Why Do We Need The Circular Economy?

12-02-2020

3 min 🕐

These days we often hear about the Circular Economy and its importance. We read how harmful plastic straws are to the oceans and about a new sustainable brand of sneakers making waves in the market. But is the need to adopt circularity truly so pressing or is it a topic which will be forgotten soon? Do we really need the Circular Economy and if we do, why?

Let’s find it out.

The way most of our economic systems are operating now is Linear. We have previously already explained how the Linear and Circular Economies work in this blog. For decades, the Linear Economy has been the status-quo: more and more people worldwide have gained access to potable water, basic goods, education and the labour market. What is the issue then? The increasing population. It has been steadily growing and the resources which were enough for 3–4 billion people are not and will not be enough for 8.6 billion — which is the predicted world population by 2030).

In essence, the Linear Economy is based on the following pillars: affordable materials and cheap energy to produce goods and cheap credit for consumers. However, these days all of these aspects are up for questioning. The reasons why Linear Economy is not working well are:

  • The Increasing Price Of Materials and Energy: Natural resources — fossil fuels, food and water — are increasingly difficult and more costly to extract. Thus, it gets much harder to satisfy the growing need for these resources.
  • Biodiversity and Ecological Issues: The overuse of materials and energy leads to serious biodiversity problems. We have taken the ecological resources provided by the natural world for granted. However, most indicators point towards biodiversity declining all over the planet. We seem to have forgotten how crucial nature is to the survival of both the social and economic systems.

Circumstances have changed, and so must our economy.

  • A New Wave of Customers: According to the McKinsey Global Institute, 3 billion new consumers will enter the market in the next 20–30 years. And they will wish to have many of the same things that we enjoy at the moment: fashionable clothes, brand-new cars, trips overseas, state-of-the-art mobile devices. So the question is: how do we satisfy those cravings with a resource base which is already under pressure? Is it possible to serve these people’s needs if we continue along with our current, linear ways?

The answer is simple — NO.

Why Circular Economy?

Overall, the main reason why we need the Circular Economy is that the current system is no longer feasible for anyone — neither for businesses nor for people or the environment. The Linear Economy is outdated and needs to be replaced.

The Circular Economy, in its turn, offers a new approach, a new way to design, make and use resources within planetary boundaries, a way which is sustainable and beneficial for all. At its heart, the Circular Economy takes inspiration from natural systems. It aims at minimising waste and making the most of resources.

The Circular Economy offers a way to satisfy the needs of the increasing population with a decreasing amount of resources.

To read more in-depth about what the Circular Economy entails, what its benefits are and how anyone can contribute to it, follow the Ellen MacArthur Foundation page. We express our gratitude to them for the valuable information, insightful graphics, data presentation and for their efforts in educating the world about Circular Economies and the need for them.