Circular Economy vs Linear Economy – Understanding the Difference

To understand what a Circular Economy is and why it is so important in protecting the environment, it is first necessary to understand what a Linear Economy is.

What is a linear economy?

A Linear Economy is a system by which people buy a product, use it for a period of time, and then dispose of it. The term ‘linear’ refers to the straight progression that a lifecycle of product follows i.e. there is beginning, a middle and an end. There is little or no thought given in the process to recycling or reuse. This model is often characterized by a high volume of new manufacturing – geared to high profits.

The biggest problem with operating a Linear Economy is that it is a polluting system that destroys nature, adversely affects the climate and causes a loss of biodiversity.

The linear economic model

Unfortunately, linear economic thinking has been around for centuries and was the dominant economic model for most of the 20^th Century. It is centered on the desire to manufacture products and offer services for the lowest possible price. Raw materials are extracted from nature at the lowest possible cost (with little consideration given to the environmental impact), manufactured into products with the least amount of labour possible and then sold at the highest possible price. Dealing with the waste is someone else’s problem.

We are now at a point in time, where there has been a dawning realization by many that this linear ‘take-make-use-waste” economy is simply not working and it’s rapidly destroying the natural environment. Society is extracting virgin raw materials at a pace so rapid that they simply cannot be replenished.

Why the linear economy is not sustainable

We are already having problems extracting some critical raw materials that are in constant demand. At the same time, the amount of waste keeps growing. Global waste generation is expected to increase by 70% by 2050.

Therefore, the current way of linear thinking and operating must be replaced with a new way of circular thinking and operating if we are resolved to reducing the extraction of virgin raw materials and waste generation.

The world produces billionof tonnes of waste every year and there needs to be a fundamental shift to a more sustainable model known as the Circular Economy.

What is the circular economy?

The Circular Economy is a model of production and consumption that involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible in order to ensure that the life cycle of products is extended, and waste is reduced to a minimum. When a product reaches the end of its life, its materials and components are kept within the economy wherever possible due to recycling.

This is a significant departure from the traditional linear economic model. This ‘take, makes, use, waste’ model relies on large quantities of cheap, easily accessible materials and energy and leaves the burden of dealing with the waste to others. Part of this model is ‘planned obsolescence’ i.e. a product has been specifically designed to have a limited lifespan to encourage a failure of the product at some point in the not-too-distant future and consumers to have buy it again.

Protecting the environment with the circular economy

Reusing and recycling products slows down the use of the planet’s natural resources, reduces landscape and habitat damage and helps to reduce the loss of biodiversity.

Another benefit of the Circular Economy is a reduction in greenhouse gas emissions. Creating more efficient and sustainable products from the beginning helps reduce energy and resource consumption. It is estimated that over 80% of a product’s environmental impact is determined during its design phase.

Packaging is a growing issue and significant steps are required to tackle excessive packaging and improve its design to promote reuse and recycling.

Reducing raw material dependence

The world’s population is growing as is the demand for raw materials, however the supply of critical raw materials is limited. Finite resources also mean that many countries are dependent on other countries for their raw materials. Recycling raw materials also mitigates supply risk such as price volatility, availability and import dependency.

Circular economy creates jobs and saves consumers money

Moving towards a Circular Economy could increase competitiveness, stimulate innovation, boost economic growth and create jobs. Redesigning materials and products for circular use would also boost innovation across different sectors of the economy. Consumers will be provided with more durable and innovative products that will increase the quality of life and save them money in the long term.

How the circular economy makes a difference

If we are to build a circular and climate-neutral economy, it is imperative that we reduce waste and make products more sustainable. When a product reaches the end of its life, its materials must be kept within the economy wherever possible.

We all need to act and think very differently if we are to make a difference.