Many companies, especially those in the energy, utilities and resources sectors, are working towards the development of the circular economy which is based on managing products in an environment-friendly way. It is one of the steps many are taking to combat climate change and promote sustainability.

Defining circular economy

To define a circular economy, it is helpful to look at the existing model called the linear economy. In a linear economy raw natural resources are gathered, converted into products, and discarded. The circular economy is quite the opposite of that.

The circular economy model seeks to bridge the gap between production and the natural ecosystems’ cycles. It aims to keep the resources useful and in circulation for as long as possible to help conserve materials and reduce waste. Waste is reduced to a minimum with circular economic activity since everything generated is continuously transported and used somewhere else.

This closed loop strategy does not seek to terminate growth. Instead, the circular economy seeks to bring industry back into harmony with the environment so that humans can continue to thrive.

Why is circular economy important

The circular economy provides us with the tools we need to solve both climate change and biodiversity loss while also meeting critical socioeconomic needs. It empowers us to increase prosperity, jobs, and resilience while reducing greenhouse gas emissions, waste, and pollution.

1. Promotes effective management of resources

We continue to deplete nonrenewable resources, such as oil and metal. This, however, is not a sustainable practice. Reusing materials and renovating old products rather than tossing them away are the norm in a circular economy. As a result, we utilise fewer nonrenewable resources. A genuine circular economy will have zero waste, which means that nothing is wasted away.

Zero waste means fewer plastics and less rubbish in our oceans, and fewer landfills. It also means that there is less need to extract finite resources; instead, we reuse them.

2. Reduces carbon emissions

Materials management, such as material production and disposal, produces up to two-thirds of greenhouse gas emissions, according to the European Environment Agency. A circular economy would help reduce this because its entire strategy is based on sustainable material management. 

3. Provides opportunities for companies

Existing businesses can benefit from a more secure supply of resources since in a circular economy, we reuse what we already have rather than relying on scarce resources. This may reduce material costs, allowing businesses to operate more efficiently. 

Customer loyalty may also increase from this strategy. Green initiatives are among the most important values for customers today, and they want to support organisations whose philosophies correspond with their own. Adopting a more environmentally friendly business approach may help you expand your consumer base and attract more loyal customers.

4.  Consumer benefits

Aside from environmental benefits, a circular economy provides other consumer benefits. Because the reuse of materials prevents techniques such as planned obsolescence, your products will last longer.

It also offers higher disposable income because it encourages habits such as buying secondhand products, leasing or renting rather than owning, and other more cost-effective practices.

Global responses to circular economy

The circular economy concept has gained popularity in recent years, inspiring environmentalists, governments, and corporations alike. Circularity is now widely recognized as the most potential solution to our planet’s mounting sustainability concerns.

According to the United States Environmental Protection Agency, circular economy strategy exhibits continuity in their emphasis on decreasing negative lifecycle consequences of materials, including climatic impacts, limiting the use of toxic materials, and decoupling material use from economic growth and addressing societal demands. 

Australia’s government is also working towards a circular economy as they get serious about reducing waste and making use of valuable recycled materials. Under the National Waste Policy Action Plan, Australia is supporting initiatives to modernise and transform how they manage and handle waste in order to promote the transition to a circular economy. 

The Recycling Modernisation Fund (RMF) will also modernise Australia’s recycling infrastructure, enhancing their circular economy capabilities by identifying novel solutions for onshore recycling and assisting in the remanufacturing of items containing recycled content. 

Will you join the movement too?

Achieving a circular economy is not a minor task. It will necessitate a global effort by individuals, businesses, and governments.