they provide, removing the demand to create new products.

Reuse/redistribute

Technical products and materials can also exist reused multiple times and redistributed to new users in their original course or with little enhancement or alter. Marketplaces such as eBay are proof of this already well-established arroyo.

Refurbish/remanufacture

Remanufacturing and refurbishment are two similar, all the same slightly different, processes of restoring value to a production. When a production is remanufactured it is disassembled to the component level and rebuilt (replacing components where necessary) to as-new condition with the same warranty as a new product. Refurbishment is largely a corrective process whereby a product is repaired as much as possible, usually without disassembly and the replacement of components.

Recycle

Recycling is the process of reducing a product all the mode back to its basic cloth level, thereby allowing those materials (or a portion of them at to the lowest degree) to be remade into new products. While this is undoubtedly an of import process in a round economy, the loss of embedded labour and free energy, the necessary costs to remake products entirely, and the inevitable textile losses mean that it is a lower value process than those closer to the centre of the arrangement diagram, such every bit reuse and remanufacturing.

Cascades

This loop, within the biological wheel, refers to the process of putting used materials and components into different uses and extracting, over time, stored energy and material club. Forth the pour, this cloth order declines until the material ultimately needs to be returned to the natural environment as nutrients. A cascade, for case, might be a pair of cotton jeans being turned into furniture stuffing and so into insulation material before being anaerobically digested so that it may be returned to the soil as nutrients.

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Biological and technical material flows

Can a material safely re-enter the natural globe?

The first thing that about people notice virtually the diagram is the separation into ii distinct halves, or cycles, which represent two fundamentally distinct flows of material: biological and technical.

Biological materials - represented in green cycles on the left side of the diagram - are those materials that can safely re-enter the natural world, once they accept gone through one or more than use cycles, where they volition biodegrade over time, returning the embedded nutrients to the environment.

Technical materials - represented in blue on the right manus side - cannot re-enter the environment. These materials, such as metals, plastics, and constructed chemicals, must continuously bike through the arrangement and so that their value can be captured and recaptured.

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Access versus ownership

Practice nosotros consume products or apply them?

One particular subtlety of the diagram is the distinction between consumers and users. In a circular economy, biological materials are the only ones that can be thought of as consumable, while technical materials are used. It makes no sense to say that nosotros swallow our washing machines and cars in the same way that we consume food. This is a subtle, but important stardom in how we view our relationship to materials.

Further to this, information technology raises questions well-nigh the necessity of owning products in the way that nosotros traditionally practise. What benefit is in that location in owning a drill when you just want to put holes in your wall to hang a picture? It is access to the service a product provides that is important, rather than the product itself. Agreement this shift in mindset lays the groundwork to many of the practicalities of shifting our economy from linear to round.

Suspension For Idea

Where on the butterfly diagram would yous place:

• a mobile telephone repair service?
• a car-sharing scheme?
• plastic bottle recycling?
• regenerative agriculture?

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The economic benefits

What are the macroeconomic impacts of shifting to a new economic model?

The circular economy has been gaining traction with business and government leaders alike. Their imagination is captured by the opportunity to gradually decouple economical growth from virgin resources inputs, encourage innovation, increase growth, and create more than robust employment. If nosotros transition to a circular economy, the touch will be felt across society. The slider below illustrates some of the potential macroeconomic benefits of shifting to a circular economy.

Economic benefits in detail

Economic growth

Economic growth, as defined by GDP, would be accomplished mainly through a combination of increased revenues from emerging circular activities, and lower price of production through the more than productive utilisation of inputs. These changes in input and output of economic production activities bear upon economy-wide supply, need, and prices. Its furnishings ripple through all sectors of the economic system adding to overall economic growth.

Material cost savings

Based on detailed product-level modelling, it is estimated that, in the sectors of circuitous medium-lived products (such as mobile phones and washing machines) in the European union, the annual net-textile cost savings opportunity amounts to up to USD 630 billion. For fast moving consumer goods (such as household cleaning products), at that place is a cloth cost-saving potential of up to USD 700 billion globally.

Job creation potential

The largest comparative study to date of the employment impacts of a circular economy transition points to "positive employment effects occurring in the case that the circular economy is implemented". This affect on employment is largely due to increased spending fuelled by lower prices; high-quality, labour-intensive recycling activities; and college skilled jobs in remanufacturing. New jobs will be created across industrial sectors, within pocket-sized and medium enterprises, through increased innovation and entrepreneurship, and a new service-based economy.

Innovation

The aspiration to supersede linear products and systems with circular ones is an enormous artistic opportunity. The benefits of a more than innovative economic system include higher rates of technological development, improved materials, labour, energy efficiency, and more profit opportunities for companies.

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Environmental and organisation-broad benefits

What impact will shifting to a round economic system have on the environment?

The potential benefits of shifting to a circular economy extend beyond the economic system and into the natural environment. By designing out waste and pollution, keeping products and materials in use, and regenerating rather than degrading natural systems, the circular economy represents a powerful contribution to achieving global climate targets

Ecology and system benefits in detail

Carbon dioxide emissions

For Europe, a circular economy development path could halve carbon dioxide emissions by 2030, relative to today's levels across mobility, food systems, and the built surroundings. In improver, sector specific analysis indicates that the United kingdom of great britain and northern ireland could reduce greenhouse gas emissions by 7.4 million tonnes per annum past keeping organic waste out of landfills.

Principal cloth consumption

The round economic system could event in a reduction of primary material consumption (i.e. auto and construction materials, real estate state, synthetic fertiliser, pesticides, agricultural water apply, fuels, and non-renewable electricity) past 32% past 2030.

Country productivity and soil health

Land degradation costs an estimated USD 40 billion annually worldwide, without taking into account the subconscious costs of increased fertiliser utilise, loss of biodiversity, and unique landscapes. College land productivity, less waste in the food value chain, and the return of nutrients to the soil volition enhance the value of land and soil equally avails. Returning biological material dorsum into the soil volition reduce the need for replenishment with additional nutrients. Recovering all of the nitrogen, phosphorus, and potassium from food, creature and human waste streams globally could contribute nearly 2.7 times the nutrients contained within the volumes of chemical fertiliser currently used. This is the round economic system principle of regeneration at work.

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The opportunity for companies

How will companies do good from the circular economic system?

Businesses would do good significantly by shifting their operations in line with the principles of the circular economy. These benefits include the cosmos of new profit opportunities, reduced costs due to lower virgin-material requirements, and stronger relationships with customers. The sliders beneath aggrandize on these and more benefits.

Opportunity for companies in item

Profit opportunities

Businesses could lower costs and create new profit streams. Assay of complex medium-lived products (eastward.1000. mobile phones) and fast-moving consumer goods (e.chiliad. household cleaning products) shows that the circular economy would support the following improvements:

• The cost of remanufacturing mobile phones could exist reduced past 50% per device
• Loftier-cease washing machines could be leased instead of sold – customers would save roughly a 3rd per wash, and manufacturers would earn roughly a third more in profits

Reduced volatility and greater security of supply

The shift to a circular economy means using less virgin material and more recycled inputs, reducing a company'southward exposure to ever more volatile raw materials prices and increasing resilience. The threat of supply chains being disrupted by natural disasters or geopolitical imbalances is reduced because decentralised operators provide alternative materials sources.

New need for business organization services

A circular economy would create demand for new business services, such every bit:

• Drove and reverse logistics companies that support end-of-employ products being reintroduced into the system
• Production remarketers and sales platforms that facilitate longer utilize or higher utilisation of products
• Parts and component remanufacturing, and product refurbishment offering specialised knowledge and services

Improved customer interaction and loyalty

Circular solutions offer new ways to creatively appoint customers. New business models, such as rentals or leasing contracts, establish longer-term relationships, as the number of touch points increases over the lifetime of a product. These business concern models offer companies the chance to gain unique insights into usage patterns that tin pb to a virtuous circle of improved products, better service, and greater customer satisfaction.

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The opportunity for individuals

What does the circular economy hateful for individuals?

The circular economic system volition non simply benefit businesses, the environment, and the economy at large, simply likewise the individual. Ranging from increased disposable income to improved living atmospheric condition and associated wellness impacts, the benefits for individuals of a system based on the principles of circularity are significant.

The opportunity for individuals in item

Increased disposable income

Analysis shows that a circular economy could increment the disposable income of the average European household. The toll of products and services would be reduced and at that place would be less unproductive time (e.g. fourth dimension stuck in traffic). The average disposable income for Eu households would increase by EUR 3000 by 2030.

Greater utility

The utility, or benefit, felt by customers may be enhanced by the additional choice or quality that round models provide. Customer choice increases equally producers tailor products or services to better come across customer needs.

Reduced obsolescence

For customers, overcoming premature obsolescence (the untimely failure of products) will significantly bring down total ownership costs and deliver college convenience as they would avoid hassles associated with repairs and returns.

Health

Shifting to a circular nutrient system could lower the healthcare costs associated with pesticide utilise past USD 550 billion globally. At that place would also be significant reductions of antimicrobial (an agent that kills microorganisms or stops their growth) resistance, air pollution, water contamination, and foodborne diseases. It is estimated that a circular economic system for food, catalysed by cities, could save 290,000 lives otherwise lost to outdoor air pollution per twelvemonth, past 2050.

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Systems

Shifting from linear to circular requires systemic solutions.

There is no simple fix and no stones can be left unturned in the pursuit of organisation change. Business concern models, production and service design, legislation, accounting practices, urban planning, farming practices, materials extraction, manufacturing, and more, all currently take undesirable qualities from a circular perspective. Yet, we cannot change just 1 element of the existing system and await the change we demand. Systems alter is difficult to reach and great ideas frequently don't come up to fruition because of failures in managing the complexities involved. What nosotros should do, though, is larn to understand how complex systems - like an economy - operate, considering agreement is the first step towards creating better solutions.

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Systems thinking

If nosotros practise a poor job of designing systems - by, for example, leaving out central elements - we run the risk of being surprised by system failures. The diagram beneath is a classic example of a poorly-mapped-out system, still it is widely used in Economics courses. This 'circulation of coin' diagram misses out environmental factors, unpaid work, and the commons, all of which are crucial areas of our economy. One might say they are hitched to everything else.

We need to be careful that our way of thinking nigh the circular economy isn't found equally wanting. Discussions about the circular economy can often be rather narrow: airtight loops, product service systems, business models, and other such applied actions. Simply a more holistic look at the system reveals other necessary elements, such as the science and philosophy that shapes how we think and act, as well every bit legislation and infrastructural elements.

Instead, all of this could be characterised as a sandwich, where the tasty filling is the function most are happy to focus upon. Without the other elements there is a real adventure that the circular economic system becomes 'business as usual' with a few tweaks here and there.

For an in-depth expect at how systems operate, yous might want to bank check out this smashing read by Professor Thomas Homer-Dixon.

The bug within the electric current economy

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The origins of the concept

An idea whose time has come.

The notion of circularity has deep historical and philosophical origins. The thought 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 calculator-based studies of non-linear systems unambiguously revealed the complex, interrelated, and therefore unpredictable nature of the globe we live in – more akin to a metabolism than a auto. With electric 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.

The generic concept has been refined and developed by a number of schools of thought that you can read nearly in the expander below.

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Schools of thought

German pharmacist Michael Braungart and American architect Bill McDonough, developed the Cradle to Cradle™ concept and certification process. This design philosophy considers all material involved in industrial and commercial processes to be nutrients, of which there are two primary categories: technical and biological. The Cradle to Cradle framework focuses on blueprint for effectiveness in terms of producing products with positive impact.

Cradle to Cradle's three principles

ane. Cradle to Cradle design takes inspiration from natural systems, where there is no concept of waste: everything is a resource for something else. Biological nutrients should exist safely returned to the soil, while technical nutrients should exist used once more and again at high quality.

2. The 2nd principle is to use make clean and renewable free energy. The argument goes that natural systems thrive on current solar income and human systems could as well. Renewable energy is clean (at the indicate of employ), depression-cost to operate, creates no emissions in use, and utilises arable resources.

3. Finally, gloat diversity: diversity builds resilience in natural systems, and can practise so in human systems, too. Equally, no two places are the aforementioned: a diverse approach is often necessary to overcome the challenges and meet the opportunities offered past unlike geographies.

Bill McDonough - Resources Abundance past Design

In his 1976 research report to the European Commission, Walter Stahel, builder and economist, sketched a vision of an economy in loops (or round economy), The Potential for Substituting Manpower for Energy, co-authored with Genevieve Reday. The vision looked at its bear upon on job creation, economical competitiveness, resources savings, and waste prevention.

Credited with having coined the expression "Cradle to Cradle" in the late 1970s, Stahel worked at developing a 'airtight loop' arroyo to production processes and created the Product Life Institute in Geneva more than 25 years ago. It pursues four main goals: product-life extension, long-life appurtenances, reconditioning activities, and waste product prevention. It likewise insists on the importance of selling services rather than products, an idea referred to as the 'functional service economy', now more widely absorbed into the notion of 'performance economic system'. Stahel argues that the circular economic system should be considered a framework: as a generic notion, the circular economy draws on several more specific approaches that gravitate around a prepare of basic principles.

Read more than about Walter Stahel'due south thinking in his latest volume: The Circular Economy – A User's Guide.

Walter Stahel - Performance Economic system

Watch Walter Stahel introduce his 'Performance Economy' concept:

"Innovation inspired by nature" - Janine Benyus

The idea at the cadre of Biomimicry is that life has already solved nearly of the problems we are currently grappling with. To requite some obvious examples: birds can fly with no demand for fossil fuels, barnacles can attach to underwater surfaces and have a tremendous power to stay attached, insects outweigh humans yet cause no pollution or waste, leaves soak up sunlight and manage to efficiently and effectively transport water and nutrients through a dumbo network.

Biomimicry holds that nosotros can detect solutions to human challenges past emulating nature's patterns and strategies.

Janine Benyus, author of Biomimicry: Innovation Inspired by Nature, defines her approach as "a new discipline that studies nature's all-time ideas then imitates these designs and processes to solve human being problems".

Visit the Biomimicry Establish to learn more virtually biomimicry.

Janine Benyus

Watch Janine Benyus describe the application and the potential of biomimicry in this talk:

The study of textile and energy flows through industrial systems.

Focusing on connections between operators inside the 'industrial ecosystem', this approach aims at creating closed-loop processes in which waste matter serves as an input, thus eliminating undesirable by-products. Industrial ecology adopts a systemic point of view, designing production processes so they perform as close to living systems as possible. This is accomplished by because local ecological constraints and looking at global affect of processes from the outset.

This framework is sometimes referred to as the 'scientific discipline of sustainability', given its interdisciplinary nature. The principles of industrial ecology can also exist applied in the services sector. With an accent on natural capital letter restoration, industrial ecology also focuses on social wellbeing.

In the US, John T. Lyle started developing ideas on regenerative design that could be applied to all systems, i.eastward., beyond agriculture, for which the concept of regeneration had already been formulated.

Arguably, he laid the foundations of the round economy framework, which developed and gained notoriety thanks to McDonough (who had studied with Lyle), Braungart and Stahel. Today, the Lyle Center for Regenerative Studies offers courses on the subject area.

Initiated past former Ecover CEO and Belgian businessman Gunter Pauli, the Bluish Economy is an open-source movement bringing together physical case studies, initially compiled in an eponymous report handed over to the Club of Rome.

Every bit the official manifesto states, "using the resources available in cascading systems, (…) the waste material of one production becomes the input to create a new cash flow". Based on 21 founding principles, the Bluish Economy insists on solutions being adamant by their local environment and physical/ecological characteristics, putting the emphasis on gravity every bit the primary source of energy. The report, which doubles upwardly equally the movement'south manifesto, describes "100 innovations that can create 100 million jobs inside the side by side 10 years", and provides many examples of winning South-South collaborative projects— some other original feature of this arroyo intent on promoting its hands-on focus.

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Why now?

Moving from vision to reality.

Our economy is currently locked into a system which favours the linear model of production and consumption. Notwithstanding, this lock-in is weakening under the pressure of several powerful disruptive trends. We must accept reward of this favourable alignment of economic, technological, and social factors in order to accelerate the transition to a circular economy. Circularity is making inroads into the linear economy and has moved across the proof of concept; the claiming we face now is to mainstream the round economy, and bring it to scale.

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Source: https://archive.ellenmacarthurfoundation.org/explore/the-circular-economy-in-detail