1.4.2 Circular economies

Helpful prior learning and learning objectives

Helpful prior learning:

Learning objectives:

Have you ever walked through a forest where leaves covered the ground? Was plastic waste there as well? In a few months, the leaves will decompose into nutrients for the forest. But the plastic will remain for hundreds of years, harming the soil and trees.

This waste comes from our linear economy. A linear economy takes energy and matter resources from nature, makes products, uses them, and then disposes of the waste in landfills, by burning, or simply dumping them back into ecosystems where they poison plants and animals (Figure 2). This take-make-use-waste system degrades Earth’s systems two ways: through the excessive use and loss of priceless energy and matter, and by poisoning the conditions for life.

Forest with leaves and plastic waste

Figure 1. Human waste does not decompose like leaves

(Credit: Marco CC0)

Take, make, use waste with globe, factory, person and garbage icons

Figure 2. The linear economy, degrading Earth’s systems

What are the principles of a circular economy?

Unlike a linear economy, a circular economy aims to work like nature, taking less from the Earth and returning valuable energy and matter back into biological and economic systems. The circular economy aims to extend the life cycle of the products our economies produce and make them environmentally-friendly by pursuing three overlapping key principles: eliminate waste and pollution, circulate products and materials, and regenerate nature. As you read this section, think about how these principles are related to Nature’s Unifying Patterns (Section 1.4.1) if you studied that section. The short video below summarises the ideas.

Eliminate waste and pollution

The level of waste and pollution in our economies is not inevitable, it’s a design flaw from an ecological perspective. Humans choose how to produce and package products. A business producing snacks in single-use plastics has made a design decision that does not adequately address waste and pollution. We can design-out waste and pollution by:

Part of the design process is to consider financial implications for the business and consumer. Businesses wish to keep costs of production low and consumers need to be able to afford the product, so this needs to be planned into the design choices.

In the short video below, designers from IDEO explain the importance of systems thinking in circular product design.

Circulate products and materials

To reduce waste, businesses must learn to keep products and materials circulating at their highest value. A technical cycle is used with manufactured materials like computers, cars and household electric devices, by:

Two yellow car share cars

Figure 4. Car sharing is increasingly popular

(Credit: harry_nl CC BY-NC-SA 2.0)

A biological cycle is used with organic materials like food. The focus is on returning materials to nature’s biogeochemical cycles (Section 1.2.6) by using decomposition processes like composting (with oxygen) or anaerobic digestion (without oxygen). Decomposed materials are used to nourish new plant growth in ecosystems.

Circulating products requires thoughtful design right from the start, relating to the first circular economy principle. This includes planning durable, shareable, repairable, and recyclable products already in the design stage. Research, innovation, and entrepreneurship are all important for expanding the circular economy.

Food compost pile

Figure 5. Composting food waste is an effective way to return nutrients to biogeochemical cycles

(Credit: neonquark CC BY 2.0)

Regenerate nature

Unlike other living organisms, humans often take from the environment without giving much back, leading to extraction of energy and material resources,  deforestation, soil depletion, excess water extraction and biodiversity loss. Instead, we need to meet our needs while regenerating Earth’s systems by returning nutrients and materials to ecosystems, just like other organisms do.

A key area for regeneration is agriculture. Although current intensive farming methods have been feeding a fast growing global population at affordable prices, they strip soil of nutrients, pollute ecosystems with excessive fertilisers, increase carbon dioxide (CO2) emissions, and harm biodiversity. 

Regenerative farming, on the other hand, aims to mimic nature to improve soil health, enhance CO2 absorption of soil and biomass, conserve water, and make crops more drought-resistant. This can be done through increasing the biodiversity of crops, avoiding tilling the soil and composting plant waste, among many others. This has to be done carefully with full understanding of ecosystems and may require more farmers and land space for farming.

Other regeneration strategies include:

Green park in Bangkok Thailand

Figure 6. Centenary Park at Chulalongkorn University in Bangkok, Thailand is designed to work with and capture water for urban wetlands

(Credit: Supanut Arunoprayote CC BY 4.0)

What are the limitations of circular economy strategies?

Circular economy strategies are a core part of regenerative economies. They help us redesign our economies to function like nature, with less energy and material use and less waste. Circular strategies reduce pressure on planetary boundaries, positively impacting climate change, biodiversity, land use, freshwater withdrawals, and pollution (Section 1.2.7).

However, the circular economy has limitations. Some businesses use circular economy strategies to greenwash, distracting from other negative impacts of their business. For example, a fizzy drinks business promotes their recycled plastic drink bottles, but does not address its factories' poor working conditions, or excessive water use causing water shortages in the local community.

Circular economy strategies alone are not enough to meet human needs within planetary boundaries. We must also consider what and how much we produce and consume. It’s great for a clothing business to use recycled wool, but we should first ask: do we need more clothing? Reduction is crucial, the first step for businesses and individuals to consider especially in high income countries where most needs have been met, because:

Wool sweaters hanging on a rack

Figure 7. Recycled wool, but do you need it? Reduction is key

(Credit: Anna Ivanova CC BY-NC-ND 2.0)

Reduction of output in some highly damaging economic activities could enable workers to shift to other industries that regenerate social and ecological systems, but state financial and training support is necessary to ensure that workers aren’t left behind in the transition.

The circular economy can be strengthened by government regulations that require businesses to use circular strategies, like France’s Anti-Waste Law adopted in 2020 or the Ecodesign for Sustainable Products Regulation of the European Union. Such laws are more likely to bring system-wide change to economies because they apply to everyone and make it easier for consumers to make good choices. When governments, businesses and individuals work together, the circular economy can be a powerful regenerative force.

Activity 1.4.2

Concept: Regeneration

Skills: Thinking skills (transfer)

Time: Varies depending on option

Type: Individual, pairs, and group - varies depending on option

Option 1: Think, pair, share

40 minutes

In our current linear economy, many people around the world use their mobile phone for just a few years before replacing it. This is a deliberate design decision, called planned obsolescence. Technology companies want consumers to buy new phones frequently so they can increase their profits. E-waste from disposed mobile phones causes considerable pollution, harming ecosystem and human health, especially in low-income countries where global e-waste is often sent. Phones also contain valuable materials that should not be wasted. 

After you brainstorm your ideas, you may want to see an example. Fairphone is a company using circular design principles for its mobile phones. Do any of its strategies match yours? See if any of Fairphone's features match the ideas you've come up with.

Option 2: Case studies on the circular economy

30-40 minutes

The Ellen MacArthur Foundation has a collection of case studies on the circular economy from around the world. Find the region where you live and select a case study to learn more about it. Make sure to understand how the story illustrates one or more principles of the circular economy. Share what you found with a partner or the rest of the class.

Option 3 - Practising interpreting complex diagrams

30 minutes

The Ellen MacArthur Foundation is a global leader on research and support for businesses on the circular economy. The organisation has produced the butterfly diagram (Figure 6) to illustrate how products and materials can be circulated in a technical cycle (right) and a biological cycle (left). The diagram looks complicated, but if you take a little time to focus on individual parts, you can understand it more easily and then use it to explain the circular economy to others.

Preferably working with a partner, cover the left half of the diagram, so you only see the technical side. Start from the top, where it says “finite materials” and move downwards to see the manufacturing process (the physical part of provisioning systems if you have studied Section 1.3.5). Then move to the right and look at each of the arrows to find the various ways that circulation can happen - these match the bullet list used in this section. Once you have looked at all parts of the diagram, practice using the diagram to explain the technical cycle to your partner.

Follow the same routine for the left side of the diagram, covering the right side.

This video explains the butterfly diagram, if you would like to check your understanding.

Butterfly diagram of technological and biological cycles

Figure 8. The butterfly diagram of the circular economy

(Credit: Ellen MacArthur Foundation)

Ideas for longer activities, deeper engagement, and projects are listed in Subtopic 1.5 Taking action

Checking for understanding

Further exploration

They recently produced three short videos to address each of the three circular economy principles. Difficulty level: easy


Ellen MacArthur Foundation. It’s time for a circular economy. https://www.ellenmacarthurfoundation.org/

Mayers, K., et al. (2021, June 16). The Limits of the Sustainable Economy. Harvard Business Review. https://hbr.org/2021/06/the-limits-of-the-sustainable-economy

Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House

Terminology (in order of appearance)

Link to Quizlet interactive flashcards and terminology games for Section 1.4.2 Circular economies

waste: unwanted or unusable materials

decompose: to break something into smaller parts, especially organic materials

linear economy: an economic system where resources are extracted to make products that eventually end up as waste

energy: the ability to do work or cause change

matter: anything that takes up space and has mass

landfill: the place where waste is disposed of by burying it

degrade: break down or deteriorate

circular economy: an economic system where nature is regenerated and materials are kept in circulation through maintenance, reuse, recycling, composting, and other processes

economy: all the human-made systems that transfer and transform energy and matter to meet human needs

system: a set of interdependent parts that organise to create a functional whole

pollution: the presence of a substance that has harmful effects on the environment

Nature’s Unifying Patterns: universal patterns of function, processes or structure in nature

technical cycle: the part of the circular economy that involves non-biodegradable materials

biological cycle: the part of the circular economy that involves biodegradable materials

organic: carbon-based materials or organisms

biogeochemical cycle: Earth system cycles that move essential elements like water, carbon and nitrogen between living and nonliving parts of ecosystems

composting: the natural process of recycling organic matter, such as leaves and food scraps, into a valuable fertilizer that can enrich soil

anaerobic digestion: decomposition organic material in the absence of oxygen

ecosystem: the interaction of groups of organisms with each other and their physical environment

entrepreneurship: setting up a new business and taking financial risks

deforestation: the activity of setting up a business or businesses, taking on financial risks

biodiversity: the variety of living organisms on Earth

regenerate: to restore or strengthen ecosystems or social systems

intensive farming: farming that uses large amounts of land, labour and material inputs and strives to maximise output

fertiliser: a chemical or natural substance added to soil or land to increase its fertility

carbon dioxide (CO2): gas produced by burning carbon or organic compounds and through respiration, naturally present in the atmosphere and absorbed by plants in photosynthesis

regenerative farming: farming in balance with and strenghening natural systems

biomass: organic matter

tilling: to prepare land for growing crops, usually by turning over the soil

rewilding: protecting an environment and returning it to its natural state, passively by leaving it alone or actively by reintroducing native organisms that might have disappeared

food web: a complex set of feeding relationships between organisms, with multiple connections between them; shows the transfer and transformation of energy and matter through living organisms in an ecosystem

sponge city: urban planning strategies that use natural landscapes to catch, clean and store water

infiltration: the transfer of water through soils, collecting as groundwater

resilient: able to recover after a disturbance

regenerative economy: an economic system that meets human needs in a way that strengthens social and ecological systems

planetary boundaries: the limits of human disturbance to the nine Earth systems that sustain all life

climate change: a change in the temperature and precipitation patterns in an area, in recent times due to human economic activities

greenwash: misleading information about product qualities disseminated by an organization to portray an environmentally responsible image

rebound effect: a situation where efficiency gains in an input are counteracted by increased consumption and production, resulting in even greater use of the input

efficiency: the ratio of resource inputs compared to outputs

regulation: a rule that guides individual or group behaviour and enforced by an authority

planned obsolescence: a deliberate strategy to increase sales of new products by making products that require frequent replacing due to changes in design, lack of spare parts for repair, or poor quality materials

butterfly diagram: a model showing the biological and technical cycles in a circular economy

provisioning system: systems that manage the levels of energy and matter used to meet specific human needs