Circles Instead of Exponential Curves

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Ed. Note: We are happy to share this reader response, which is part of a series submitted by undergraduate students at Loyola University Chicago from a course called ENVS 363: Sustainable Business Management.

There have been several proposed economic models that do not rely on continuous growth, but instead focus on other areas where an economy can be successful. The best model for an economy without continuous growth is the circular economy proposed by Ellen MacArthur. This sustainable model is, according to the Ellen MacArthur Foundation, “restorative and regenerative by design” (What is a Circular Economy?). However, the real problem is that in order to make a successful economy without economic growth we need to change not only the economic model, but we need to change the attitudes of corporations involved with the manufacturing of products.

The circular economy has three main principles. The first principle is recognizing the finite amount of resources the Earth has, and works to balance how much is used and created for products. This principle also aims to use more renewable resources, but only in sustainable amounts. The second principle has to do with the products that are created and sold. These products need to be made sturdier and parts need to be circulated and reused for as long as they can. This principle applies to technical products such as computers and cell phones, but it also applies to biological cycles like food production. The last principle works to lessen the damage to systems like food, education, and health (Circular Economy System Diagram).

The diagram to the right shows the technical side of the circular economy model in action. In the circular economy, no one actually owns a product, rather users lease the products from a particular company. If a product needs maintenance, the user of the product would first resolve the issue if they could. If the device continues not to work, the user would then bring it to a service provider for maintenance. Once the user is done with the product, it would go back to the product manufacturer to redistribute to another user. If that product is beyond repair, the device would be taken to the parts manufacturer, where the parts would then be recycled and used for different products. In order for this model to work, products must be manufactured to be more durable and companies must actively participate in each step of the processes to be successful. On the other side of the diagram is the biological process. More straightforward, this cycle demonstrates the importance of reusing excess biochemical waste from both the harvest and consumers to put back into restoring the atmosphere (Circular Economy System Diagram).

This circular economic model aims to design out as much waste as possible. This model aims to keep product loops tight and to have the products and parts go through the cycle as many times as physically possible. This part does not necessarily have to function as the same part for the same product continuously; this process could create diverse uses for a product. For example, cotton from a T-shirt could then be reused for fiber-fill in upholstery, then for stone wool insulation, and then it could return to the biosphere.

The circular economic model can be one answer to the tough question: “How can we create a successful economy without continuous economic growth?” But the most difficult part of this question lies within the people, rather than the models. There needs to be a reformation of attitudes and behaviors in economists, politicians, and corporations in order to have a successful circular economy. This idea requires complete innovation on the entire industry, so their opinions on the matter are incredibly important for the successful utilization of this model. Fortunately, there have been several companies that have tried this model for themselves and have seen great outcomes. Levi Strauss has begun recycling old jeans and manufacturing them into other types of clothing to be sold. Once the consumer is done with the product, this piece of clothing can then be remanufactured again into a different clothing product. Nike also has its hand in the closed loop process: over 70% of Nike shoes made in 2016 were made with recycled waste product generated from Nike’s factory (Mazzoni).

However, changing the attitudes and behaviors of millions is not as easy as seeing a few successful cases. In 2016, McKinsey & Company published a document that proposed how to turn the circular economy idea into a reality in corporations. It was crowned the ReSOLVE Framework, and each letter is an action to transition to the circular economy. The ReSOLVE Framework focuses on regenerating, sharing, optimizing, looping, virtualizing, and exchanging to execute the circular economy model. Regenerating refers to shifting to renewable energy and to help reclaim, retain, and restore health to ecosystems. The next step is encouraging sharing by reusing and building more durable products. Optimizing products comes next, and in this step products are created to be more efficient and to remove waste from the supply chain as much as possible. The loop in this model refers to recycling and remanufacturing pieces of a previously used in another product, as demonstrated in the technical circular economy diagram. Virtualizing is the next step, by having previously physical products be done electronically, i.e., books, DVDs, CDs, etc. The last section in the framework is exchanging, meaning replacing old materials with renewable ones and applying new technologies to processes (The Circular Economy: Moving from Theory to Practice).

When corporations apply this framework to this business model, we see a transition to a more sustainable and successful economy. Changing times call for changing mindsets, and the start of this economic transition begins with the corporations that manufacture products. Like the hamster, our economic growth curve cannot continue to grow forever. It is time for the exponential curve to transform into a circle.

 

“Circular Economy Diagram,” Ellen MacArthur Foundation. 12 Oct. 2017.

“The Circular Economy: Moving from Theory to Practice | Sustainability & Resource

Productivity.” McKinsey & Company. N.p., n.d. Web. 13 Oct. 2017.

Simms, Andrew, director. The Impossible Hamster. YouTube, 24 Jan. 2010.

“What Is a Circular Economy?” Ellen MacArthur Foundation. 12 Oct. 2017.

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