Circular economy and sustainability – these two terms are often used together and interchangeably, but are they really the same? Is the circular economy always sustainable? The circular economy contributes to a more sustainable world, but not all sustainability initiatives contribute to circularity. Sustainability is more broadly related to people, the planet and the economy , while the circular economy focuses on resource cycles. Circularity and sustainability are different, but that does not mean that one is better than the other.
When these terms are used together it confuses and dilutes the importance and value of actions related to one or the other. The main difference is that the current Circular Economy model is a human construction intentionally designed and grounded in the technosphere with a clear emphasis on governments and companies. Sustainability, on the other hand, aims to benefit the environment, economy and society in general; responsibilities, however, are shared by all.
What is the circular economy?
It is a production and consumption model that replaces the traditional cycle of manufacturing , use and disposal, with one that prioritizes the recycling and reuse of products, significantly lengthening their life cycle and minimizing the use of resources.
It is key to environmental sustainability because, by prioritizing recycling and reuse , it eliminates excessive spending on natural resources from production and consumption activities. Something essential if you take into account that the Earth takes almost a year and a half to regenerate what we consume annually.
What is sustainability?
This concept began to gain strength after the 1987 UN Brundtland Commission Report, which defined sustainable development as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.”
It is about reconciling economic development with the protection of social balance and the environment. Hence, it is increasingly popular when it comes to talking about how to take care of the planet without compromising economies and seeking social equity.
Benefits of a sustainability and circular economy
The benefits of an improved global sustainability and circular economy include material optimization, new and innovative revenue streams, improved stakeholder relationships and brand reputation, and risk mitigation.
Circular economy, essential for sustainability
The threat posed by climate change becomes more dangerous year after year. Its effects are increasingly devastating and predict a future where survival on the planet will be more complicated. The cause of this phenomenon? Basically human activity.
In this context, it is necessary to find sustainable economic systems that allow us to make responsible use of available resources. This is the reason why the circular economy is important. This system seeks to find a balance in production and consumption. The circular economy aims to responsibly use, repair and reuse to protect the planet.
Why is the circular economy important?
The circular economy is an economic concept that is interrelated with sustainability , and whose objective is that the value of products, materials and resources (water, energy…) be maintained in the economy for as long as possible, and that it be minimize the generation of waste.
It is about implementing a new economy, circular -not linear-. This system is based on the principle of “closing the life cycle” of products, services, waste, materials, water and energy. The advantages of the circular economy for the planet are innumerable.
The term encompasses all the advantages of the circular economy. It refers to the production and consumption of goods and services in a balanced way. And it includes a switch from fossil fuels to the use of renewable energy. It also refers to the function of diversity as a characteristic of resilience and productive systems. Finally, it addresses the discussion of the function of money and finance as part of the debate. Some of its pioneers have called for a revamp of inexpensive performance measurement tools.
The term “circular economy” was first used in Western literature in 1980 (Pearce and Turner 1990). With it, a closed system of interactions between the economy and the environment was described. This work introduces the idea of why the circular economy is so important for the future of our planet.
Circular Economy vs. Sustainability vs. Green
Many marketers use these terms synonymously, although there are actually many differences between the meanings. “Green” is more than a color. We are talking about green products, green jobs, green economy, green technologies. What do we really mean by that?
In this context, the attribute “green” is used as a synonym for the contribution of a given product or activity to the protection of the environment and climate. The circular economy does not necessarily have anything to do with sustainability. The concept brings some ideas that can help with sustainability, but it is always necessary to assess whether they can be applied in terms of sustainability.
Circular businesses may not be sustainable
Two examples of “circular” business models that are not sustainable are Uber and Airbnb. Both companies rely on uncertain working conditions, evade regulations and evade labor laws. In their quest for growth and profit, they often fail to provide security to their service providers and users. A truly circular economy must also be a sustainable economy.
Another example is products made from renewable resources, such as bioplastics or biofuels. They are often considered “green” and “environmentally friendly” but are not necessarily sustainable or better for the environment. If a life cycle analysis shows that it takes a lot of resources to produce it, energy to manufacture it and ship it to you, and if there is no proper way to dispose of the product, then it is not considered sustainable.
The production of crops for biofuels could include intensive agriculture, and the subsequent use of fertilizers would degrade terrestrial habitat and freshwater ecosystems. Composting bioplastics often requires industrial heating to a temperature high enough to allow microbes to break them down.
How does technology help the development of the circular economy and sustainability?
Environmental problems related to economic activities can be prevented by implementing efficient , clean, safe and planet-friendly processes. This is possible thanks to different technologies, such as digital analysis systems, artificial intelligence, the Internet of Things (IoT), blockchain and big data .
The digitization of processes and, also, the collection and analysis of information associated with them and the dynamics of consumption, has enormous potential to optimize the circularity of the supply chain and the design, manufacture, reuse and repair of products.
For example, the IoT in the rural world makes it possible to plan activities based on data and reduce the consumption of water and inputs, making agricultural crops produce more with fewer resources. Something of significant impact when thinking about how to take care of the planet, since agriculture occupies 70% of the water extracted in the world and when it is carried out intensively it can lead to soil degradation, loss of biodiversity, deforestation and defragmentation of habitats.