What is the circular economy and why is it important?

Since the obscenity days of the Industrial Revolution, humanity has embraced a linear model of economics, which involves extracting resources from the Earth, making things out of them, and disposing of those things when they become surplus to requirements.

This model has some merit in that it has created jobs and improved living standards for many people, but it has also created the climate crisis, caused the loss of biodiversity and left mountains of waste. As a result, a growing number of people, from economists to businessmen, now consider that the linear model is not suitable for their purpose.

Enter the principle of the circular economy, which twists the planet by destroying the linear model in a loop by eliminating garbage entirely or treating it as a resource.

Circularity was a fringe issue a decade ago, but not anymore. The EU recently launched its Circular economic action plan to tackle waste, while pioneering brands like Nike, Unilever and Stella McCartney have also embraced circularity principles.

But it is agile startups that are developing perhaps the most innovative products, which are recognized in the annual Green Alley Award, The first European competition for circular startups. Martin Wright, president of Positive News and a Green Alley award judge, believes that turning trash into treasure is a matter of human survival.

“We can’t keep sucking up finite resources and dumping waste and expect to have an environment where we can thrive,” he says. “We are running out of resources and without ways to eliminate waste that do not cause problems. The climate emergency is simply the most dramatic example of the impact of an overly linear take-do-waste economy. “

For a lesson in circularity, Wright says we must look at nature. “Nature itself is a circular economy in action,” he explains. Nothing is wasted. Plants flourish, wither and die, and become compost and food for other creatures. “

the past winners and finalists of the Green Alley Award They are disruptive startups that have closed a loop when it comes to waste. Brands such as LivingPackets, which create reusable envelopes and packages, and Gelatex Technologies, which convert organic waste from the livestock industry into a material that rivals leather.

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While startups are showing what can be accomplished with things we previously dismissed as waste, Wright says politicians must also act by incorporating smart regulation to help unlock the potential of the circular economy.

“We can foster a more circular economy through a combination of regulation and tax incentives,” he says. “Reformulating the second so that we record what we don’t want (pollution), not what we do (jobs), would be a start. In an ideal world, we would price carbon in line with science-based targets to keep global warming below 1.5 degrees. “

Businesses, he adds, also have a role to play. “Businesses must do what they do best: seize the business opportunities found in the circular economy and pressure governments to put in place regulations that encourage them to do so, penalizing wasteful business models.”

Artificial intelligence (AI) also has the potential to accelerate our shift to the circular economy, says Wright, although safeguards must be put in place to protect jobs and ensure that those who lose theirs to machines are retrained. “Get it right and AI could drive a fourth industrial revolution,” he says.

Nature is a circular economy in action. Nothing is wasted. Plants flourish, fade and die, and become compost and food for other creatures.

AI has great potential to eliminate waste in the energy industry, says Wright, who says it could be used to make the grid more efficient by ensuring exactly the right amount of power is available when and where it’s needed.

“The millions of financial transactions involved would be handled smoothly thanks to the secure connections of the blockchain and the Internet of Things,” he says. “In turn, this would make a whole range of energy innovations viable, such as ‘solar sprays’ to turn every exterior surface of a building into a power plant.”

Wrights says there will be many more ideas for where they come from at the next Green Alley Award, which is open for entry until November 17.

Lead Image: Green Alley Award