What Is a Circular Economy and Why Is It Important?

What Is a Circular Economy and Why Is It Important?

We live in a throwaway society, and it’s taking a significant toll on the environment.

Widespread recycling has drastically reduced the quantity of waste that ends up in landfills. According to the Environmental Protection Agency (EPA), this decreased from 94 percent of the total amount generated in 1960 to around 52 percent of the total generated in 2017.

But recycling alone can’t combat the huge amount of packaging, food, products, and everything else, created and then discarded just a short time later. This model is inarguably unsustainable. And the answer might well be transitioning to a whole different type of global economy.

What Is a Circular Economy and Why Is It Important?
A fully circular economy would be far more resource efficient than a linear one | Elkhamlichi Jaouad / EyeEm / Getty

What is a circular economy?

A circular economy is a sustainable model of production and consumption. It uses, reuses, repairs, refurbishes, shares, and finally, recycles. This ensures the maximum value is extracted from items with minimal impact and minimal waste.

For food production, the model of regeneration we see in the natural world is the ideal. Zero waste is produced, because it becomes an integral part of another lifecycle.

For example, fruit trees grow and produce food in the wild. Animals and other lifeforms eat from the tree (and from the ground). Then, any uneaten fruit decomposes to fertilize the soil itself, supporting new growth. The natural world is cyclical, and the life and decay of plant (and all) matter is a self-perpetuating, self-contained system.    

In short, a circular economy would mimic this. The basic principle could be applied to various specific industries, such as fashion, where each item of clothing is designed with its future use and eventual recycling in mind.

A circular economy is the opposite of what we currently have, which is a linear economy. Producing items, using them, and discarding them. The linear model has a disproportionate impact on the environment, exacerbates resource scarcity, and compounds social and economic inequality worldwide.

What does a circular economy look like?

According to the Waste and Resources Action Programme (WRAP) — a UK-based charity that supports the widespread transition to a circular economy — the ideal model requires us to extract maximum value from each item.

Then, at the end of its life, recover and recycle as much as possible for reuse. In short: a circular economy is a cyclical closed-loop system that minimizes excess. Moving to such a model could reduce waste, improve resource productivity, and better manage resource scarcity. It could also help reduce the environmental impact of production itself.

The Ellen MacArthur Foundation, which also advocates for a circular economy, explains that the efficiency of natural living systems is based on circular, cyclical life cycles.

“The predominant linear economy, which is based on taking materials out of the ground to make products that are then thrown away and replaced with other products, has underpinned unprecedented levels of economic growth in the last seven decades. But its limitations are becoming obvious,” Emma Chow, project lead on the Ellen MacArthur Foundation’s Food initiative, told LIVEKINDLY.

What Is a Circular Economy and Why Is It Important?
Recycling is a key part of a circular economy, but only as a last resort | Anna Stills/Getty

Is recycling part of a circular economy?

Recycling is an essential part of the circular economy model. It is now a mainstream necessity and has made a considerable difference to the quantity of waste reaching landfills..

When products reach their end of life, recycling is one way to ensure they remain within the closed-loop. But it is not a catch-all solution. Recycling ideally represents a last resort, when no other alternatives for re-use, repair, and adaptation are available.

This is because recycling is still relatively inefficient when compared to repairing and upcycling. It uses energy, space, time, and other resources.

Our current recycling system highlights this issue. While processing schemes are increasingly widespread, the sheer quantity of packaging and other waste produced every year remains staggering. The majority of this cannot be recycled.

According to the E.P.A., the U.S. alone generated 292.4 million tons of municipal solid waste in 2018.

“Recycling has a role to play in the circular economy, but that role is minimal,” explained Chow. “Upstream innovation is a priority. That is, designing out waste and pollution from the outset. Rather than trying to deal with the consequences of poor design at the end of life through recycling.”

How can we improve the systems we already have?

Recycling might be increasingly mainstream, but even within our current system, there is plenty of room for improvement. In the U.S., the average American recycles just 35 percent of their total waste. This adds up to approximately 234 pounds (106.2kg) per person, every single year. 

For many, lack of convenient access remains a major impediment to recycling. While it is still a critical component of any effective circular economy, recycling still can’t mitigate the amount of waste being produced. Or how it’s produced.

“The circular economy calls for a holistic rethinking of production and consumption,” said Chow.

For example, while production must be reduced and recycling increased, consumers should aim to keep items — clothing, electronics, everything — until the very end of their useful life. Only replacing (and hopefully recycling) products when absolutely necessary.

Currently, planned obsolescence — an in-built finite lifespan — limits the useability of certain products and technology, making this difficult. For example, Apple has repeatedly been accused of using software updates to limit the performance of older iPhones ahead of the release of new models.

Many products are also designed in such a way that they cannot be repaired. Another business model perpetuated by Apple and other technology manufacturers.

Should we be producing less?

This not only impacts the lifespan of products, but also affects whether they can or can’t be recycled. And, if they can, how effectively. As ever recycling systems play an essential role, but production and consumption must be revolutionized to support this.

One potential solution to this problem would be to drastically reduce the number of models, types, and variations of products. Specifically cell phones and fast fashion items, which launch throughout each year.

Another would be to emphasize rental or licensing in place of personal ownership. Market insight firm Mintel predicts the rapid growth of the rental economy in coming years due to its combination of affordability, practicality, and sustainability. Clothing rental, in particular, is increasingly popular.

However, shaking the cultural norms of consumer culture as they exist today (which particularly emphasize consumption, new things, and private ownership) will require a huge adjustment in our thinking and habits. It will also require a huge adjustment in the way companies conduct business.

Who is leading the circular economy movement?

According to a Pulse of the Fashion Industry report from 2019, the fashion industry alone generates 92 million tons of waste every year. This is over 42 million tons more than is produced by the electronics industry. It also makes up 4 percent of the world’s total waste.

The culture of fast fashion, in particular, historically relies heavily on worker exploitation, toxic dyes, and cheap fabric blends. Perhaps because of this, certain companies within the sector are taking steps to reduce their impact on the environment, including many who have previously received significant criticism for their practices.

Last year, Swedish multinational H&M launched a clothing recycling program that spins old fibers into new clothing. Looop, the world’s first-ever in-store clothing recycling system, cleans, shreds, and creates new fabrics, all without using water or dye at any point.

The company is part of the Ellen MacArthur Foundation’s “Make Fashion Circular Initiative,” which specifically focuses on transforming the textiles and clothing industry. Sportswear brand Adidas is also a participant in the initiative. It has emphasized vegan, sustainable, and recyclable materials in many of its recent designs.

In 2019, the company introduced the Futurecraft.LOOP, a fully recyclable running shoe designed to be remade at the end of its life. Previously Adidas also partnered with Parley for the Oceans to produce trainers made entirely of reclaimed and recycled plastic marine waste. The company plans to launch the recycling system for the Futurecraft.LOOP later this year.

What Is a Circular Economy and Why Is It Important?
Salomon is just one of the brands working on recyclable sneakers | Salomon

The truth about shoes and closed-loop production

“Sneakerhead” culture originated in the U.S. in the 1980s following the launch of the iconic first Air Jordans and alongside booming hip-hop culture. Shoes are a popular vehicle for playful self expression, and sneaker culture has led to a boom in popularity enjoyed around the world.

But current methods of shoe production are also exceptionally carbon intensive, accounting for 1.4 percent of all global greenhouse emissions. For reference, air travel is responsible for 2.5 percent. Over 23 billion pairs of shoes are produced each year, and more than 300 million are thrown out.

They’re also tricky to recycle, due in part to reduced quality, increased production, and mixed materials. This combination of factors makes shoe production a key area for improvement, and an ideal candidate for the circular economy model.

The shoes of the future

Adidas is not the only sneaker producer working on a sustainable alternative to current production standards. French brand Salomon is also exploring recyclable footwear, and its Index.01 road running shoe can be easily recycled at the end of its life into fabric, alpine ski boots, and other products.

The company even uses water-based glue and polyester stitching, allowing for minimal material contamination and maximum recyclability. A Salomon representative told LIVEKINDLY that the Index.01 will launch in April 2021.

Swiss shoe company ON already offers a first-of-its-kind subscription service, where customers make monthly payments to rent a pair of its Cyclon running shoes. When worn out, the shoes are replaced and recycled by the company. ON produces its recyclable running shoes using castor beans.

Outside of the sportswear sector — but also affiliated with the Ellen MacArthur Foundation — brands such as Ikea are also offering innovative solutions to reduce waste. The Swedish furniture and homeware brand introduced a buy-back scheme last year as part of its overall sustainability efforts.

In general, many companies are increasingly aware of their environmental footprint, and 2020 saw several add circular economy–style pledges and goals to their sustainability policies.

Of the hundreds of brands that work with the Ellen MacArthur Foundation, Chow specifically highlighted healthy food brand ZENB, beverage company AB InBev, and the huge multinationals Nestlé and Danone.

What Is a Circular Economy and Why Is It Important?
Hydroponics and other modern farming methods can help reduce waste in agriculture | David Madison/Getty

The food system and the circular economy model

Food waste is an enormous contributor to climate change, and 8-10 percent of all greenhouse gas emissions are associated with uneaten food. It’s also on the rise.

But the circular economy model can also be applied to global food production by de-incentivising over-consumption, emphasizing the need to share, reuse, and recycle when necessary, and streamlining the entire process.

Currently too much food is produced, too much of it is wasted, and not enough is reaching the people that need it. This is a humanitarian crisis, but it is also a question of efficiency.

Despite the fact that between 30 and 40 percent of the national food supply is wasted annually in the U.S. alone, more than 9 million people die of hunger every single year. World hunger could be ended with less than 25 percent of the combined food waste from the U.S., UK, and Europe.

In addition to optimizing the production and distribution of food, a circular food system would also reduce other waste wherever possible. Hydroponics and aeroponics (both methods of growing plants without soil) have been highlighted as potential farming techniques of the future. 

They can help minimize the use of resources due to their closed-loop systems — hydroponics requires 50-90 percent less water than conventional methods — and both frequently deliver higher yields than traditional methods.

Protein production and resource efficiency

Transitioning to a circular economy could address approximately half of the carbon emissions associated with our food system. But the other half has largely to do with the food we consume.

Animal agriculture has a significant impact on global carbon emissions. The factory farming of cattle for beef and dairy products is a particular contributor to global warming and pollution. In addition to methane emissions, factory farms have a significant impact on the local environment. This is due, in part, to overcrowding, disease, and poor waste control.

A University of Oxford study from 2018 suggests that cutting back on meat and dairy is the single biggest way an individual can reduce their environmental impact. While even national dietary guidelines are tying meat reduction and plant-based foods to climate change mitigation.

The Intergovernmental Panel on Climate Change (IPCC) confirms that vegetable protein is typically more sustainable than animal protein. It also highlights plant-based eating as a key way to overhaul the global food system. But once again, this will require a global shift both away from animal products and towards circular, plant-based food production.

“Consumers are not the only ones responsible for making the right choices,” added Chow. “If more delicious, plant-based alternatives to animal protein were present on the market, choosing plant-based products would be much easier.”