Here’s How ‘Circular Economy’ Came Into Existence

Interestingly the word ‘circular economy’ was not coined by any famous personalities. However, the idea emerged from a book written by Boulding (1996), who had proposed that four walls bounded Earth with “limited assimilative capacity and as such the economy and environment must coexist in equilibrium.” This perception used to be an integral part of the school textbooks since its advent.

With the evolution of the teaching parameters and the interception from environmental economics, clean chemistry, industrial economy, green chemistry, regenerative design, the idea of this closed-loop economy began to emerge. However, several theories claim that the origin of this popular term was from the businessman and profit makers instead of an academic trend line.

Till now, there has been no bolstered conclusion which links the academic trend line of origin with the word’s inception from the businessman. Amalgamating these contradictions, we do have a unified definition of this circular economy, which goes like this, “restorative and regenerative by design, and aims to keep products, components, and materials at their highest utility and value at all times” (Ellen MacArthur Foundation). The term ‘circular economy’ is generally associated with a positive development that aims to preserve the natural resource, promotes sustainable development and minimizes system risks.

Image via Ekiona

The most important aspect of this circular setup is to identify the point where to close the loop. Increasing the circle shall result in the resources to go down while decreasing the loop shall result in the economy to go down. The process simultaneously tries to minimize waste generation, extending the product life, implementing renewable resources, and encouraging people to reuse products.

The European Union, in the year 2014, had invested around 650 British pounds into the movement to drive the circular economy. In the same year, China was the first country to adopt the Circular economy policy as directed by the European Union.

Several organizations, such as the Ellen MacArthur Foundation, are taking the initiative to promote Circular Economy. They have also launched an event known as the ‘CE 100 companies’, in which the council recognizes the top companies worldwide adopting sustainability measures. The event witnesses top brands like Coca-Cola ad Dell to provide them with a stage to share their efforts of saving the planet.

Section 3.1 of the European Unions’ guidebook defines circular economy keeping sustainability on the backdrop. Although the definition seems to be dynamic and changes as the environment adapt to new conditions, a most-cited description was translated as “an economic system that replaces the ‘end of life’ concept with reducing, alternatively reusing, recycling and recovering materials in production/distribution and consumption processes. It operates at the micro-level (products, companies, consumers), meso-level (eco-industrial parks) and macro-level (city, region, nation and beyond), to accomplish sustainable development, thus simultaneously creating environmental quality, economic prosperity and social equity, to the benefit of current and future generations. It is enabled by novel business models and responsible consumers.”

The term ‘circular economy’ has now been channeled into various inlets of understanding, including a new economic strategy, a novel industrial model, or a business model. I believe, although the precise meaning of ‘circular economy’ deals with a financial perspective, the relation of this term to material and energy flow also seems to be a good fit.

The problem of the so-called ‘linear economy’ lied in the fact that these economy system yields at the price of environmental degradation without a vague knowledge whether the economy is benefiting the society or not. It’s the responsibility of the citizens like us to keep the loop closed and as optimized as possible.

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