Understanding Circular Economy


As the public calls for sweeping reform in how we as society produce and consumer goods, one clear answer emerges-building a circular economy. The circular economy is the conscious design and use of resources which allows for maximum sustainability, the antithesis of our current linear economy where we produce, buy, and dispose. The core principles of the circular economy revolve around reduction, reuse, and recycling.

The way our current economies are structured is destroying the planet. We design products with planned obsolescence to encourage turnover. Think about fast fashion or even your phone–it’s not a coincidence that your clothes fall apart after a few washes and that you feel the need to upgrade your phone every year or two. Producers design things that won’t last, so you’ll purchase more.

The circular economy wants to change all that. The idea is to design products and product life cycle systems which minimize and eliminate waste while allowing for the reuse and recycling of a product when it can no longer be used. For all you visual learners, here is a quick video to help explain:

Back from the video? Good. Now, here are the principles of the circular economy.

When producing new products (or buying products for that matter) products that contribute to a circular economy follow these principles.

Biodegradable materials. It sounds like a no-brainer, but producers are not using as many biodegradable materials as they should. Circular economies build this core value into the manufacturing process ensuring that products at the end of their life cycles can return to the Earth in a safe and natural way.

Renewable energy. It’s not just about the materials you use to manufacture products. The supply chain and manufacturing process should rely exclusively on renewable energy ensuring that the energy needed to produce a product does not hurt the environment and isn’t wasted.

Reuse waste. If it isn’t biodegradable, it needs to be reused. It is critical in the circular economy that nothing is wasted and that non-biodegradable elements are reused in the next generation of products.

Repair. If it ain’t broke, don’t fix it. But if it is, then fix it. Things break down all the time but instead of throwing them immediately in the dump, we should fix them.

Eco-design. This incorporates all the elements above. From day one, a product should be designed with a thorough consideration of its environmental impact pre-and post-life cycle.

Rethink ownership. One of the main aspects of the circular economy is changing the structure of how we use durable products like washing machines and computers. Instead of being owners of our devices, we would lease, license, or share them and be users under the agreement that at the end of a product’s life, it will be returned and disassembled. Reusable parts would then be incorporated in the next generation of devices.


Check out this diagram to see the principles of circular economy in action

circular economy diagram

What’s next

In order for the circular economy to succeed, it requires a substantial change in the way we do things. Manufacturers and consumers need to rethink their behavior for it to work. Producers need to recognize that resources should not be exploited but used responsibly. Consumers need to advocate and support products and systems that practice circular economy principles. For more information about the circular economy including case studies, check out the Ellen MacArthur Foundation.

Baldwin Tong Impact Hub Vienna
Baldwin Tong A writer who wears many hats, mostly metaphorical ones.