The Circular Economy Wiki
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Adapted from Towards a Circular Economy, Ellen MacArthur Foundation, January 2012, page 7.

For technical cycles (the flow of non-biodegradable materials) the circular economy largely replaces the concept of a consumer with that of a user. The act of consumption suggests destruction or exhaustion whereas the technical material is here seen as something to use over extended periods of time. The proliferation of ‘users’ calls for a new contract between businesses and their customers based on the performance of the product. Unlike in today’s ‘buy-and-consume’ economy, durable products are leased, rented, or shared wherever possible. If they are sold, there are incentives or agreements in place to ensure the return and thereafter the reuse of the product or its components and materials at the end of its period of primary use.



These principles all drive four clear-cut sources of value creation that offer opportunities in comparison with linear product design and materials usage: they are described collectively as the power of circles.

  1. The ‘power of the inner circle’ refers to minimising comparative material usage vis-à-vis the linear production system. The tighter the circle, i.e., the less a product has to be changed in reuse, refurbishment and remanufacturing and the faster it returns to use, the higher the potential savings on the shares of material, labour, energy, and capital embedded in the product and on the associated rucksack of externalities (such as greenhouse gas (GHG) emissions, water, toxicity).
  2. The ‘power of circling longer’ refers to maximising the number of consecutive cycles (be it reuse, remanufacturing, or recycling) and/or the time in each cycle.

  1. The ‘power of cascaded use’ refers to diversifying reuse across the value chain, as when cotton clothing is reused first as second-hand apparel, then crosses to the furniture industry as fibre-fill in upholstery, and the fibre-fill is later reused in stone wool insulation for construction – in each case substituting for an inflow of virgin materials into the economy – before the cotton fibres are safely returned to the biosphere.

  1. The ‘power of pure cycles’, finally, lies in the fact that uncontaminated material streams increase collection and redistribution efficiency while maintaining quality, particularly of technical materials, which, in turn, extends product longevity and thus increases material productivity.

Ricoh's Comet Circle (http://www.ricoh.com/environment/management/concept.html)

These four ways to increase material productivity are not merely one-off effects that will dent resource demand for a short period of time during the initial phase of introduction of these circular setups. Their lasting power lies in changing rate of intake of required material over any time period. They can, therefore, add up to substantial advantages over a classical linear business-as-usual case.

When shifting from linear to circular approaches, the rule of thumb for optimisation is: ‘the tighter the reverse cycle, the less embedded energy and labour are lost and the more material is preserved’. Today’s recycling processes are typically ‘loose’ or long cycles that reduce material utility to its lowest ‘nutrient’ level. This is even more true for the incineration of waste. In a circular economy, by contrast, reverse activities in the circular economy will extend across an array of circles for repair and refurbishment of products, and remanufacturing of technical components.

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