Skip main navigation

Circular economics

In this article learn about what it would mean to move towards a circular economic model.
An illustration of a circle divided into five equal segments, the circle is bordered by a ring with arrows moving clockwise.
© Conor Rigby - Creative Computing Institute

To begin to rethink how we can approach our economies, shifting away from linear systems where the people at the top benefit, many have discussed a more circular approach, but what does that mean?

The Ellen MacArthur Foundation puts forward a robust definition of circular economics, defining it as an approach to economic development “designed to benefit business, society, and the environment”. It exists in direct contrast to existing linear models, which drive profits upwards and where resources exist in a “take-make-waste” model.

As stated, circular economies are designed to be generative and “gradually decouple growth from the consumption of finite resources”. In this model, “economic activity builds and rebuilds overall system health”. As we discussed previously, the solutions we create need to work across scales and circular economies seek to do just this, working effectively “at all scales – for big and small business, for organisations and individuals, globally and locally”. Fundamentally, they define circular economies by three principles:

  • To design out waste and pollution from the environment
  • To keep products and materials in use
  • To regenerate natural systems

So how is it broken down further?

Dealing with waste and pollution

Circular economies seek to “reveal and design out the negative impacts of economic activity that cause damage to human health and natural systems”. Including the release of dangerous emissions, the mining and distribution of hazardous substances, and the pollution of air, land, and water.

Effectively managing resources

A circular economy “favours activities that preserve value in the form of energy, labour, and materials”. This means that products and services need to be designed for “durability, reuse, remanufacturing, and recycling”, this way we can keep resources circulating in the economy. Circular economies also prioritise bio-materials, such as what we discussed previously, as such materials can easily shift from natural systems into the economy and back again.

Protecting and improving the environment

By avoiding the use of non-renewable resources, circular economies can preserve or enhance renewable resources, for example “by returning valuable nutrients to the soil to support regeneration, or using renewable energy as opposed to relying on fossil fuels”.

diagram by the Ellen MacArthur Foundationn illustrating circular economicsClick to expand

In this diagram by the Ellen MacArthur Foundation, we can see how a circular economic model would work. Influenced by cradle to cradle’s philosophy of there being two material cycles, that which is renewable and that which is finite, mentioned previously in Step 1.15 on material life cycles.

The green side of the diagram represents renewable materials, also defined as biological materials. These are materials which can “safely re-enter the natural world, once they have gone through one or more use cycles, where they will biodegrade over time, returning the embedded nutrients to the environment”.

The blue side represents finite materials, also known as technical materials. These are materials which cannot re-enter the environment. Such as metals, plastics, and synthetic chemicals. These materials “must continuously cycle through the system so that their value can be captured and recaptured”.

One particular differentiation put forward by the foundation is the difference between cycles of consumption and use. In a circular economy “biological materials are the only ones that can be thought of as consumable, while technical materials are used”. They expand on this by adding that “it makes no sense to say that we consume our washing machines and cars in the same way that we consume food. This is a subtle, but important distinction in how we view our relationship to materials”.

So what impact would a circular economy have on the environment?

Circular economic models would greatly improve our chances of meeting global climate targets “by designing out waste and pollution, keeping products and materials in use, and regenerating rather than degrading natural systems”. For example, the UK could reduce emissions by 7.4 million tonnes per year if it were to redistribute organic waste back into production cycles.

Beyond the environment

Circular economies also present incredible opportunities to businesses and individuals alike. Including new profit opportunities, reducing material costs, safer working conditions by leaving behind hazardous substances, and a range of other health benefits by maintaining ecological prosperity.

So how do we move forward?

The work of the Ellen MacArthur Foundation on circular economies has been hugely popular, however, as Martin Calisto Friant notes, such work has failed “to build a systemic and holistic understanding of the social and sustainability implications of the circular economy” (2). For all the benefits put forward by circular economies, the question remains how we transition to such models without creating further social inequality. If we are creating technologies that last longer, what happens to jobs, particularly those in underdeveloped countries who are responsible for production. People are dependent on the systems we have created, so how do we transition ethically? Some argue that the models of circularity need to be taken further and we will be looking at this more in the next step.

Discussion prompt

Use the comments section to discuss your thoughts on the idea of circular economics. Are there any other benefits you can think of that haven’t been mentioned? Do you see any shortcomings in the model? Discuss below.


  1. The Ellen MacArthur Foundation. The Circular Economy in Detail
  2. Martin Calisto Friant, Walter J.V. Vermeulen, Roberta Salomone, 2020. A typology of circular economy discourses: Navigating the diverse visions of a contested paradigm, Science Direct.
© Creative Computing Institute
This article is from the free online

Building a Sustainable Future with Technology

Created by
FutureLearn - Learning For Life

Reach your personal and professional goals

Unlock access to hundreds of expert online courses and degrees from top universities and educators to gain accredited qualifications and professional CV-building certificates.

Join over 18 million learners to launch, switch or build upon your career, all at your own pace, across a wide range of topic areas.

Start Learning now