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Circular Economy 101

Find out the Basics of Circular Economy and Explore Further


Linear Economy is the opposite of Circular Economy, which represents how today's typical economic model works. Linear Economy is defined by a take-make-consume-thrown away pattern. This means that the model relies on large quantities of cheap, easily accessible materials and energy, that design products for a limited lifespan to encourage consumers to buy again.(European Parliament, 2015)


A circular economy is an economic system solution framework that revolves around the notion of establishing a flow of resources so that products, components, and materials are maintained at their highest utility and value at all times (Webster, 2015), thereby essentially eliminating waste and consequently fighting global challenges like climate change, waste, pollution, and biodiversity loss.


In simple words, it is a model of production and consumption that is focused on reducing waste to a minimum, by using resources that are at the end of its life, again and again, thereby creating further value.
This is done by combining diverse ideas of a closed-loop economy with a ‘ restorative’ design approach (Murray et al., 2017).


The circular economy is based on three principles, driven by design:

  • Eliminate waste and pollution

  • Circulate products and materials (at their highest value)

  • Regenerate nature


The circular Economy system diagram is also known as the butterfly diagram, illustrates the continuous flow of materials in the economy.

The Butterfly diagram has two main cycles – the technical cycle and the biological cycle. In the technical cycle, products are kept in circulation in the economy through reuse, repair, remanufacture, and recycling. In this way, materials are kept in use and never become waste.

In the biological cycle, the nutrients from biodegradable materials are returned to the Earth, through processes like composting or anaerobic digestion. This allows the land to regenerate and return the nutrients to regenerate nature, so the cycle can continue. 


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