Overview of circular economy

Learn about the circular economy and its impact on sustainability.

Many organisations currently operate under a ‘linear economy’ model, where resources are extracted to make products that eventually become waste. The earth’s resources however are not infinite, nor is its capacity to accept our waste.

Rethinking economic models for sustainability

The linear economy model does not recognise the very real biological limitations economies operate within, which cannot be maintained in the long term. An alternative exists however, one where a continuous flow of materials stay within the biological limits of the planet; materials never become ‘waste’. Instead, they help to rebuild ecosystems. This is called a ‘circular economy’. Products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, and recycling, or are returned to the earth in ways which support regeneration and biodiversity, such as through composting.

_{Circular economy vs linear economy, © Getty Images
Select the image to open in fullscreen}

The circular economy is one of the solutions to many of our global sustainability problems by separating, or ‘decoupling’, economic growth from the depletion of finite resources and the environmental degradation that follows.

The circular economy aims to design products and processes that generate minimal waste which can lower disposal costs for businesses and lower the environmental and social costs for poorer socio-economic communities who are often left to live and deal with the waste and pollution it creates (Walker 2012; Devine-Wright and Quinn 2020). Through a combination of structural change (design, manufacture etc.) and behaviour change strategies (incentives, education, prompts etc.) this holistic sustainability solution is entirely possible.

The butterfly diagram

Access the article and review the diagram, which illustrates how biological and technical materials cycle through processes like reuse, recycling, and regeneration to minimise waste and environmental impact.

Business leaders increasingly recognise the need to shift from the traditional take-make-use-dispose model, but a significant knowledge gap remains. Resources like this course can help close that gap and create opportunities for learners, as businesses often need guidance to develop strategies for contributing to the circular economy (Parry-Husbands et al. 2021).

Watch the video

The following video features an insightful conversation between Ellen MacArthur and Joe Iles, where they discuss the various loops of the Ellen MacArthur Foundation’s butterfly diagram. It offers valuable insights to deepen your understanding of the circular economy and its role in supporting a more sustainable future.

References

_{Devine-Wright and Quinn 2020}

_{EIA (2021) Plastic Waste Trade}

_{Greg Petro (2021) Gen Z Is Emerging As The Sustainability Generation, Forbes}

_{Gomes, S., J. M. Lopes and S. Nogueira (2023). Willingness to pay more for green products: A critical challenge for Gen Z, Journal of Cleaner Production 390: 136092.}

_{Howard Parry-Husbands, Jo Zwart, Bronte Rice-Jenkins, Rebecca Gilling and Dr Nicole Garofano (2021) Circularity In Australian Business 2021: Awareness, Knowledge and Perceptions, Australian Circular Economy Hub and Planet Ark}

_{Walker 2012, in Devine-Wright and Quinn 2020}

_{Wood, J. (2022) Gen Z cares about sustainability more than anyone else – and is starting to make others feel the same, World Economic Forum.}