A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment. In contrast to the ‘take-make-waste' linear model, a circular economy is regenerative by design and aims to gradually decouple growth from the consumption of finite resources. After defining what an economy actually is, this learning path explores the nuances of the concept of a circular economy, including the difference between biological and technical materials, the different opportunities that exist to keep materials and products in use, and the history of the idea. Finally, the benefits of shifting from a linear to a circular economy are highlighted.

It is based on three principles:

  • Design out waste and pollution
  • Keep products and materials in use
  • Regenerate natural systems

Source: archive.ellenmacarthurfoundation.org

Why is the circular economy important?

The circular economy is important because it can help to reduce pollution and waste, as well as the depletion of natural resources. It is based on three principles: design out waste and pollution, keep products and materials in use, and regenerate natural systems. By following these principles, the circular economy can help to improve social and environmental sustainability.

The circular economy is often seen as an alternative to the traditional linear economy, which is based on a ‘take-make-waste’ model. In the linear economy, resources are extracted from the natural environment, used to create products, and then discarded after they have been used. This waste often ends up in landfill, where it can release harmful substances into the ground and water.

The circular economy is a more sustainable alternative to the linear model, as it aims to keep resources in use for as long as possible. By doing so, it reduces the need for new resource extraction, and can help to reduce pollution and waste. There are many ways to design out waste and pollution in the circular economy, such as using recycled materials, designing products for disassembly and repair, and sharing resources.

The circular economy is not only good for the environment, but can also have positive social and economic benefits. For example, it can create jobs in the recycling and repair industries, and reduce dependence on imported resources. Additionally, the circular economy can help businesses to save money by reducing waste and increasing resource efficiency.

The circular economy is still in its early stages of development, but there are already a number of businesses and organizations around the world that are working towards its goals. The Ellen MacArthur Foundation is one of the leading organizations promoting the circular economy, and has developed a number of resources to help businesses transition to this new model.

The circular economy is an important step towards a more sustainable future, and has the potential to bring about positive social and environmental change.

The Principles Of The Circular Economy: Energy and Resources Are Gold

At its core, a circular economy model has the intention of designing out waste. In fact, a circular economy is based on the idea that there is no such thing as waste. In order to achieve this, products are designed to last (good quality materials are used) and optimized for a cycle of disassembly and reuse that will make it easier to handle and transform or renew them.

In the end, these tight product cycles differentiate the circular economy model apart from disposal and recycling, where large amounts of embedded energy and labor are lost. The ultimate goal is to preserve and enhance natural capital by controlling finite stocks and balancing renewable resources flows.

The Principles Of The Circular Economy: Following Nature’s Cycles And Designs

The circular economy model makes a distinction between technical and biological cycles. Consumption happens only in biological cycles, where biologically-based materials (such as food, linen or cork) are designed to feed back into the system through processes like anaerobic digestion and composting.

These cycles regenerate living systems, such as soil or the oceans, which provide renewable resources for the economy. By their turn, technical cycles recover and restore products (e.g. washing machines), components (e.g. motherboards), and materials (e.g. limestone) through strategies like reuse, repair, remanufacture or recycling.

Ultimately, one of the purposes of the circular economy is to optimize resource yields by circulating products, components, and the materials in use at the highest utility at all times in both technical and biological cycles.

The Principles Of The Circular Economy: All In With Renewable Energies

The last principle of a circular economy has to do with the fact that the energy required to fuel this cycle should be renewable by nature, with the purpose of decreasing resource dependence and increasing systems’ resilience. In this sense, this principle is about developing the systems’ effectiveness by revealing and designing out negative externalities.  Source: youmatter.world

Examples of the circular economy in action

1.     Recycling: Recycling is one of the most common and well-known examples of the circular economy in action. By recycling materials that would otherwise be considered waste, we can give them new life and prolong their usefulness.

2.     Repair and reuse: Another example of the circular economy at work is repair and reuse. By repairing broken or damaged items, we can extend their lifespan and avoid the need to replace them with new things.

3.     Upcycling: Upcycling is a form of recycling that repurposes waste materials into new products of higher quality or value. This keeps resources in use for longer and reduces the need for virgin materials.

4.     Closed-loop manufacturing: Closed-loop manufacturing is a type of manufacturing process in which waste materials are reused or recycled back into the production process. This helps to reduce environmental impact and improve resource efficiency.

5.     Product life extension: Product life extension is another way to make use of resources for longer and reduce waste. By extending the life of products through repair, refurbishment, and maintenance, we can keep them in use for longer and avoid the need for replacement.

One example of a business that has adopted the principles of the circular economy is IKEA. The furniture company has started to design its products with disassembly and repair in mind, and offers a take-back and recycling service for its products. IKEA has also developed a range of sustainable materials, such as recycled plastic, that can be used to create new products.

Another example is the clothing company Patagonia. Patagonia designs its clothing to be durable and long-lasting, and offers a repair service for damaged items. The company also encourages customers to trade in their old clothes for new ones, which are then either sold or recycled.

According to the U.S. Chamber of Commerce Foundation , a shift toward the circular economy could accomplish the following by 2025: Generate an estimated $1 trillion annually in economic value Create more than 100,000 new jobs Source: (rts.com)

Tips about the circular economy

There are a few key things to keep in mind if you want to adopt the principles of the circular economy:

1. Design for durability and repairability: When designing products, consider how they can be made to last longer and be repaired or reused.

2. Reduce waste: Minimize waste through strategies like recycling, upcycling, and closed-loop manufacturing.

3. Use renewable resources: Use renewable resources to fuel the circular economy and reduce dependency on finite resources.

4. Extend product life: Extend the life of products through repair, refurbishment, and maintenance.

5. Trade in or recycle old products: When you’re finished with a product, trade it in or recycle it so it can be reused or upcycled.

By following these tips, you can help to reduce waste, extend the life of products, and use renewable resources to fuel the circular economy.


The circular economy is a model of economic activity that aims to keep resources in use for as long as possible. By recycling, repairing, and upcycling products, we can prolong their usefulness and reduce waste. A shift toward the circular economy could generate an estimated $1 trillion annually in economic value by 2025.

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