When the economy goes in circles, everybody wins.
Welcome to the emerging world of the circular economy. Faced with rising prices for energy and raw materials, along with pressures from environmentalists and regulators who have passed “extended producer responsibility laws” in Europe and some U.S. states, forward-thinking companies are finding ways to take back, reuse, refurbish or recycle all kinds of things that would otherwise be thrown away. In contrast to the traditional “take-make-dispose” linear economy, which depletes resources, a circular economy is an industrial system that is restorative or regenerative by intention and design.
Inspired by nature, a circular economy aspires not merely to limit waste but to eliminate the very idea of waste: Everything, at the end of its life, should be made into something else, just as in the natural world, one species’ waste is another’s food.
The transition to a circular economy could generate savings of more than $1 trillion in materials alone by 2025, according to an analysis by the U.K.-based Ellen MacArthur Foundation, McKinsey & Company and the World Economic Forum, which are collaborating to promote circular thinking.
So are we moving closer to the circular economy — or further away? Accurate data is hard to come by, but the U.S. Environmental Protection Agency estimates indicate that recycling rates grew rapidly from 1980 through 2000, and only gradually since then. Disposal of waste to landfill declined from 89 percent of the amount generated in 1980 to 54 percent — about 135 million tons — in 2012.
Clearly there’s lots of work ahead for advocates of the circular economy. But the vision they are pursuing is a bold one: In a truly circular economy, where waste becomes nutrients and energy is renewable, economic growth would be decoupled from environmental restraints. Companies could sell more stuff without generating pollution. Consumers could buy more stuff, without guilt. What’s not to like?