The Circular Economy – Exponential vision or Simple Recycling?

On the December 2nd, 2015 the European Commission came out with a legislative package called “Closing the loop”, essentially a revision of an already existing package “Towards a Circular Economy” published last year. It was initially withdrawn due to wide criticism for its low aspirations. It is intended to be the core portion of the transition towards a sustainable economy, based on innovation, growth and resource efficiency due to the alleged limitations of the proposal. The factors that triggered it were a growing concern over commodities price shocks experienced from the outset of the decade: EU’s net import of resources, land grabbing and an alarming expectation of nine billion inhabitants by 2050. In essence these factors could put pressure on both the social welfare and the net trade accounts within the EU. At the same time, the foundations of EU’s economic order continued to be on the auspices of neo-liberal economics, which foregoes the effects of perpetual production without a thought of how to dispose of the used products. If the circular economy is an answer, then why would we would need a better understanding of what it actually is?

You would probably say recycling and largely, this would be the identifiable truth, as only a 100% recycling rate could decouple economic growth from resource dependency. However, some of the countries closest to such a rate, e.g. Sweden, Switzerland, Denmark, Netherlands, often have a ban on land-filling combined with high rates of incineration for heating purposes, resulting in harms for the environment. That is only part of the story, as the Circular Economy can be viewed as a social and economic model that interpolates different spheres of life. For if we view human life itself from the perspective of a Circular Economy, we would need less and more durable units, or a population decline and life expectancy growth. Another radical interpretation would include the completely sustainable energy empowerment of the model. In essence, however, the Circular Economy consists of two big flows of resources – biological and non-biological, which are intended to stay in the economy through various means.

Circular economyIdeally, a Circular Economy would consist of a 100% flow of secondary resources, aimed by stimulus for reducing cradle to the grave disposal of food, appliances (and even carcasses, which can then be used in the cosmetics industry). This would mean that first of all, already in the conceptualization phase, products must be designed for being easily repairable, upgradable and convertible to avert the recycling phase. A good example lies in Fairphone, produced from old phones from the developing world to create a modular device, whose parts can be replaced by anyone. The Circular Economy is thus interlacing not only customer awareness, but also sensitivity to equity and justice beyond their environmental dimensions. On a wider scope, the concept goes into minimizing resource losses in industry by catering for heat, steam and secondary resource exchange between industries. This symbiosis was the main driving engine in China’s distinctive top-down approach towards creating a sustainable industry park. Beyond industries and cities, a Circular Economy would include a full government-driven distribution of responsibilities between producers and customers, driven by policies and taxation oriented towards resource use as is the case in Japan. In the Far East the conceptualization went on towards societal organization and a leasing-based society, where the ownership of resources would remain in the customer, thus allowing the producer to handle any repairing, refurbishing or rebuffing activities with care.

As one could expect, the societal transformations for the realization of this concept are immense. On one hand we need the involvement of traditional media as the best intermediary towards preparing the citizenry for the costs and benefits of such a transition. Secondly, by means of stronger regionalization, we would need local authorities to begin planning how to adapt the urban environment. Thirdly, only a proper flexibility of instruments and involvement of private actors would be able to imbue their work.

The EU already has at its disposal a powerful instrument in the face of the EFSI, whose aims to support renewable, efficiency and innovation are compliant with the Circular Economy. However, the overarching stigma of a lack of visibility of EU is present here too, as only a limited number of advanced enterprises or local authorities, which have established information channels would benefit from the fresh capital. Another significant challenge would be the involvement of atypical communities, such as those of entrepreneurs, facilitators of technical knowledge, designers, etc. which would be our enabling agents and would definitely help EU achieve its job creation targets.

The questions is are we ready for such a change or we are moving to Earth 2.0[1]?


[1] In 2015 it was confirmed that Earth 2.0 (or Kepler-452 of the Cygnus constellation) does exist. However, the light in the tunnel is 1400 light years ahead and we must first deal with our own planet.


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