Circular economy: definition and example

Since the industrial revolution, production and consumption patterns have been based on abundant and readily available natural resources. However, this familiar pattern of a linear economy does not fit the realities of the 21st century. In this article, we examine how the modern circular economy model helps to take care of the environment. We will also answer the following questions: what is the idea behind the circular economy? How can you participate in the circular economy?

The circular economy aims to conserve resources and reduce environmental impact, as well as increase efficiency at all stages of product manufacturing.

How do we define the circular economy?

There are different formulations of the definition of the circular economy. We will look at a few of them.

Circular economy: simple definition

In simple terms, the circular economy is an alternative to the traditional linear economy (extraction, use, disposal). In other words, the circular economy aims to manage resources in a smart and efficient way. The basic idea is to make products with the simplest possible design, avoiding unnecessary parts and toxic substances. This makes the product easier to recycle or recover for later use, instead of disposing of it directly.

Circular economy: official definition

The circular economy has been defined by the United Nations as follows: "The circular economy is a system of production, exchange and sharing that enables social progress, preservation of natural capital and economic development as defined by the Gro Harlem Report. Its ultimate goal is to decouple economic growth from the depletion of natural resources by creating innovative products, services, economic models and public policies that take into account all flows throughout the life of the product or service. This model is based on the optimal use of resources and the creation of positive value loops. In particular, it emphasizes new modes of design, production and consumption, extending the useful life of products, reuse and recycling of components." As far as France is concerned, ADEME also offers its definition of the circular economy: "The circular economy is an economic system of exchange and production which, at all stages of the product life cycle (goods and services), aims to increase the efficiency of resource use and reduce the impact on the environment while developing the well-being of individuals. " (source). We can conclude from these two definitions that the circular economy is in fact the operational stage of a generalized sustainable development policy. All social, economic and environmental issues that arise from current production and consumption patterns are taken into account in the loops.  

Who created the circular economy?

The circular flow for materials and energy was first discussed by Kenneth E. Boulding in his book published in 1966. In it, he outlined the idea that we should adopt a "circular" production system. It is amazing how, in his concise book, he managed to lay out all the basic principles on which the modern notion of a circular economy is based today. However, it took a long time for these principles to take root in society as a necessary approach to the economy, resources and the environment. Later authors have contributed greatly to the development of the concept, but they expand on Boulding's ideas in these areas rather than adding to them in any substantial way. However, the term "circular economy" itself first appeared in 1990 in Pearce and Turner's book The Economics of Natural Resources. In their work, Pearce and Turner contrast natural (circular) systems with economic (linear) systems. Boulding's idea that our vessel, the planet Earth, should be viewed as a closed economic system is also highlighted in their work. These ideas have prompted other authors to consider recycling as a central process in a circular economy.  

Circular economy diagram

The circular economy is composed of the following 5 positive value loops:

• Products should be designed as simply as possible, both in manufacturing and in use ;
• Products must be repairable and have a maintenance plan;
• Their uses should be maximized through reuse or sharing;
• Product subsystems should be disassembled for reuse;
• Components that can no longer be refurbished should be recycled whenever possible.

source

What are the 7 pillars of the circular economy?

Take a closer look at the circular economy diagram, which presents its three main ideas. The circular economy is based on 3 areas of action:

• Waste management;
• The offer of the economic actors;
• Consumer demand and behavior.

  The 3 fields of action of the circular economy are further divided into 7 pillars:

• Sustainable supply;
• Eco-design;
• Industrial and territorial ecology;
• Product-service systems;
• Responsible consumption;
• Extending the period of use ;
• Recycling.

  The circular economy also has a societal vocation of job creation. Also according to ADEME, jobs related to the implementation of the circular economy are estimated at 800,000 full-time equivalent jobs. By 2030, an increase of 300,000 jobs in this sector is expected.  

What are the 4 stages of the circular economy?

  According to The Circularity Gap, which is presented annually at the World Economic Forum in Davos, only 9% of materials in the global economy are recycled. The Circularity Gap has formulated "4 actions to close the gap" for this problem and the plan to universally transition to a circular economy:

• Translate global trends into national, regional and commercial pathways. This will allow nation-states, regions, cities, industries and businesses to formulate practical strategies tailored to local context, incentives, markets and mandates.
• Develop decision parameters and a measurement framework. This will encourage target setting, assessments, and peer review, which in turn will be used to benchmark performance and track progress against longer-term global ambitions such as the Paris Goals and the SDGs.
• Facilitate peer-to-peer learning and knowledge transfer. This will accelerate the international dissemination of effective circular economy policies and practices, fostering a collaborative ethic that helps to better understand and accelerate adoption.
• Build a global coalition for action that is simultaneously diverse and inclusive. This coalition will bring together leading businesses, governments, NGOs, and academics to collectively build capacity and expertise to better and more sustainably meet society's needs.

 

Why do the circular economy ?

  The circular economy addresses actors at all stages of a product's life cycle. Eco-design is one of the fundamental pillars of the circular economy and is aimed at economic actors. That is, the producers of goods or services. The fact of thinking, optimizing and revaluing a product in its entirety is a necessary step towards an economy that preserves the planet. In this context, eco-design allows to :

• Extend the lifetime of a product;
• Optimize the quantity and type of raw materials used;
• Anticipate the reuse of subsystems;
• Anticipate the recycling of what cannot be reused.

  Eco-design minimizes the impact of the product on the environment by taking into account its entire life cycle. All aspects of the product are taken into account: raw materials, manufacturing methods, use, life span, possible repairs or recycling, etc. The main objective of the circular economy is to do better with less natural resources, while reducing the amount of waste that can be generated. An eco-designed product is not intended to be simply destroyed at the end of its lifetime. It is intended to be deconstructed in order to reuse or revalue the maximum of its components. This is why the use of toxic components is to be avoided for an easier reuse.  

Linear economy vs. circular economy

As we wrote above, the circular economy is essentially an alternative to the classic linear economy. Let's take a closer look at the difference between these models using the example of "fast fashion".  

What is the principle of the linear economy?

The classic linear cycle consists of producing, using what is produced, and then destroying it. This model has been viable for decades because companies are obsessed with maximizing profits. Unfortunately, even with the development of the circular economy philosophy, much of the world lives by the laws of the linear economy. Goods are produced, used, and then sent to landfill or incinerated. The principle of the linear economy is that resources are given to us to use and benefit from "here-and-now", without having to think about the consequences of that production. Fast fashion is an excellent example of a linear economy. Fast fashion means frequent releases of collections that follow the trends of the famous designers' fashion shows. Fashion giants such as ZARA, H&M and SHEIN are symbols of fast fashion. Thanks to the rapid reappearance of trends and low prices, it has become possible to refresh one's wardrobe several times a season. This marketing ploy has created a new buying habit - being fashionable here and now. Clothes are no longer associated with something durable and high quality, but with a "single use" outfit.  

What are the consequences of the linear economy?

  The linear economy of fast fashion has a devastating impact on the environment. All the useless and worn out items (these appear quickly, because clothes are made of low quality materials), as well as unsold items are sent to landfills and incinerated in colossal quantities. All this leads to an increase of landfills and toxic emissions into the environment.  

What are the differences between the linear and circular economy?

As it evolves and diversifies, the industrial economy strictly follows its main characteristic: the linear model of resource consumption "take - make - waste". The circular economy, on the other hand, is about preserving natural resources and reducing negative environmental impacts "reduce-reuse-recycle" with reference to the 3Rs rule. In fashion, the difference between the linear economy and the circular economy depends largely on the designers. They are the ones who decide whether to create objects with quality materials and relevant designs for the next few years, or to start a new trend that will "die" in one season. Due to global concerns about environmental issues in the light industry, the following guidelines have been formulated. The transition of the fashion industry from a linear economy to a circular economy involves:

• Production of garments with minimal environmental damage;
• Maximum use of clothing by the consumer with the possibility of reuse;
• Minimal waste production;
• Return of raw materials to the production cycle for reuse through recycling.

 

Circular economy and building

A revolution is taking place in the construction sector in France. In 2020, France moved to RE 2020 environmental standards, which are more stringent for the construction sector. In France, the construction sector accounts for 44% of energy consumption and nearly 25% of CO2 emissions. It is worth noting that France started greening the sector over 10 years ago. In 2008, the EU published a framework directive on waste management. This is a necessary measure that applies to buildings in particular. As far as buildings are concerned, the majority of waste is generated by demolition - 65%. However, 28% is for renovation and only 7% for new construction. This directive sets the recycling and recovery target at 70%. What specific measures are applied in the construction sector to implement the circular economy? First of all, waste sorting. Depending on the site and its location, waste is either sorted on site or transported to treatment centers. In doing so, the construction company must ensure that the entire waste management process is transparent. The aim is to reuse recyclable materials as much as possible. This circular economy approach for buildings reduces carbon emissions, the main cause of climate change.  

AFNOR and the circular economy

AFNOR is the French association for standardization. It was created in 1926 and is placed under the authority of the Ministry of Industry. As part of its activities, AFNOR developed the experimental standard XP X30-901, which contains recommendations for managing closed-loop economy projects. This standard was published in 2018 as part of the overall resource and waste management policy. AFNOR standardization objectives: "From a European and international point of view, standardization should focus on terminology, waste characterization, product lifetime and even reuse. And this should be done in the presence of all stakeholders: local authorities, consumer or public associations, even NGOs, manufacturers, service companies, ecodesign agencies, public institutions, etc. In this way, the XP X30-901 standard on the management of a closed-loop economy project can serve as a reference system used in other countries, and AFNOR is responsible for carrying the voice of French stakeholders. "  

Modern business models as an example of circular economy

Around the world, many companies are already operating in a circular economy and showing high profit margins. There are five business models types for the circular economy:

• Circular Supply;
• Resource recovery;
• Product Life Extension;
• Sharing economy;
• Product as a Service.

  Circular supply - These models suggest the use of biobased, renewable, or recovered materials instead of virgin raw materials. Resource Recovery - A model that uses innovation and technological opportunities to recover and reuse resources. Closed loop recycling, where waste is recycled into new resources, is an example. Product Life Extension - Product life extension is a model that, through refurbishing, repairing, upgrading, or remarketing products, retains economic benefit for as long as possible. This model also involves a shift from selling goods to selling services for their use. Sharing economy - Sharing platforms / collaborative consumption - a model that relies on the exchange of goods or assets with low usage rates. Product as a Service - A model in which customers use products by "renting" them and paying for them when they are used.  

The circular economy in France

France has the second highest number of circular economy patents in Europe. The largest circular economy project in France has been launched by Renault. The Renault Group has announced the transformation of its Flins production site into Refactory, Europe's first circular economy plant specializing in CO2 negative mobility by 2030. The plant's main objective will be to recover used cars. But this is only one aspect of the transition to a circular economy. The plant will also include facilities for recycling car parts as well as a dedicated energy center (second-life batteries, hydrogen fuel cells). In addition, innovation and research in the field of the circular economy will be one of the main focuses of the plant.

Circular economy label

The ADEME (French Environment and Energy Management Agency) has developed a reference framework that helps each local authority define its strategy and action plan for the circular economy. By complying with the characteristics indicated in the scheme, each local authority can obtain an ecolabel. Receiving the label means that you value your commitment to implementing a circular economy policy in your area! Who gives the label? The National Labeling Commission, established by a national strategic committee, brings together 7 independent experts. Thus, the commission examines the controls carried out and awards the label. It was .

INEC circular economy

In Europe, there have long been organizations dedicated to promoting and supporting the life cycle economy. One of these organizations is INEC. The National Institute for the Circular Economy, founded in 2013 by François-Michel Lambert, deputy of Bouches du Rhône. The institute formulates its activities as follows: "The multilateral organization is composed of more than 200 members, public and private organizations: companies, federations, communities, institutions, associations, NGOs and universities. The diversity of these actors allows us to develop a holistic vision of the circular economy, taking into account all economic, social and environmental concerns." INEC's objective is threefold:

• Pooling skills and resources;
• To promote and intensify research, experimentation and concrete achievements;
• To change laws and regulations.

  During its existence, the institute has accomplished a number of important missions for the environment. They were the first, in partnership with the French Environment and Energy Management Agency, to organize conferences on the circular economy in Paris in 2014. In 2017, they formed a bill in favor of the circular economy. They implemented a "circular school" program for public procurement. In 2021, INEC published the study "Pivoting towards circular industry. Which models?. How to accelerate?" which identifies the main business models of the circular economy and their benefits.  

Circular Economy House

Another association that contributes to the development of the circular economy is the Circular Economy House. The founders wanted to create a place where like-minded participants could come together. Thus, among the association's initiatives are:

• Car building ( LaBricc ) ;
• Codenomics (Atelier Soudé);
• Vermicomposting and recycling (Eisenia);
• Waste control (Zero Waste Lyon);
• Short-circuiting food production/consumption (Alterconso) ;
• Donation (Boite à partage) ;
• Water cycle (Coordination of the water resources commons).

  And the project continues to grow, attracting new members who share the values of eco-design, pooling of needs, preference of use over ownership, responsible and collaborative consumption, extending the life of products, recycling, etc.  

Veolia and the circular economy

Veolia develops and implements useful and concrete solutions for water, waste and energy management that help make a radical difference. "Veolia's ambition is to become a benchmark company in environmental transformation. Through three complementary activities, Veolia promotes access to resources, conservation of existing resources and renewal. The company has three business areas: water, recycling and energy. Veolia's results are impressive. In 2020, the Veolia group provided drinking water to 95 million people and sanitation to 62 million people, produced nearly 43 million megawatt hours and recycled 47 million tons of waste. Veolia Environnement (Paris Euronext: VIE) had consolidated revenue of 26 billion euros in 2020."source

Circular Economy Law France

  The work of the Citizens' Convention on Climate has resulted in a Climate and Resilience Law that combats climate change and strengthens resilience to its effects, enacted and published in the Journal Officiel on August 22, 2021. This law inscribes ecology in our society: in our public services, in the education of our children, in our urban planning, in our travel, in our consumption patterns, in our justice. "We are now bringing ecology into the lives of the French. With more than 305 articles and a scope of action that affects all areas of daily life, from consumption to housing and travel, this is the biggest environmental law of the five-year term. … The Ministry of Ecological Transition will be there to implement all the measures provided for in the text as soon as possible. "- Barbara Pompili   How will these measures affect daily life? The most notable to us are:

• Controlling the energy intensity of housing;
• Creating car-free zones;
• Stopping the sale of cars emitting more than 95 g of CO2/km in 2030;
• Reducing domestic air travel if it can be replaced by rail;
• Introduction of vegetarian menus in public and university canteens;
• Emphasis on educating citizens about sustainable development;
• Introduction of environmental labelling to monitor and communicate to consumers the environmental impact of a product;
• Regulation of illuminated advertising by mayors.

  To discover: 2 laws to know about the fight against climate change:  

• The climate and resilience law
• Anti-waste law for a circular economy

 

You now know everything about the circular economy

The linear economic model that has brought material comfort to millions of people on earth over the last century is coming to an end. There is now an urgent need to rethink economic flows to ensure the joint and prosperous development of natural resources and human societies. https://youtu.be/evjGT35-4LU The circular economy has the will to transform this system of impact reduction into a system of value creation that will be socially, economically and environmentally positive. A preventive solution is typically the eco-design of a product. The circular economy is one of the major challenges of tomorrow to meet the societal and demographic challenge on a global scale. For economic actors, eco-design is the main commitment to be part of the change.

Now you know all about eco-designed products

To find out more, take a look at the following articles:

‣ Circular economy: definition and example ‣ Ecology: definition and example ‣ Becoming eco-responsible: approach, gestures and examples ‣ Eco-responsible and ecological product: definition and example ‣ Ecological footprint: definition and example