Section 3.4: Closing the loop – towards a circular economy

The circular economy represents a shift in beliefs of moving from a linear “take, make, and waste” model towards a more resource efficient and sustainable system. The circular economy is designed to “close the loop” on waste, and to be able to regenerate by intention. It replaces the assumption of disposability with that of restoration, and seeks to create value in ways other than consumption of resources.

Source: Based on Bob Doppelt, The Power of Unsustainable Thinking (2008) and Systems Conditions, The Natural Step

By mimicking the circular flows of natural regenerative processes, a circular economy promotes the efficient and effective flow of materials through optimized systems that allow wastes to be indefinitely recycled within the production and economic process, hence minimizing the need for costly virgin resource inputs.

In a circular model, waste is designed out functionally and systematically throughout a product’s life cycle and its component parts. In addition, the system adds a “functional service” to the process, in which manufacturers retain ownership of their products and sell the use of the product rather than the product itself. This shift in focus from product to its service means that manufacturers practice better resource husbandry and smarter management that benefit the producers and their customers. The operational flows of a circular economy are visualized by the diagram below

Source: Adapted from Ellen MacArthur Foundation Circular Economy Team

Explore the links below for an overview of the characteristics of the circular economy:

3.4.1 Designing out Wastes (DoW)

3.4.2 Resilience building through diversity

3.4.3 Shift towards renewable energy

3.4.4 Systems based thinking

3.4.5 Thinking in cascades

Supplementary Resources

Ellen MacArthur Foundation “Towards a circular economy: Business Rationale for an accelerate transition”

European Commission “The Circular Economy Strategy”

Ellen MacArthur Foundation “Building blocks of a circular economy”

McKinsey – Mapping the benefits of the circular economy

Circular Economy Switzerland

Australian Research Institute in Education for Sustainability “Sustainability in Supply Chains – Using systems thinking to work towards sustainability in corporations and their supply chains.”

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