Circular Economy: Paradigm Shift or Business as Usual?

Global mean temperature is increasing, sea levels are rising and biodiversity is declining at an alarming rate rapidly throughout the world. All this is happening while the world continues to grow, and our environmental footprint with it. Planet earth is facing great challenges; one could say we are experiencing an actual environmental crisis.

What is our response to climate change, air pollution, species extinction and all the environmental problems?

A possible solution for the environmental crisis: the Circular Economy.

The concept of a Circular Economy has gained momentum from businesses, NGOs, and policy makers all around the world. The European Commission is fostering the implementation of a Circular Economy Action Plan across Europe, declaring that a “greener economy means new growth and job opportunities“. Many countries are producing their own ambitious circular economy agendas, perceiving the model as an almost magical solution to tackle the global environmental crisis, promising new “green growth”.

What is a circular economy? 

In 2010, the Ellen MacArthur Foundation was launched with the aim of popularizing the idea of a circular economy, which aims “to optimise resource-use yields in the economy and, as a consequence, minimise the creation of waste. The core idea is to ‘close the entire loop’ of the production cycle (cradle-to-cradle) and maximise the recycling and re-use of material. The concept promotes new product design to facilitate such re-use and recycling, as well as new product-service models that transform the way we consume and who owns the product.” Learn more here.

Unlike the linear economy, which is characterized by short-term consumption, the circular economy aims to create an (almost) closed loop system.

The recent upsurge of political and business interest in the idea of a circular economy raises a crucial question:

Is this a holistic transformation and a great change, or only a greener version of business as usual?

Sevan Holemans, who launched an urban agriculture business in Brussels, raises several questions about the Circular Economy model as it is currently interpreted and applied by many big companies around the world:

“How can companies such as Apple, H&M or Nestlé claim to “accelerate the transition towards circular economy” and receive prizes for their “considerable achievements” in the field, and yet simultaneously continue polluting? All the while, their business models encourage and rely upon a system of endless consumption and economic growth.”

Do companies and policy makers (intentionally or unintentionally) abuse and misuse the principles of Circular Economy for greenwashing? Why do companies say they are committed to tackle the environmental crisis they helped create, but keep investing in the wrong “solutions”, under the cloak of the current Circular Economy hype?

Riding on the back of the current circular economy hype, many companies say they are committed to tackle the environmental crisis they helped create, but they keep investing in the wrong “solutions”, hoping only that big business can continue to flourish, fueled by new opportunities and expanding markets. 

Therefore, it’s important to emphasize the core principles of a circular economy, such as the protection of the environment, the reduction of waste and emissions of greenhouse gases as well as positive society-wide benefits.

Find out more about the difference between Circular Economy and Sustainability, the risks of the current Circular Economy conceptions, a better approach to a circular economy and ways to employ the principles of circular systems for a green transition.

This was Part I of the Rethink Circular Economy series, read on Part II: Rethinking Circular Economy – What’s the difference between Circular Economy and Sustainability?.

By Stefan Simon for Collective Green