Waste is the highest virtue one can achieve in an advanced capitalist society [] waste puts an extra spin in the global economy. If you put an end to all the waste, the global economy would go haywire. It was not an economist who said these words, but the famous Japanese author Haruki Murakami. Yet, economists could hardly disagree with this quote, as economic prosperity is often associated to large amount of waste: one only has to think of the fact that the wealthiest economies produce an amount of waste per capita which is at least twice as large as the amount produced in developing countries.

Often, it seems that the very products we buy are designed to last no longer than certain period of time: it has been argued that products such as iPhones are designed to stop working and become waste in a given period of time, a process called ‘planned obsolescence’ which leads people to switch phones every two years. As a result, waste accumulates, polluting the environment and putting our planet’s resources under severe strain. The million- dollar question that arises from this, therefore, is:

is it possible to ensure economic prosperity and welfare without compromising our planet’s limited resources?

One answer to this question has been provided by the circular economy model: an alternative to traditional economic models based on the recycling and reutilisation of goods and resources. In contrast to the linear and extractive model of production of “make, use, waste”, the circular economic model is based on the idea of keeping products and materials in use, promoting the sharing and reuse of goods for as long as possible, and the recycling of materials afterwards. Based on these ideas, the circular economy redefines the concept of growth and makes it possible to see economic prosperity combined with environmental well-being.

is it possible to ensure economic prosperity and welfare without compromising our planet’s limited resources?

How can this model be implemented in practice? There are several ways for the economy to operate in a way that reduces waste, promotes the reutilisation of goods and materials, and allows for natural systems to regenerate and thrive. Creating products that last longer and that can be easily repaired is one way of doing so. For example, if you want a phone that doesn’t have a two-year life expectancy, instead than buying an iPhone you can opt for Fairphone. Fairphone is the product of a Dutch social business that applies principles of the circular economy to its production, in particular by creating phones with a modular and repairable design. Every part of the phone can in fact be easily replaced if broken, with a single screwdriver: not by chance Fairphone is the only smartphone in the world to be awarded a perfect score for repairable design by iFixit.

Another way to implement circularity in the business model of firms is by promoting the sharing of goods among several users. How many people could in fact use that expensive and beautiful dress you bought for your cousin’s wedding and never used again? This is the question that led to the creation of Rent the Runway, a platform that allows women to rent designer items for a relatively small price, to wear on special occasions and then be used by other women. The retail industry is currently the second- largest polluter in the world, and Rent the Runway’s idea for changing this is to promote a paradigm of the sharing economy: as explained on their website in very simple words, more people sharing clothes means less clothing waste.

These two examples of firms implementing principles of the circular economy into their business models show the potential of this economic paradigm: not only the circular economy can be easily implemented in practice, but it also has the potential of making businesses and firms that adopt this model very profitable and successful. However, for this to happen, it is also crucial that we change our approach to how we buy and consume products. In fact, a firm that produces goods that are more durable and that don’t need to be often changed is inherently less profitable than a company that sells goods that every two years need to be changed and purchased again: in a way, it can be argued that it is counter- productive for a firm to make longer-lasting goods. Therefore, the role of consumers is crucial: if we support businesses that adopt principles from the circular economy and produce goods that are more durable and sustainable, a paradigm shift in production will occur more quickly and successfully.

Here you can find out more about the Circular Economy