Transitioning to a net-zero world

We must limit global warming to below 1.5 degrees Celsius and we all now have a responsibility to take immediate action. To achieve that, different industries carry different responsibilities and capabilities, but none should ignore this challenge. At least, the economic growth potential of the Circular Economy is estimated to be around 4.5 Trillion Dollars – opposed to a decreasing economy doing business as usual.

If we proactively address the changing landscape, we will be able to build a long-standing competitive advantage while playing a vital role in shaping a climate-safe global economy. 

What does Circular Economy have to do with it?

We use resources to ensure our wellbeing. Using in that sense mostly means desctruction of the resources that be­come harder to come by every day. Additionally, by ex­tracting, pro­cess­ing and using these resources, we produce plenty of green­house gases. We call this current eco­nomic syste­matic of 'take-make-use-dispose' the 'Linear Economy'. 

Therefore, the goal is to de­couple value creation from resource use and carbon emissions. The Circular Economy is a new and promi­sing approach to achieve that. It provides strate­gies for businesses to creating value by reducing, mini­mise or avoid value loss and de­struc­tion, such as pol­lution, emissions and other exter­nalities, through in­creased res­ource efficiency and produc­tivity. It is there­fore not sur­prising that the Circular Economy concept has started to attract serious atten­tion from businesses, policy makers, researchers and in­vestors who value this alter­native to more traditional approaches.

The Circular Economy rests on various circular strategies, each of which helps to keep eco­logical and econ­omical value of resources. This includes for example long life products or the con­tinuing use of materials through high-quality recycling. Among other things, the focus on services and the perfor­mance of products is part of many inno­vative business models which drive the success of those circular strategies, as do prevention of pollution and waste.

 

KNOWLEDGE NUGGET

The Circular Economy is a new and promising approach to resource management on macro, meso and micro level. That is, how nations, societies or companies create value from the resources at our disposal.

The core proposition of the Circular Economy is to move away from ‘take-make-use-dispose’ practices and replace them with strategies that enable resource preservation, efficiency and productivity.

Currently, there are many frameworks floating around about what Circular Economy might be - from the good old German 'Kreislaufwirtschaft' to the intuitive concept of 'Cradle to CradleTM' or the very prominent framework by the Ellen MacArthur Foundation. However, these frameworks can be seen as individual proposals of how a Circular Economy could operate through combining different strategies to cycle, loop or cascade resources.

Instead, the Circular Economy we talk about functions as an umbrella concept (first described by Jun. Prof. Dr. Fenna Blomsma). This means that it groups a wide range of waste and resource management frameworks and strategies (such as Cradle-to-CradleTM, Blue Economy or Industrial Symbiosis) and focusses the attention on their capacity to extend resource life, whilst generating value and preventing value loss and destruction.

The Circular Economy concept has long caught the attention of businesses, policy makers and academics. You will find the concept mentioned in many of the current European proposals that address not only our climate goals and the ways to get there, but also as a European competitive strategy. Having come so far is evidence that the Circular Economy has come to stay and businesses need to future proof their strategies and adapt to the circular future of the markets.

Reading recommendation

In these studies you will find information about the necessity, risks & opportunities of the Circular Economy. You can read them to familiarize yourself with the topic, or if you are searching for facts and data, e.g. to develop a presentation.