Re-Thinking Our Economy: Leaning on a Circular Economy Model

By the year 2050, world population is expected to reach almost 10 billion people according to research by the United Nations. In addition, it is projected that more people will join the middle class resulting in enhanced human well being globally. Despite these improvements in socioeconomic and demographic developments and their associated benefits to individual prosperity, humans will have to exert further pressure on the limited and already depleting natural resources to keep the status quo.

Additionally, calculations reveal that with the current way of global production and consumption patterns we already need 1.7 planet Earths and humans’ ecological footprint is only projected to increase. From these numbers,it becomes evident that society needs to find responsible and sustainable ways to meet individual needs, establish economic growth and secure the demands of future generations, all within the ecological boundaries of the planet. Thus, this requires us to rethink our current economic models.

Sustainable Development Goal 12 for Responsible Consumption and Production

The urgency to reduce our ecological footprint through changing current production and consumption patterns is formulated in Sustainable Development Goal 12: Ensure Responsible Consumption and Production. SDG 12 is one of the 17 Sustainable Development Goals, which is a framework that can be considered as the world’s strategy to address the global economic, social and environmental challenges our planet is currently facing.

With the forecasts of a rising world population, an acceleration of global development and the related rising demand and usage of resources, SDG 12 underlines that business, as usual, is not an option for a sustainable future. More and more businesses have become aware of these sustainability issues and along with increased societal pressure, corporations have started to explore alternative ways of doing business.

The pursuit of businesses towards more sustainable business practices and processes has led to the emergence of new and innovative sustainable business practices and models, including the circular economy business model.

Moving from a linear to a circular economy

The circular economy framework is an alternative to the common, traditional linear economy, and requires a shift from a ‘take, make and dispose’ economy, to a ‘reuse, redesign and regenerate’ production model. In this latter model, waste streams are considered as input for new products and processes.

The circular economy model follows the following three principles:

  1. Design out of waste and pollution
  2. Keep products and materials in use
  3. Regenerate natural systems

Moreover, this economic model is a response to the worldwide growing waste streams and the increasing pressure on natural resources. By circulating resources again and again through closed loops, the maximum value of resources is extracted.

Upcoming circular business models are turning trash into treasure

The circular economy model has been researched and praised already by many organisations in developing countries, especially within Europe. Nextto that, it has become part of various corporate strategies and has been adopted in numerous business models.

Global sportswear company PUMA is one of the companies that has been experiencing with circular product lines a few years ago. They launched a certified Cradle-to-Cradle product line, which included a shoe, shirts, a jacket and a backpack. The shoe, for example, is entirely made from organic cotton, linen and bio plastic, which PUMA promises to shred and compost it when customers recycle the shoe.

In contrast, this new economic model just started to gain attention in Africa with the launch of the African Circular Economy Alliance at the end of 2017, initiated by Rwanda, Nigeria and South Africa in cooperation with World Economic Forum and Global Environment Facility. This alliance was started to fast-track the adoption of the circular economy model here in Africa. There is a lot of potential in Africa to adopt a circular business model, as waste management in many countries is still an issue, making it a perfect chance to deal with this challenge.

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