Circular Economy

Principle 1- Design out waste material

Circular economy reveals and designs out the negative impacts of economic activity that cause damage to human health and natural systems.

Including the release of greenhouse gases and hazardous substances, the pollution of air, land, and water, as well as structural waste such as traffic congestion.

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Principle 2- Keep products and materials in use

Circular economy favours activities that preserve value in the form of energy, labour, and materials. This means designing for durability, reuse, remanufacturing, and recycling to keep products, components, and materials circulating in the economy.

Circular systems make effective use of bio-based materials by encouraging many different uses for them as they cycle between the economy and natural systems.

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Principle 3- Regenerate natural systems

Circular economy avoids the use of non-renewable resources and preserves or enhances renewable ones, for instance by returning valuable nutrients to the soil to support regeneration, or using renewable energy as opposed to relying on fossil fuels.

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Economic Benefits

The circular economy has been gaining traction with business and government leaders alike. Their imagination is captured by the opportunity to gradually decouple economic growth from virgin resource inputs, encourage innovation, increase growth, and create more robust employment.

If we transition to a circular economy, the impact will be felt across society. 

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Economic Benefits- Economic Growth

Economic growth (GDP), would be achived mainly through a combination of increased revenues from emerging cicular activities, and lower cost of production through the more productive utilation of inputs. 

These changes in inout and output of economic production activities affect economy-wide supply, demand and prices.

It ripples accross the sectors of the economy adding to overall econmic growth.

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Economic Benefits- Material Cost Savings

In sector of complex medium-lived products (mobile phones and washing mahcines) in the EU, annual net-material cost savings opportunitity amounts up to $630 billion.

For fast moving consumer goods (house hold cleaning products), material cost-saving potential up to $700 billion globally.

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Economic Benefits- Job Creation Potential

Employement impacts of a cicular econmy transition points to "positive employment effect occuring is implenmented." 

Impact of employment is largley due to increased spending fuelled by lower prices; high- quality, labour-intensive recylcling activities; and higher skilled jobs in remanufacturing.

New jobs will be created accross industrial sectors, within small and medium enterprices, through increased innovation and entreprenuership and new service-based economy.

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Economic Benefits- Innovation

Replacing the linear products and systems with circular ones is a big creative opportunity.

Higher rates of technological development, improved materials, labour, energy, efficiency and more profit oppotunities for companies.

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Environmental & System-Wide Benefits

By designing out waste and pollution, keeping products and materials in use, and regenerating, rather than degrading, natural systems, the cicular economy can be a mechnanism by which we achieve global climate targets.

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Environmental & System-Wide Benefits - Consumption

Could lead to a reduction of primary material consumption (car and construction materials...).

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Environmental & System-Wide Benefits - Land produc

Higher land productivity, less waste in the food chain value, and the return of nutrients to the soil will enhance the value of land and soil as assets.

By returning biological material back into the soil, the circular economy will reduce the need for replenishment with additional nutrients.

This is a principle of regeneration at work.

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Environmental & System-Wide Benefits - CO2 emissio

In Europe, CO2 emissions could down by 2030.

UK could reduce greenhouse gass emissions by 7.4 million tonnes per year by keeping organic waste out of landfills.

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Opportunity for Companies

Businesses would benefit significantly by shifting their operations in line with the principles of the circular economy.

These benefits include the creation of new profit opportunities, reduced costs due to lower virgin-material requirements, and stronger relationships with customers. 

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Opportunity for Companies- Profits

Businesses could lower costs and create new profit streams.

  • Cost of remanufacturing mobile phones could be reduced by 50% per device.
  • High-end washing machines could be leased instead of sold- consumers would save roughly a 3rd per wash, manufactures would earn roughly a 3rd more in profits.
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Opportunity for Companies - Improved consumer inte

New business models, such as rentals or leasing contracts, establish longer-term relationships, as a number of touch points increases over the lifetime of a product.

Could gain insight into usage pattern, leading to improved products, better services and greater customer satisfaction.

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Opportunity for Individuals

Ranging from increased disposable income to improved living conditions and associated health impacts, the benefits for individuals of a system based on the principles of circularity are significant.

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Opportunity for Individuals - Increased disposable

The cost of services and products would be reduced and there would be less unproductive time (time stuck in traffic).

Average disposable income for EU households would increase by EUR 3000 by 2030.

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Opportunity for Individuals - Greater utility

For consumers this may be enhanced by the additional choice or quality that cicular models provide.

Customer choice increases as producers tailor products or services to better meet customer needs.

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Opportunity for Individuals - Reduced obsolescence

For customers, overcoming premature obsolescence will significantly bring down total ownership costs and deliver higher convenience as they would avoid hassles associated with repairs and returns.

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Opportunity for Individuals - Health

Could lower healthcare costs associated with pesticide use by $550 billion globally.

Significant reductions of antimicrobial resistance, air pollution, water contamination, and foodborne diseases.

Could save 290,000 lives otherwise lost to outdoor air pollution per year, by 2050.

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