Circular economy

The circular economy has long been perceived by many people as an approach that favours recycling and reuse of resources rather than dumping them in a landfill, which was the basis of the old linear approach. However, this is only partly true and recycling should in fact be considered only the last option among all circular solutions.

The new Circular Economy Action Plan for a Cleaner and More Competitive Europe (COM/2020/98) is one of the main building blocks of the European Green Deal. According to the plan, the circular economy is defined as “a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible”.

It shows that recycling is only the final part of a product’s lifecycle and as such should be avoided for as long as possible. It all starts with design of the given product or service. However, figuring out how to sustainably make certain things is not as straightforward as it may seem at first glance. The first step towards limiting the amount of resources used should be prevention so that a product that ends up as waste actually never emerges in the first place. However, this is not easy to achieve, because since the dawn of humanity we have been orientated towards growth, escaping poverty and eliminating suffering. In the modern era, when we have yet to incur severe effects of global warming that would lead us to change our priorities, suffering is often connected to discomfort. Therefore, the greatest challenge of our current society is to find a way to maintain the level of comfort that developed countries possess, while decreasing our carbon footprint.

The European Circular Economy Action Plan is one of the initiatives aimed at achieving this. Its purpose is to redesign the system via legislative incentives. Producers are encouraged to create long-lasting products that are repairable and can serve various users throughout their lifecycle. Another step towards this goal is standardisation of parts and key components so that they are easily replaceable. This forces producers to change their business strategies and there are manufacturers across all sectors, from apparel to the automotive industry, that are experimenting with new ways of delivering the product experience.

Data collection and analysis play an important role in this puzzle, as the various elements of the circular economy system are very much intertwined and co-dependent. Carefully measuring and assessing energy consumption and greenhouse gas emissions helps to identify which processes are really helping to mitigate global warming and which of them only seem to do so.

The important thing to keep in mind is that no matter how efficient the circular economy may be compared to the linear economy, it still consumes a lot of energy and resources. Furthermore, history has shown us many times that once we manage to do something more efficiently, it often leads us to even greater consumption than before (the so-called rebound effect) – for instance, when computers emerged at workplaces, they did not provide people with more free time as many were expecting, as a different workload was imposed on them instead. Therefore, together with the technical approach of the circular economy, it may be necessary to also address the problem of overconsumption. 

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Source: Eurostat, 2021

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Association for Foreign Investment