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Circular Economy Circular Economy

Circular Economy

We have been more than 150 years old, since the Industrial Revolution, with an economic model based on the extraction of natural resources for the manufacture of products and services. Once its use has ended, consumer goods are discarded as waste. This system is known as linear economy and is based on the hypothesis that there will always be natural resources to meet consumer demand.

However, the growth of the world population, the increase in the demand for consumer goods, the technological revolution and the limitation of natural resources provoke a necessary rethinking of this linear model. Faced with this culture based on "extract, manufacture, use and throw away", the circular economy emerges, as a new economic model that imitates the natural life cycle, where nothing is wasted.

Circular economy implies the use of resources in a more environmentally friendly way and "closing the loop" of the life cycle of consumer goods, favoring repair, reuse and recycling. In this paradigm, waste does not exist, it is valuable resources that have a utility.

On a circular path, European GDP could grow up to 11% by 2030 and 27% by 2050, compared to the percentages of 4% and 15% in the current scenario

Benefits of the Circular Economy

This perspective provides environmental, social and economic advantages. Circular economy also speaks of eco-design, of collaborative economy, of extracting the maximum value and performance from products, services and resources, of saving energy and of reducing greenhouse gas emissions, causing climate change.

One of the most outstanding international references in this field is the Ellen MacArthur Foundation: considering that the linear consumption model is unsustainable in a world where natural resources are limited, the Foundation promotes circular transition and quantifies its economic benefits in various studies. In their report Towards the Circular Economy several examples of these opportunities are shown:

  • Economic growth: on a circular path, European GDP could grow up to 11% by 2030 and 27% by 2050, compared to the percentages of 4% and 15% in the current scenario.
  • Material cost savings: Annual material cost savings would amount to $ 630 trillion, 8% of annual business volume. For high-turnover consumer goods, an additional potential of up to $ 700 trillion is calculated globally.
  • Job creation: Encouraging the use of recycled materials could create 100,000 new jobs in the next five years.

Europe takes the reins

Aware of the importance of the circular economic model, the European Commission has adopted an ambitious package of measures, ranging from production and consumption to waste management. To do this, it will mobilize 5.5 billion euros for waste management and 650 million euros under the Horizon 2020 program for investments in the circular economy.

Whether it is a commitment to reduce environmental impact, an increasingly demanding environmental regulatory framework or the opening of new markets, the circular economy has become an opportunity that companies cannot miss.