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The circular economy: an essential element of economic recovery

But for most individuals, the principle of the circular economy remains unclear. The collective thinking is fueled by the ongoing battle between environmentalists and businesses. Where one side wants to see the environment preserved and protected, while the other prioritizes profits. But in fact, the circular economy brings the two together, offering both economic and environmental gains.

For others, the circular economy is simply the move to zero waste or the transformation of waste into useful objects. However, this interpretation is incomplete and misses the most powerful aspects of the circular economy and its potential to transform the way our economy works.

Reconciling economic growth and the environment

According to the Ministry of Ecological Transition, the circular economy is an economic concept in the field of sustainable development, whose objective is to produce goods and services by limiting the use and waste of raw materials, water and energy sources. The concept revolves around the deployment of a new circular economy rather than a linear one, based on a “looping” principle with regard to products, services, waste, materials, water and energy.

The circular economy looks at all options in the production chain to use as few resources as possible initially, keep resources in circulation as long as possible, extract maximum value during their use, and then recover and regenerate products at the end of their life. This means designing products that last a long time and are repairable so that materials can be easily disassembled and recycled.

A solution for raw material scarcity and CO2 reduction

Raw material prices are soaring, and natural resources are not inexhaustible. Refurbishment and remanufacturing offer a solution to both challenges. According to Swiss architect Walter Stahel, who originated the concept of the circular economy, if a businessman suggests opening a manufacturing plant to make money, he should be told that he can make five times as much by opening a remanufacturing plant.

In addition, the circular economy could go a long way toward reducing carbon emissions. According to a report by the Carbon Trust, Innovate UK’s knowledge transfer network and Coventry University, remanufacturing typically uses 85% less energy than manufacturing and, globally, could offset more than 800,000 tons of CO2 emissions per year.

How to measure the benefits of a circular economy

The benefits of the transition to the circular economy can be evaluated at different levels. First of all at the global level, the circular economy allows to disconnect the growth of economic value from the consumption of raw materials and energy resources. It therefore generates fewer negative externalities and produces environmental benefits. Then, at the local level, it allows the relocation of certain production, offers new employment opportunities and improves the balance of trade. Finally, as far as companies are concerned, it is a source of numerous advantages as well as for consumers. For companies, it ensures access to resources and protects against price volatility or shortages of raw materials while creating new opportunities. For consumers, it enables a shift from use-based consumption to possession-based consumption, giving access to innovative services at low prices.

The development of the circular economy also requires the measurement of its effectiveness, both at the macro and micro levels. Therefore, making a statement about the circular economy requires the adoption of objective and reliable indicators. At the macroeconomic level, it allows to assess the relationship between GDP growth and domestic consumption of raw materials or greenhouse gas emissions. Some countries are leading the way, such as Denmark with the port city of Kalundborg, while others are committed to improvement, such as China, which introduced a circularity indicator in its latest national five-year plan.

But the circular economy is not simply a matter of adding up individual good practices. Value chain integration and cooperation between different stakeholders are essential to develop systemic responses to the challenges of the 21st century. These pillars cannot and should not be considered independently of each other. For example, eco-design and industrial ecology make a significant contribution to extending the life of products and to recycling. Similarly, sustainable sourcing and responsible consumption depend on the use of sustainable or recycled products. The development of the circular economy implies that political, civil and economic actors adopt reciprocal commitments that take into account the medium term and not only the immediate imperatives of the market.

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