New economics for sustainable development

At the macroeconomic level, a circular economy implies the decoupling of economic growth from the use of natural resources and inputs. Ideally, the rate of resource extraction ought to remain below the rate of resource consumption, and the rate of waste production ought to remain below the environment’s ability to absorb and transform the waste. A circular economy can also be seen as a regenerative system in which resource input and waste, emissions, and energy leakages are minimized through long-lasting design, maintenance, repair, reuse, sharing, remanufacturing, refurbishing, and recycling activities. Global economic consumption and production does not exist within a vacuum but relies on resource stocks and flows in our Earth System, acting as a limit to growth. By managing stocks and flows appropriately, and helping to preserve, restore and develop environmental and natural capital, a circular economy contributes to a steady system state, minimizing the risks from resource depletion. While there is not yet an internationally agreed definition of a circular economy, the description of the United Nations Environmental Assembly (UNEP/EA.4/ Res.1) provides a shared understanding of some of its basic principles. A circular economy is presented as “one of the current sustainable economic models, in which products and materials are designed in such a way that they can be reused, remanufactured, recycled or recovered (4-R) and thus maintained in the economy for as long as possible, along with the resources of which they are made, and the generation of waste, especially hazardous waste, is avoided or minimized, and greenhouse gas emissions are prevented or reduced”. The definition highlights the 4-R framework for making the circular economy possible through more resource efficient processes, with life cycle considerations, and the prevention of programmed obsolescence. A circular economy thus provides an alternative to the “take-make-waste” linear model. Such an alternative is based on the sustainable management of natural resources, the closing of material loops, the preservation of natural capital, and circular consumption and production behaviors in the economy. Another definition from The Ellen MacArthur Foundation proposes three key aspects: the elimination of waste and pollution, keeping products and material in use, and regenerating natural systems. Emphasis is made on the systemic character of this approach to economic development, which can benefit businesses, society and the environment while decoupling growth from the consumption of finite resources. While the concept of the circular economy is inspired by the physical features of a closed material circulation system, the economic aspects remain critical for policy operationalization. Kircherr et al. (2017) note that current definitions of the circular economy have gaps in relation to the system’s perspective, business models and consumer behavior. Closing material loops is not sufficient, as it depends on its effect on effective consumer demand. Real progress takes place when circular initiatives (such as the use of secondary materials) displace linear ones, not when they coexist. Practical applications and regulatory frameworks for the circular economy need to ensure that producer and consumer behaviors support circularity at the macro and micro levels.

source :
https://www.un.org/sites/un2.un.org/files/circular_economy_14_march.pdf