Social Impact

What is a circular economy?

The ever elusive search to implement an economic system that incorporates full-cost accounting, in other words, that incorporates the full cost of goods and services, including the environmental hazards, resource depletion and end-of-lifecycle costs is making leaps. The European Commission has put forth in their EU 2020 Strategy a suite of measures that will seek to lay the groundwork for a circular economy.

But what is a circular economy? The circular economy concept posits that the relationships between input, product and waste can be closed so that they are in a regenerative state. William McDonough has popularized a similar concept in his seminal text Cradle to Cradle, which recirculates a lot of industrial production theories once posited by Buckminster Fuller and other progenitors of the second industrial revolution. The ideal state for a circular economy takes waste from factories and makes them valuable inputs for other processes and products are repaired, recycled, reused or upgraded instead of thrown away.

The EU seeks to catalyze these efforts by setting standards that incentivize innovation to achieve this type of preferred economical state. The targets would limit the use of raw materials to a cap of 30% of GDP by 2030; a 70% recycling of municipal waste and other waste stream measures that aim to improve environmentally friendly and low resource products and methods. While it remains to be seen if this will be implemented, the signal is clear, this is the beginning of the end of “throw-away” materialism.

Read more: The Epoch Times