Circular economy and the shift towards a zero-waste future

 

In this article we will talk about the buzz word, "Circular Economy". But before going to the topic, I want you to answer these questions-

How do you dispose your tooth brush after its useful life? 

How do you dispose old electronics and used batteries?

Do you dispose plastic waste separately?

Majority of the business models today operate linearly. Lets understand what is a linear economy and what are the challenges associated with a linear business model.

Linear Economy and its challenges

The linear economy or a linear business model is based on the "take-make-dispose" system. For example, in case of a plastic bag the take-make-dispose model looks like this- 

1. Crude Oil (Extracted from ground)
2. Processed and Transported to Refineries
3. Refined to separate out Naphtha
4.  Naphtha processed to make petrochemicals
5. Polyethylene (LDPE/HDPE) molded/extruded to make bags
6. Polyethylene bags sold to businesses/wholesalers/retailers
7. Polyethylene bags used by end-consumers
8. Disposed to the ground

Lets now see the challenges associated with a linear business model-

Resource depletion: The linear economy relies on the continuous extraction of raw materials, which are finite and becoming increasingly scarce. This reliance on virgin resources can lead to higher costs and supply chain disruptions.

Environmental degradation: The linear economy creates a significant amount of waste and pollution, which can lead to environmental degradation, including air and water pollution, climate change, and biodiversity loss.

Economic inefficiency: The linear economy is often wasteful and inefficient, leading to higher costs and lower profitability. For example, many products are discarded before they reach the end of their useful life, resulting in lost value and resources.

Social impacts: The linear economy can have negative social impacts, such as exploitative labor practices and unsafe working conditions, particularly in industries with low wages and poor working conditions.

What is a Circular Economy?

Circular economy refers to an economic system that aims to eliminate waste and maximize the use of resources. In a circular economy, products and materials are kept in use for as long as possible, through strategies such as recycling, reusing, refurbishing, and repairing. This approach aims to create a closed-loop system in which waste is minimized, natural resources are conserved, and the environmental impact of economic activities is reduced.

The circular economy model is in contrast to the traditional linear economy, in which products are made, used, and then disposed of. This linear model is unsustainable, as it creates a significant amount of waste and puts a strain on natural resources. In contrast, the circular economy is focused on creating value from waste, reducing the need for virgin resources, and promoting a more sustainable and efficient use of resources.

Lets now understand what are the different types of circular business models-

Circular Business Models

There are several different types of circular business models, including:

Product-as-a-Service (PaaS): In this model, companies retain ownership of the product and lease it to customers, who pay for access rather than ownership. The company is responsible for maintaining and repairing the product, as well as recycling or refurbishing it at the end of its useful life.

Closed-Loop Supply Chain: This model involves the creation of a closed-loop system in which waste products are recycled or reused within the same supply chain. This can reduce the need for new materials and reduce waste disposal costs.

Remanufacturing: In this model, used products are disassembled, cleaned, and refurbished, and then sold as new. This can reduce waste and extend the life of products.

Circular Design: This model involves designing products with a focus on reducing waste and promoting reuse and recycling. This can include using recyclable or biodegradable materials, designing for disassembly, and creating products with a longer useful life.

Resource Recovery: In this model, waste products are collected and processed to recover valuable resources, such as metals, plastics, or organic materials. These resources can then be used to create new products or sold to other industries.

Overall, circular business models are designed to promote sustainable development and reduce the environmental impact of economic activities. By adopting circular business models, companies can reduce costs, increase efficiency, and create new opportunities and markets.

Want to dive deeper into this topic? Check out Ellen Macarthur Foundation for more information and ideas.

I hope this article was useful. Keeping watching out this space for more interesting topics on Sustainability.