Circular economy, a model that protects the environment

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“Scientists of the world alerting humanity” was the title of a letter, written in 1992 by the Union of Concerned Scientists, and another 1,700 independents. In it, they expressed concern about the destruction of the ozone layer, climate change, the extinction of species, and the growth of the human population.

Now, 25 years later, more than 15,000 researchers from 184 different countries have issued a second warning. In this letter, they reviewed the same concerns, but also addressed current problems.

Except for the stabilization of the ozone layer, the rest of the environmental problems are getting worse.

Among other data, temperatures reached unprecedented levels, and the planet’s average temperature is estimated to exceed the three-degree barrier by 2050. The amount of fresh water available has also been reduced by 26%, while the human population has grown by 35%. Also, the loss in the number of mammals, reptiles, amphibians, birds, and fish is estimated at 29%.

In fact, there is already talk of climate refugees. According to the United Nations, there are more than 64 million people displaced due to the effects of climate change, mainly from African countries, impoverished and affected by natural disasters. Also, the United Nations Refugee Agency (UNHCR) estimates that global warming could drive 1,000 million people into exile in the near future.

It’s not a good start, is it? Well, it’s not all bad news. Society has improved with positive individual changes to the environment, such as awareness of recycling or reducing extreme poverty.

In the letter, the scientists point to three aspects that we should consider:

  1. We should make decisions based on scientific knowledge
  2. We should understand that the fossil-free economy is already a profitable business
  3. And encourage optimism

According to these scientists, during this article, we set out to fulfill the second objective, and we also mixed it with a little optimism, explaining what it is and what are the technological innovations that the circular economy brings us.

·  What is the circular economy

As you know, we live in a linear economic system. Conceptually, we have the phases of extraction, manufacture, use, and disposal.

Let’s take an example so that you can understand better: a smartphone.

For you, as a user, to buy the product, the company will have to extract resources and refine them, transforming them into ready-to-use materials, only then to manufacture the parts that will be used to assemble the final product, in this case, a smartphone.

This device will last for some time, but it will inevitably stop working, and you will have to throw it away.

Also, all phases of this process produce more waste, pollute, and consume energy from sources that also pollute.

Could this be worse?

Yes, because when the product no longer works, the process is activated again, going through all phases, depleting natural resources, generating pollution, and accumulating more useless waste.

What if we could convert this waste into resources for other people?

The answer lies in the circular economy.

The concept of circular economy aims to change the linear system of production and consumption, to disassociate the use of natural resources and the negative externalities of well-being and development.

It is an innovation of our system that aims to maintain and strengthen socioeconomic development, generate new jobs and be sustainable with natural resources, to protect present and future generations.

Following the example and under the circular economy system, the smartphone could be easily repaired.

Initially, this fact means we would have one less device, reducing the amount of waste. This means less pollution and more resources! But, besides being fixed, the smartphone could be updated.

With this, the company will continue to earn money, and you will receive improvements on the device, camera, battery, etc. With these updates, the phone will only go through the manufacturing phase once (they will only need to add new chips and assemble it again), saving natural resources.

Therefore, we will have an updated phone again, saving money for the user, but above all, saving resources and reducing pollution.

Even when a product can no longer be updated, it can be recycled.

Thus, all this material will be reused in other products.

Again, without going through the extraction phase, which will be vital for the environment.

· Advantages of the circular economy

You will be wondering what the benefits of this system are, although you have also seen some information above. First, as the materials were recycled, the circular economy helps to reduce the use of natural resources. This also helps to limit energy consumption.

Likewise, the circular economy generates wealth and employment.

According to the report “Towards the circular economy: economic and commercial reasons for an accelerated economic transition,” prepared by the consulting firm McKinsey & Company for the Ellen McArthur Foundation, the European industrial sector could save some 650 billion euros and create tens of thousands of jobs.

5 reasons to bet on the circular economy

  1. The limits of the linear system. The linear economy is not sustainable, and we all know that. This generates waste of resources and money.
  2. The circular economy supports the environment and helps to combat climate change. Closing the life cycle of resource use will reduce environmental pollution resulting from new production. According to the European Commission, the circular economy could reduce total annual greenhouse gas emissions by between 2% and 4%.
  3. It will reduce economic dependency and the price of raw materials. Raw materials like gold, silver, copper, tungsten etc. are not only increasingly scarce, but also concentrated in a few countries. In addition to avoiding the scarcity of raw materials, the final price of the product will be reduced.
  4. New economic activities and new jobs. According to the European Commission, a good circular economy policy could generate a GDP increase of between 2% and 7% and more than 500,000 direct jobs.
  5. Competitive advantage in globalization. The circular economy allows us to obtain a competitive advantage in the context of globalization since it reduces the dependence on external supplies.

· Companies and the implementation of the circular economy

Everything seems too idyllic, right? An innovative system with more than notable advantages for the environment, reduction in the unemployment rate, the well-being of society… If the circular economy  is so positive, why is it not implemented? If this is the question you are asking yourself, the answer goes through a word: Disinformation. Although many companies and governments continue to support the linear system, a few years ago, we began to see a small boom in initiatives, both private and public, that demonstrates (with future investments) that things are starting to change.

For many, digitization is fundamental in the process of implementing more environmentally friendly strategies.

Trends such as big data favor the complete traceability of materials, with information about the history and how we can take advantage of them. We can’t ignore that specific collaborative platforms already make better use of existing resources, avoiding the production of more goods than necessary.

Although many products were previously bought and sold (for example, cars or apartments), they are now marketed as a service (think about BlaBlaCar or Airbnb).

The Internet of Things (IoT) is also intended to play a key role in the implementation of the circular economy.

In the not too distant future, smart devices, connected and integrated, will be tasked with monitoring the status of their components and determining their usefulness. If we extend the use of IoT to Smart Cities, we can track all elements of the urban space to optimize the use of materials and energy, in favor of efficient and sustainable waste management.

We also find initiatives by Administrations committed to this system. At the European level, for example, the European Commission adopted, at the end of 2015, an ambitious package of measures on the subject, which includes an action plan that seeks a transition to a circular economy with more opportunities for Europe and its citizens. A year later, at the end of 2016, the Investment Plan for Europe had already mobilized investments worth 164 billion euros.

In Spain, for example, the Foundation for the Circular Economy stands out.  Companies are collaborating with world experts, public administrations, private entities, and social agents to work on the study, reflection, reconciliation, and action in the circular economy, sustainability, use of resources, and the environment.


After analyzing the implementation of the circular economy model in Europe and how technology can become its best ally, it remains only to ask what should be the evolution of a concept that, like many others can be derived for processes and businesses in which the e-commerce, remarketing, or optimization of logistics processes can play a key role.

Translated by Micheli.

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