Circular economy

[2][3][4] The concept aims to tackle global challenges such as climate change, biodiversity loss, waste, and pollution by emphasizing the design-based implementation of the three base principles of the model.

[13] By implementing circular economy strategies in five sectors alone: cement, aluminum, steel, plastics, and food 9.3 billion metric tons of CO2 equivalent (equal to all current emissions from transportation), can be reduced.

[18][19] The implementation of circular economy principles often requires new visions and strategies and a fundamental redesign of product concepts, service offerings, and channels towards long-life solutions, resulting in the so-called 'circular business models'.

[22][23] For example, in China, CE is promoted as a top-down national political objective, meanwhile in other areas, such as the European Union, Japan, and the USA, it is a tool to design bottom-up environmental and waste management policies.

[24] A comprehensive definition could be: "Circular economy is an economic system that targets zero waste and pollution throughout materials lifecycles, from environment extraction to industrial transformation, and final consumers, applying to all involved ecosystems.

It employs reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system, reducing the use of resource inputs and the creation of waste, pollution, and carbon emissions.

[39] Boulding describes the so-called "cowboy economy" as an open system in which the natural environment is typically perceived as limitless: no limit exists on the capacity of the outside to supply or receive energy and material flows.

When implemented in bad faith, touted "Circular Economy" activities can often be little more than reputation and impression management for public relations purposes by large corporations and other vested interests; constituting a new form of greenwashing.

[13] By 2050, 9.3 billion metric tons ofCO2 equivalent, or almost half of the global greenhouse gas emissions from the production of goods, might be reduced by implementing circular economy strategies in only five significant industries: cement, aluminum, steel, plastics, and food.

[33] The contemporary understanding of the circular economy and its practical applications to economic systems has evolved, incorporating different features and contributions from a variety of concepts sharing the idea of closed loops.

At the time still called 'preventive environmental management', his follow-on book Material Concerns: Pollution, Profit and Quality of Life[65] synthesized these findings into a manifesto for change, moving industrial production away from an extractive linear system towards a more circular economy.

[68] The Ellen MacArthur Foundation has more recently outlined the economic opportunity of a circular economy, bringing together complementary schools of thought in an attempt to create a coherent framework, thus giving the concept a wide exposure and appeal.

[69] Most frequently described as a framework for thinking, its supporters claim it is a coherent model that has value as part of a response to the end of the era of cheap oil and materials and, moreover, contributes to the transition to a low-carbon economy.

The report, commissioned by the Ellen MacArthur Foundation and developed by McKinsey & Company, was the first volume of its kind[77][78] to consider the economic and business opportunity for the transition to a restorative, circular model.

It argues that a subset of the EU manufacturing sector could realize net materials cost savings worth up to $630 billion annually towards 2025—stimulating economic activity in the areas of product development, remanufacturing and refurbishment.

[79] This is supported by a case study from the automotive industry,[80] highlighting the importance of integrating a circular model holistically within the entire value chain of a company, taking into account the interdependencies between the product, process, and system level.

[citation needed] Another report by WRAP and the Green Alliance (called "Employment and the circular economy: job creation in a more resource efficient Britain"), done in 2015 has examined different public policy scenarios to 2030.

[99] One study suggests that "a mandatory certification scheme for recyclers of electronic waste, in or out of Europe, would help to incentivize high-quality treatment processes and efficient material recovery".

[120][121] PACE is a coalition of CEOs and Ministers—including the leaders of global corporations like IKEA, Coca-Cola, Alphabet Inc., and DSM, governmental partners and development institutions from Denmark, The Netherlands, Finland, Rwanda, UAE, China, and beyond.

Each phase is supported by frameworks and concepts popular in management consulting—like idea tree, value chain, VRIE, Porter's five forces, PEST, SWOT,[141] strategic clock, or the internationalization matrix—all adapted through a CE lens, hence revealing new sets of questions and considerations.

[80] There are also incentives for carmakers to do so as a 2016 report by Accenture stated that the circular economy could redefine competitiveness in the automotive sector in terms of price, quality, and convenience and could double revenue by 2030 and lower the cost base by up to fourteen percent.

In addition, logistic companies can enable a connection to a circular economy by providing customers incentives to reduce costs through shipment and route optimization, as well as, offering services such as prepaid shipping labels, smart packaging, and take-back options.

[174] Several statistics have indicated that there will be an increase in freight transport worldwide, which will affect the environmental impacts of the global warming potential causing a challenge to the logistics industry.

[173] There has been widespread adoption of circular economic models in agriculture which is essential to global food security and to help mitigate against climate change, however there are also potential risks to human and environmental health from contaminants remaining in recycled water or organic material.

While this is a necessary first step, global smart grid technologist, Steve Hoy, believes that in order to create a circular economy we should adapt the concept of 'True Zero' as opposed to 'net zero', which is eliminating fossil fuel consumption entirely so that all energy is produced from renewable sources.

[citation needed] A study considers producer/manufacturer responsibility "a practical approach toward addressing the issue of plastic pollution", suggesting that "Existing and adopted policies, legislations, regulations, and initiatives at global, regional, and national level play a vital role".

[215][216] A study using Project Drawdown's modeling framework indicates that, even without considering costs or bottlenecks of expansion of renewable energy generation, metal recycling can lead to significant climate change mitigation.

To draw the attention of policymakers and other stakeholders to this loophole, the Ecothis, an EU campaign was launched raising awareness about the economic and environmental consequences of not including eco-design as part of the circular economy package.

The advantage here is that it gives a general view of how countries work towards circular development and how they compare to each other but the main drawback is that, as mentioned in the article, the seven metrics all have equal weight and importance in Politico's calculations, which is not the case in real life.

[282] Korhonen, Nuur, Feldmann, and Birkie (2018) argued that "the basic assumptions concerning the values, societal structures, cultures, underlying world-views and the paradigmatic potential of CE remain largely unexplored".