Section 3.1: Business, the economy and sustainability
Section 3.2: Linear economy and the limits to linear consumption
Section 3.3: Changing business contexts and the imperative to act
Section 3.4: Closing the loop – towards a circular economy
Section 3.5: Circular economy in practice
3.5.1 Leakages from dispersed geographical distribution
3.5.2 Leakages from material complexity
Our long dependence upon the linear system has created lock-in mechanisms that make it difficult to break away from the way we have always done business. Four barriers, in particular, are relevant:
Implementing changes at a systems-wide level requires that all stakeholders along the supply chain and product cycle work consciously towards closing the loop. Because multiple players are involved and cycles tend to be fragmented and globally dispersed, incentives and objectives can be difficult to align.
The lack of “industrial-scale” reverse cycle markets for most materials severely limits the ability for businesses to source and secure quality controlled, reliable reverse cycled materials and components, in quantities sufficient to replace primary stocks.
Reverse cycled infrastructure and logistics
Reverse cycle infrastructure and logistic capabilities are essential to limit leakages from geographical dispersion of production and supply chains. But, these are costly to set up. At present, only highly integrated, large businesses have the geographical reach, capabilities and capital to do so.
Lack of Enablers
Enablers such as government regulation, transparency, subsidies, and funding are all needed to mobilize our production systems towards a closed loop model. It also requires companies to shift their business model to retain ownership over their products, and manage the shift in consumer preferences