This approach must be understood in opposition to that of linear economics. These are two different models when it comes to assessing everything related to the economy: obtaining raw materials, manufacturing products, eliminating waste, business profits and the role of consumers.
General scheme of the linear economy
If we take a specific consumer good as a reference, it normally presents a linear process. Thus, first some raw materials are extracted, then these materials are modified or refined, later a product is manufactured in an industrial way and, finally, the product is purchased by a consumer.
The process does not end here, since the consumer stops using the purchased product, which becomes a waste. This system is like a line with a beginning and an end.
The linear economy is based on two great principles:
1) permanent economic growth and consequent environmental deterioration and
2) constant consumption.
This model is not the only one possible and, in fact, the circular economy is presented as an alternative.
General outline of the circular economy
If we take a product as a reference (for example, a vehicle, a mobile, a pants or a computer) the application of this proposal would be the following:
1) the consumer does not part with the product that he acquired when he decides to buy a new one, but repairs the product (for example, by introducing a new chip or any other update),
2) as a consequence of point number 1 less waste is produced and, on the other hand, the manufacturing company does not have to manufacture more products and therefore money is saved in production,
3) As a consequence of point number 2, the manufacturing company does not need to obtain so many raw materials and
4) If the product can be repaired, the cost of repairing is less than buying a new one.
The model described above is less polluting than the linear one, it generates economic benefits from innovation and does not imply an increase in prices for the final consumer.
It is a circular economy because the waste that is generated is not totally eliminated but is returned to the production process to make new products or for other purposes.
The proposal for a circular economy is currently in an incipient stage. In any case, it is a system that can be applied to all types of business sectors. For many economists, the circular economy could be a solution to curb pollution on the planet.
Photos: Fotolia - dukesn / popaukropa
