Designing a Circular Economy. Is recycling the solution?
Updated: Jan 4
Carola Caffarena. Chemical engineer specialized in environment and wastewater treatment. Passionate about traveling, reading, jazz, and aiming for sustainability as an all-rounder.
The global population is expected to reach close to 9 billion people by 2030 – inclusive of 3 billion new middle-class consumers. In a business-as-usual scenario, the natural resources will be endangered due to the growing consumer demand (1).
The Fourth Industrial Revolution landed with innovative business concepts based on providing services instead of products, switching from consumers to users, impacting both production and consumption in an unprecedented digital and borderless era. In parallel to it, the conventional linear production model has provoked a growing unbalanced situation with the scarcity of natural resources and excess of wastes. This has led to rethinking production schemas towards a circular model that guarantees health and environmentally safe products with a longer lifecycle that are integrated back in the dynamic loop after its use, zero wastes production, minimized yet more efficient use of environmentally friendly resources, elimination of ecological footprint and environmental benefits, while at the same time maintaining economical profitability and balance between user and producer.
What is a circular economy?
The circular economy is a regenerative approach to shift to a new business concept and transform the up-to-date production and consumption habits, a model based on zero waste policy and keeping all resources at their highest value flowing continuously between producers and users. A system with a positive environmental impact, huge innovation possibilities, and high economic activity (2) estimated in a trillion-dollar (1).
“A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems”
According to the Ellen MacArthur Foundation, the circular economy is based on three principles (3):
Design out waste and pollution: promote eco-effectiveness of systems and processes (4) and utilize new materials and technologies to ensure wastes and pollution are not by-produced and to facilitate the conversion of wastes into resources; Design out waste and pollution: 促进经济过程的生态效益，利用新材料、新技术以保证不产生废物与污染，促使废物转化为资源
Keep products and materials in use: optimize resources performance promoting the circular flow of products and materials in order to keep them in their highest value while being repaired, reused, and remanufactured; Keep products and materials in use: 优化资源的效益，促进产品和材料的循环流动，在维修、再制造的过程中发挥其最大价值
Regenerate natural systems: enhance the natural resources by controlling and preserving the finite sources and balancing the renewables ones, adopting more efficient technologies (5, 6). Regenerate natural systems: 控制资源的开采、促进可再生能源的发展、使用更有效的技术以保护自然资源
In China, this concept is regulated by the Circular Economy Promotion Law of the People’s Republic of China from 2008 amended in 2018. China was one of the first countries in the world to legislate the circular economy. Since 2002 the Asian country is promoting and including it in its agenda.
The benefits of a new system
Compared with China’s current linear model, a circular design could save businesses and households approximately CNY 32 trillion in 2030 and CNY 70 trillion in 2040 in spending on high-quality products and services. These savings, equivalent to around 14% and 16% of China’s projected GDP in 2030 and 2040 respectively, could raise Chinese lifestyle standards. Applying a circular economy also reduces the environmental impacts of this lifestyle (7).
In a digitalized world the economic benefits of employing a circular economic model in the electronics and electrical sector could reduce the costs for consumers by 7% by 2030 and 14% by 2040 (8).
Adding value to the supply chain and creating jobs
The current worldwide scarcity of resources and an excessive amount of waste demands a system that adds value to the supply chain, keeps materials flowing, in contrast with the linear economy. A circular economy places recycling as the last alternative and prioritizes activities based on reduction, reparation and maintenance, reuse, and refurbishment or remanufacture, which also represents an opportunity for promoting social relationships between service providers and users and opens the door to new specialized jobs, while recycling focuses more on low qualified jobs. Walter R. Stahel, the godfather of the modern circular economy, introduced the metric of labor input-per-weight ratio (man-hour-per-kg, or mg/kg) to measure job creation in relation to resource consumption. He found that the ratio of mg/kg when building a remanufactured engine from used resources compared to making the same engine from virgin materials is 270:1. The impact on employment is huge (9).
当下的世界，资源匮乏的同时垃圾过量。这要求一个能够促进物料使用、为供应链增值的系统。循环经济将回收置于最末项。优先级从高到低依次是：减量，维修和保养，重用，翻新，最后是回收。这些过程也提供了机会来建立起服务人员和用户之间的社会关系，也提供了新的工作机会（相比之下回收只是专注于低端的分拣工作）Walter R. Stahel是现代循环经济的教父。他引入了一种劳动投入与产出重量比的度量方法（人·工时/每千克，或者mh/kg）来衡量资源再利用方面的新增工作机会。他发现，在制造一个发动机的时候，使用回收材料和使用原始材料制造，其mh/kg的比值是270：1。这对于就业的影响是巨大的。
A circular design proposed by the Ellen MacArthur Foundation (10) distinguishes between consumables and long-term elements. In this context, consumables are made of natural and renewable sources, are healthy, safe and through several cycles of use can go back to nature without harming it. The long-term elements originate from finite sources and need to extend their lifecycle through a cascade of preferred actions in order starting for reducing its use, maintaining it flowing by sharing and repairing, reusing it, further refurbishing or remanufacturing it and, as the final stage or option, recycling it to the initial state (11, 12). An example of long-term elements are those used in electronics which in the last phase end up as recyclable e-wastes that need to be recycled as their sources are limited, are very expensive to extract and its landfill disposal would expose them to risks. Even in some cases, recycled materials are not of sufficient quality for use in new electronic products. In China, there is a target for 20% recycled content in all new products by 2025. Another aspect of this design is that the energy used to power on must be of a natural and renewable source in accordance with the principles of a circular economy.
Recycling, is it all positive?
The circular economy aims to transform the conventional linear economy of take-make-dispose into a flowing positive loop redefining growth and waste (Weforum) and building economic, natural, and social capital (3).
During the end of the last century, recycling was seen as a solution to the growing environmental concerns and a way to get raw materials at a lower cost by reintroducing wastes in the process chain. However, the process of recycling waste is a less straightforward variant of a linear business model and involves additional economic and environmental disadvantages: recycling might not be inexpensive yet requires high investment costs and still results in revenue loss; from a technical point of view, it demands high water and energy consumption and generates additional pollution and wastes while products obtained from recycled material are usually of lower quality and have a short life cycle. Recycling is not an eco-effective process; moreover is not enough to meet current demands (13).
Creating new products in origin is very often cheaper and easier than making it out of waste. Moreover, many products are not recycled as the process itself is very complicated and energy-and-resources-intensive. In the conventional linear economy, waste collection and landfill disposal costs are minimized so that it is frequently a more attractive option in contrast with recycling. This is the case with many plastic wastes.
“Recycling is business-as-usual” (A. Lemille)
In the context of a circular economy that avoids waste generation and landfill disposal, it seems that recycling is not an eco-effective strategy. The recycling phase in a standard economy does not overcome the current problems yet displaces it to another stage of the whole process, even adding further disadvantages.
Circularity is key in the design and evolution of new business and systems as a “cradle to cradle®” approach to mirror the natural cycles and preserve and regenerate the natural capital. There is a need to rethink waste, transform our consumption schemas and circulate value. It is time to Reduce, Reuse, and be Responsible.
Through the Zero Waste Shanghai Consulting Services, we can help you improve your business transforming it into a circular model.
World Economic Forum
3.Ellen MacArthur Foundation, Circular Economy, Concept
4.Ellen MacArthur Foundation, News, Efficiency vs Effectiveness. October 9, 2012
5.Estrategia Gallega de Economía Circular 2019-2030. Xunta de Galicia
6.Ellen MacArthur Foundation, Circular Economy, What is a circular economy?
7.Morlet, A. et al. “The Circular Economy Opportunity for Urban and Industrial Innovation in China”, Ellen MacArthur Foundation, 2018.
8.World Economic Forum. "A New Circular Vision for Electronics Time for a Global Reboot."
9.A. Lemille. “For a true circular economy, we must redefine waste”. MakingIt, Number 26. Time to go circular. United Nations Industrial Development Organization UNIDO. October 2019.
10.Ellen MacArthur Foundation, Circular Economy, Concept, Infographic
11.World Economic Forum. "From linear to circular—Accelerating a proven concept”.
12.McDonough, W., Braungart, M., Cradle to Cradle: Remaking the Way We Make Things, New York: North Point Press, 2002