Circular Economy – Definition, Benefits, And Importance

The circular economy has become quite a significant factor around the world these days, and a prominent example of that is the European Union, which is said to produce at least 2.2 billion tons of waste yearly! Even as we speak, the region is updating its rules and regulations related to managing waste to promote a shift towards the more sustainable model we are talking about – the circular economy. The question that needs to be asked is what this means and how it can benefit the global economy, at large.

So, what is the circular economy?

Well, circular economy can be defined as a model of consumption and production that requires the following actions to be taken with existing products and materials for as long as possible:

• Sharing
• Leasing
• Reusing
• Repairing
• Refurbishing
• Recycling

The main aim here is to extend the lifecycle of these phenomena. In practical terms, this implies reducing waste to the lowest possible level. Thus, methods such as recycling are being used to keep the materials of a product in an economy when the latter reaches the end of its natural lifecycle. Hereby, the intention is to use them productively as many times as possible, thus creating more value.

What are the benefits of a circular economy?

The most prominent benefits of a circular economy are protecting the environment, reducing dependence on raw materials, creating jobs, and saving consumers’ money. When you reuse and recycle products, it slows down the extent to which natural resources are used. It also reduces the disruption of habitats and landscapes and helps limit biodiversity loss.

A significant benefit of a circular economy is the reduction of the emission of greenhouse gases in a year. The European Environment Agency says that product usage and industrial processes account for 9.10% of said emissions in the EU, while the percentage for corresponding waste management is 3.2%.

The population around the world is growing. It means there is a greater demand for raw materials. However, the supply of raw materials is not unlimited. It makes some EU countries dependent on other countries for raw materials. When you move towards a circular economy, you become more competitive, boost economic growth, stimulate innovation, and create jobs. It is expected that by 2030, a circular economy will create 700,000 jobs in the EU (European Union). By redesigning products and materials for circular usage, you boost innovation in many sectors of the economy.

Conclusion

EU is taking several steps to be a circular economy. In March 2020, it presented the Circular Economy Action Plan, which aims at promoting more sustainable product design, reducing waste, and empowering customers. An example of this is the way it’s promoting the right to repair in the region. It focuses on sectors that use a whole lot of resources, such as ICT (information and communications technology) and electronics, textiles, plastics, and construction. In February 2021, the Parliament also took a resolution on the new Circular Economy Action Plan focusing on areas, like carbon neutrality and environmental sustainability.

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