The circular economy

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STAHEL W.R., The circular economy, Nature, 23.03.2016

Topics Circular Economy


“Quality is still associated with newness not with caring; long-term use as undesirable, not resourceful.”

“Cycles […] abound in nature”. Humans continue to prefer the make-use-dispose model, the linear model.

“People […] are central to the [circular] model”.

“Ownership gives way to stewardship”. “Selling services rather than goods is familiar in hotels and in public transport; it needs to become mainstream in the consumer realm.”

The circular economy idea “collides with the silo structures of academia, companies and administrations. For economists who work with gross domestic product (GDP), creating wealth by making things last is the opposite of what they learned in school”.

“Governments and regulators should adapt policy levers, including taxation, to promote a circular economy in industry.”→ Policy variable.

“There are three kinds of industrial economy: linear, circular and performance.” Linear economy: make-use-dispose; “At the point of sale, ownership and liability for risks and waste pass to the buyer (who is now owner and user).” Circular economy: “The reprocessing of goods and materials generates jobs and saves energy while reducing resource consumption and waste”. Performance economy: “A performance economy goes a step further by selling goods (or molecules) as services through rent, lease and share business models. The manufacturer retains ownership of the product and its embodied resources and thus carries the responsibility for the costs of risks and waste. In addition to design and reuse, the performance economy focuses on solutions instead of products, and makes its profits from sufficiency, such as waste prevention.” “Services liberate users from the burden of ownership and maintenance and give them flexibility.” “Such business models jeopardize the fundamentals of the linear economy — ownership, fashion and emotion — and raise fears in competing companies.”

“Designing products for reuse needs to become the norm, making use of modular systems and standardized components, for instance.”

“Communication and information strategies are needed to raise the awareness of manufacturers and the public about their responsibility for products throughout their service lives.”

“Policymakers should use 'resource-miser' indicators such as value-per-weight and labour-input-per-weight ratios rather than GDP. Policies should focus on performance, not hardware; internalization of external costs, such as emissions and pollution, should be rewarded; stewardship should overrule ownership and its right to destroy. The Internet of Things (in which everyday objects are digitally connected) and Industry 4.0 (intelligent technical systems for mass production) will boost such a shift, but also demand a policy review that considers questions of ownership and liability of data and goods”. → Policy-making/legal variable.

“[...] promoting business models that are based on full ownership and liability, and that are unlimited in time, rather than imposing a two-year warranty for manufacturing quality [...]”.