RE-THINKING OUR ECONOMY: LEANING ON A CIRCULAR ECONOMY MODEL

Date: 11 January 2019

By the year 2050, world population is expected to reach almost 10 billion people according to research by the United Nations. In addition, it is projected that more people will join the middle class resultinginenhanced human wellbeing globally. Despite theseimprovements in socioeconomic and demographic developments and their associated benefits to individual prosperity, humans will have to exert furtherpressure on the limited and already depleting natural resources to keep the status quo. 

Additionally, calculations reveal that with the current way of global production and consumption patterns we already need 1.7 planet Earths and humans’ ecological footprint is only projected to increase. From these numbers,it becomes evident that society needs to find responsible and sustainable ways to meet individual needs, establish economic growth and secure the demands of future generations, all within the ecological boundaries of the planet. Thus, this requires us to rethink our current economic models. 

 

Sustainable Development Goal 12 for Responsible Consumption and Production

The urgency to reduce our ecological footprint through changing current production and consumption patterns is formulated in Sustainable Development Goal 12: Ensure Responsible Consumption and Production. SDG 12 is one of the 17 Sustainable Development Goals, which is a framework that can be considered as the world’s strategy to address the global economic, social and environmental challenges our planet is currently facing.

SDGs .:. Sustainable Development Knowledge PlatformWith the forecasts of a rising world population, an acceleration of global development and the related rising demand and usage of resources, SDG 12 underlines that business, as usual, is not an option for a sustainable future. More and more businesses have become aware of these sustainability issues and along with increasedsocietal pressure, corporations have started to explore alternative ways of doing business.

 

The pursuit of businesses towards more sustainable business practices and processes has led to the emergenceof new and innovative sustainable business practices and models, including the circular economy business model. 

 

Moving from a linear to a circular economy

The circular economy framework is an alternative to the common, traditional linear economy, and requires a shift from a ‘take, make and dispose’ economy, to a ‘reuse, redesign and regenerate’ production model. In this latter model, waste streams are considered as input for new products and processes. 

The circular economy model follows the following three principles:

  1. Design out of waste and pollution

  2. Keep products and materials in use

  3. Regenerate natural systems

 

economic model

Moreover, this economic model is a response to the worldwide growing waste streams and the increasing pressure on natural resources. By circulating resources again and again through closed loops, the maximum value of resources is extracted. 

 

Upcoming circular business models are turning trash into treasure

The circular economy model has been researched and praised already by many organisations in developing countries, especially within Europe. Nextto that, it has become part of various corporate strategies and has been adopted in numerous business models. 

Global sportswear company PUMA is one of the companies that has been experiencing with circular product lines a few years ago. They launched a certified Cradle-to-Cradle product line, which included a shoe, shirts, a jacket and a backpack. The shoe, for example, is entirely made from organic cotton, linen and bioplastic, which PUMA promises to shred and compost it when customers recycle the shoe.

In contrast, this new economic model just started to gain attention in Africa with the launch of the African Circular Economy Alliance atthe end of 2017, initiated by Rwanda, Nigeria and South Africa in cooperation with World Economic Forum and Global Environment Facility. This alliance was started to fast-trackthe adoption of the circular economy model here in Africa. There is a lot of potential in Africa to adopt a circular business model, as waste management in many countries is still an issue, making it a perfect chance to deal with this challenge.  

Maybe also interesting: There is no garbage, only food

Within Kenya, Mega gas is one of the clients of Kenya Climate Innovation Centre, who has developed a system that converts plastic waste into clean cooking gaseous fuel, without polluting emissions. As a result, the business model of Mega gas can be considered as a sustainable, circular business model as it tackles a sustainability problem by turning the plastic trash into a sustainable and affordable product. 

Read more here: Mega gas: turning plastic waste into cooking gas

Since consumption and production are at the core of the global economy, the accomplishment of SDG 12 through circular economy business models will support the achievements of other SDGs on for example food, water and energy, and will create synergies. Moreover, climate change mitigation and the circular economy go hand-in-hand.

Some of the largest contributors to CO2 emissionsare the construction, manufacturing and agricultural industry. The circular economy is a strategy to secure natural resources for industries,while reducing the energy needed to produce, in a commerciallyviable way. As a result, this model is considered as a long-term necessity that establishes a society with a healthy economy, inspired on and in balance with nature. 

Therefore, investigating and experimenting with the circular economy model should not be seenas an extra burden, but rather asa businessopportunity and a tool to become a better business, now, but also to become future-proof.