"Doing more with less" is one of the mottos that best describes the circular economy. This is a thought that should push each share of economic subjects, especially enterprises.
The current financial crisis has inevitably impeached the old mode of economic thought. The crisis has confounded scholars of the private sector and the market mechanism. The failures of the markets on the one hand boosted the area of Keynesian economics associated with a strong criticism of distributive inequality, and they have also opened the doors to new concepts of scarcity of resources, the defence of natural ecosystems, energy renewable.
The ISWA, the International Solid Waste Association, often talk about the dangers of a world where the open sky dumps hosting 40% of the waste produced by man. This is a global health emergency and the care is precisely represented by the circular economy (ISWA, 2017).
The benefits of circular economy are clear and from different areas: environmental, social and economic. The success of this economic model depends on how the transition will be managed, how quickly education takes root in cities, but mainly on how quickly we will be able to develop the appropriate skills and necessary to benefit from it. Now we see in detail the main advantages of circular economy.
The circular economy will have a positive impact on growth. By 2030, potential growth may be worth 4.5 trillion dollars globally. This was stated by the book “Circular Economy - From waste to value” written by Peter Lacy, Jakob Rutqvist and Beatrice Lamonica, the Sustainability services division executives of the consulting firm Accenture (Lacy et al., 2015).
On the other hand, argue the authors, is no longer sustainable to continue with the current economic model of "take, make and throw" if we do not change the register, we will find ourselves with a devastated environment, a surge in prices and submerged by waste.
According to the European Commission more efficient use of raw materials and resources throughout the supply chain materials could reduce the need for new raw material of 17% -24% by 2030, with savings for European industry estimated at 630 billion Euro per year. Several studies on the potential of circular economy indicate that European industry, thanks to substantial savings on the cost of raw materials, could push the growth of European GDP by about 3.9% and create millions of new jobs. The circular economy could save 8% of annual turnover to the industries while also reducing its total annual emissions of greenhouse gases by 2.4% (European Commission, 2014c).
Translating into reality the current wave of eco-innovations in rapid development in the context of a circular economy, according to a study carried out for the Ellen MacArthur Foundation, the European Union could achieve annual savings of almost 1,000 billion Euro by 2030.
New technologies and business models have already partially realized include car sharing and driverless cars, electric vehicles, advanced materials such as graphene, precision farming, the modular processes in construction and highly efficient passive housing energy.
According to the report, one can in any case provide that these technologies will reduce costs in three broad areas, namely mobility, food and built environment, from EUR 900 billion annually by 2030. If such improvements will be implemented in the framework of a circular economy rather than linear, the savings could double to EUR 1.800 billion, according to estimates of the report (Ellen MacArthur Foundation, 2015).
Greater system and collaboration between companies
The best definition of circular economy is perhaps that of Ellen MacArthur: the circular economy is "industrial economy that is conceptually regenerative and reproduces nature in actively improving and optimizing the systems through which it operates." The waste do not exist. The biological and technical components of a product are designed with the assumption of fit within a materials cycle, designed for disassembly and re-purposing. The organic nutrients are non-toxic and can simply be composted. The technical nutrients - polymers, alloys and other artificial materials - are designed to be used again with a minimum energy expenditure.
The circular is therefore a form of economy that is more collaborative, which focuses on the property and not so much the product as such, but its function and its use. The circular economy is an economy in which waste of a process of production and consumption are circulating as a new entry in the same or a different process.
All this inevitably leads to greater collaboration between companies, but also between the public administration, research and companies themselves to find new operational solutions. Companies cannot think only about their business, but they have to assess the impact of their actions on the surrounding environment confronting all other economic actors.
Improvement of products and savings on production costs
Working for a circular economy means focusing on products of longer duration, developed for the upgrade, aging and repair, considering strategies such as sustainable design. Different products, materials and systems, with many links and measures are more resilient in the face of external shocks, compared to only systems built for efficiency.
Implement the circular economy approach in the manufacture of durable goods of life expectancy is estimated to result in savings of between 340 to 630 billion per year in the EU alone, approximately 12-23% of the actual costs incurred for production materials in these areas. For some consumer goods, such as food, beverages, textiles and packaging, the savings potential for the material is even estimated in 700 billion per year. Another study, however, estimates the benefits of reducing the costs of production/waste disposal, providing annual savings ranging from 245 billion Euro to 604 billion Euro (European Parliament, 2016c).
Obtaining benefits from the adoption of circular economy also depend on how well and quickly the necessary skills and education to the basics will be implemented and developed. Among the first goals reached there is definitely a greater self-sufficiency in relation to raw materials: already the consumer a share today between 6% and 12% of matter - including fossil fuels - is currently avoided through recycling and reuse, and careful design. Percentages that can arrive with the right efforts to 10-17%, giving a cut of almost a quarter import of raw materials by 20301.
Business competitiveness increase
Prolong the productive use of materials, reuse and increase its efficiency leads to an increase in competitiveness for companies that operate in this way. The companies included in a circular economy context have an important competitive advantage over competitors with consumers. Consumers are becoming increasingly aware of how a product is made and what impact it has on the surrounding environment. So consumers prefer to buy a consumer product circular rather than linear.
Reducing impact on the environment
Many experts think that the basic commodities (oil, copper, cobalt, lithium, silver, lead and tin) are likely to run out between 50-100 years from now. But between the increasingly scarce resources there is also the water: in 2050, more than 40 percent of the world population (almost 4 billion people) will live in areas afflicted by a severe water shortage. Human intervention, such as the increase in greenhouse gases and the use of fertilizers in cultivation, are threatening planetary absorption reservoirs like forests, atmosphere, oceans, etc.
Then there is the issue of waste. If we continue with the current waste model of growth by 2025, municipal waste will increase by over 75% and industrial by 35%. And so far, we reached 11 billion tonnes of waste generated each year. Experts predict tensions on commodity markets and volatility, as well as stressful situations related to water and food safety, which would create geopolitical tensions and instability2.
Concretely, walk the streets of circular economy means closing some production lines and/or services and opening others. The balance remains positive, however: according to the European Commission's assessment, in the area of waste management alone you could create 178.000 new jobs by 2030.
Advantages for families
A report of Ellen MacArthur Foundation has also tried to quantify the savings resulting from the implementation of circular economy. This would produce savings in the form of lower costs of primary resources, those related to the use of the products (for example, for the maintenance of the vehicles, if these were shared) and those associated to external effects such as congestion and gas emissions greenhouse, which should be reduced drastically.
The report found that the savings would accumulate mainly in favour of families, which would enjoy an average of 11% of disposable income in more thanks to the efficiency of circular economy. This would allow an increase in expenditure of at least 7% of GDP by 20303.