There are many definitions, but one useful one is: A durable economy which retains and reuses raw materials without needing additional new raw materials over the long term.
Or: Goods are made and companies make a profit but with no burden on the natural environment.
The world is a long way – at the moment – from achieving a circular economy. Instead currently many products form part of a “Linear economy” in which raw materials are taken from the natural environment, turned into products and then at the end of the product’s life are discarded. A Circular economy, in contrast returns all of the product’s components to be reused to make new products.
Moving from a Linear to a Circular economy can be seen as a progression or a series of steps. An example of a motorcar may illustrate this progress from Linear to Circular:
- When motor cars were first manufactured, raw materials were mined which were turned into a vehicle. At the end of its life, the vehicle was dumped. The car ran on fossil fuel. Totally Linear
- Later scrapyards were set up where some materials – principally the steel – were collected, crushed, melted down and then added to fresh iron ore to make new steel components. Very partially Circular
- Cars were then built which ran on renewable energy sources such as electricity from wind or solar. Partially circular
- The so-called “Sharing economy” began in which vehicles were shared either as an on-demand taxi service or as self-drive. There was no longer a need to own your own vehicle, which reduced the number of vehicles that needed producing and hence demanded less raw materials from the environment
- The need to own a vehicle was further reduced when certain new urban areas were designed so that people could live, work and socialise within a short walking distance. Less vehicles made means less raw materials used
- New ways of working reduce the need for commuting and vehicles. For example, working over the internet or using tele-presence
- In the future, vehicle production will move further towards a fully circular system when the vehicles are designed so that components can not only be recycled, but instead reused to make new vehicles at the end of their lives
Ultimately, all of the above steps of recycling, renewable energy sources, sharing and circular design will lead to a fully circular economy in which no further raw materials will need to be taken from the natural environment. Energy coming from renewable power sources is the only thing that will have to taken in to keep the economy running.