We need to be honest about the Circular Economy

The term circular economy seems to be popping up a lot these days, and if the excitement is to be believed, we’re on the cusp of an environmental revolution that will solve the problems created by our ever-growing consumption over the past 100 years or so. Amsterdam is the first city to declare that it will become a circular economy city, and companies from Unilever to Volkswagen say that they are working towards a circular economy. 

This is all very encouraging and I deeply want it all to be true, but I do have some concerns that while a circular economy is indeed the solution we need, the term itself is being thrown around rather too casually. If we’re going to actually achieve a circular economy, we need to be really clear about what it means and how far away from it we actually are.

I run a digital agency and so the circular economy might seem like a different universe, but the digital world is entirely dependent on very physical infrastructure and devices. As more and more products become connected, the virtual world of digital technology will increasingly blur with the world of physical things. We need to join up our thinking.

If you’re not familiar with the concept of a circular economy, it’s essentially an economy in which material resources are never wasted and are constantly reused. In theory, this concept eliminates, or at least minimises, the need to keep digging new materials out of the earth and eliminates waste going to landfill and incineration. 

It’s circular because resources keep going around and around in an endless cycle that can continue indefinitely. This is in contrast to our standard practises at the moment in a linear economy, where resources are mined, used, and then discarded.

This is not new. 

There’s a lot of hype around the idea of a circular economy, and it sounds like a new idea to help us solve the environmental crises that we’ve created. But in fact, the idea is not new at all. Essentially, the same idea was proposed in the 1980s, by Daniel Knapp, who spread the idea of ‘Total Recycling’ and coined the term Zero Waste in response to the growing waste crisis at the time. Later, environmental consultants Michael Braungart and William McDonough rebranded the idea as ‘Cradle to Cradle’, emphasising that no materials should ever go to their grave, but instead be constantly reborn. And now we find it rebranded once again, this time as the ‘Circular Economy’.

In truth, the idea goes back even further. Circularity is how nature operates and how humans operated until very recently. Nature values everything and operates in a continuous cycle of birth and rebirth. Humans throughout most of history used only natural, local materials and could not afford to waste resources, encouraging repair, recycling, and when materials were no longer of use, simply returning them to the earth. 

The ‘Linear Economy’, therefore, as well as the very idea of waste, is a relatively new invention in historical terms and has been enabled only by advancements in technology and quirks of our economic system that make it cheaper for us to extract, use and dump than to close the loop on our material resources. 

The circular economy may appear to be a new and revolutionary idea but is actually just a call to get back in line with how nature has always operated.

You’d be forgiven for thinking that circular economy is just a fancy word for recycling and on some level it is, but there’s a difference. The problem with ordinary recycling is that the materials tend to get contaminated and degraded throughout the recycling process, meaning that they cannot be reused for the same quality of applications and become less useful every time they are recycled. 

Materials also tend to end up far away from where they started, meaning that even if recycled, it’s hard to close the loop and feed them back into the production system. To give you an example of this, a product might be manufactured in China, but sold in the UK. So at the end of its life, the materials are in the wrong location to be used again, even if they could be recycled without degradation.

To achieve true circularity, we need to design systems in which the quality of materials can be maintained over an infinite number of repeated cycles and where recycling and production happen in close proximity. This challenges the whole concept of globalisation and perhaps points us towards relocalization, or even hyper localization of manufacturing.

To examine how close we are to a circular economy, we need first to acknowledge a hard truth about the linear economy that has become the norm in the past half century or so. 

The linear economy is often represented by a horizontal arrow, but it is not horizontal. It is linear, but not sideways. It is linear downwards. It is an economy in ecological freefall. 

We now have many companies advertising that they are creating products for the circular economy by incorporating some recycled materials into conventional products. This is not a circular economy as most of these materials have been down cycled and are unlikely to ever be recovered again, at least not without further significant degradation. 

So what is being touted as a circular economy is in many ways, simply mild recycling. It does not close the loop of our economy, but simply slows the rate at which we are falling. It turns the linear freefall economy into a slightly slower downward spiral. Our overall direction of travel is still down.

To understand what true circularity looks like, we must look to nature and see it in action everywhere. Nature wastes nothing and constantly recycles resources in an infinite cycle of life, death, decay, and rebirth. 

A rare example of this in modern human life is the composting toilet. I have one at home and it’s taught me a lot about the nutrient cycle. When I buy food from the shops that is grown far away, eat it and then deposit it later in the composting loo, the nutrients are being recycled and put back into our garden, but it is not truly circular because the nutrients never return to the farm to fertilise the growth of more food. However, when we grow food in our own garden, eat it, deposit it in the composting loo and return it to our garden to grow more food, we have closed the loop. It then becomes truly circular.

Another example that has been around for decades is the reuse of glass bottles. In several European countries, glass bottles are collected, cleaned and refilled. Only when the bottles break are they recycled. And so long as the glass colours are not mixed, glass can be recycled virtually an unlimited number of times. So long as this is all happening in a system where the recycled glass actually does feed back into the production of new bottles, this would be a circular system.

Examples such as composting toilets and glass bottle take-back systems give us a glimpse of what a circular economy would look like. To make it widespread though, we need to do a number of things that we currently aren’t doing. 

1. Design products with simple standardised materials that are easy to separate. 
2. Implement simple standardised recycling systems that can recover materials without degradation. 
3. Relocalize production so that materials can more easily travel back in a loop. Ideally, the recovery of materials would be part of the system designed around any particular product. 
4. Recalibrate economic incentives so that it is more cost effective to use materials efficiently in a closed loop than to constantly extract and dump.

This article may have seemed slightly off topic for the Managing Director of a digital agency, but it’s actually very relevant to every sector, including ours. The digital sector is not solely about software. It is equally about the hardware that our software depends on. 

Electronic equipment is arguably one of the least circular product sectors, with many types of unusual materials bonded together in complex products that are extremely difficult to separate and recycle. The consequence is that we produce 4.5 million tonnes of electronic waste every year globally. The majority of this is never recycled.

We need to be really honest with ourselves about the system that we are currently operating in, not to give ourselves a hard time, but so that we can see clearly where we need to go. 

We need to create circular economy and to do so, we must use the term not as a greenwashing tactic, but as a guiding principle to help us reinvent products, services, supply chains, legislation, and our entire economies. We must use it as a way to move us back towards systems that operate in line with nature’s principles and can deliver value to our society not just now, but forever.