Entering into a new economic model might take decades, yet signs of resource depletion indicate that we haven’t got years before changing our consumption patterns while protecting our standards of living. The concept of Circular Economy in itself is mind-blowing as it imitates natural cycles through feedback loops at several levels of our current extraction, production and consumption chains. The main objective of a circular framework is the decoupling of our resource intakes versus our thirst for constant economic growth – as returns always need to be higher than the original investment -.
Contrary to the linear corporate strategy, where value was created from a one-off product sales tactic, a circular strategy is based on addressing several eco-systemic challenges. By embedding externalities (pollution, climate impact, resources gap, financial risks, etc) into new set of services, we not only generate value to the company and its shareholders, but also to every single entity gravitating within our stakeholder map – customers, suppliers, etc. – but also outside of it – the state, municipalities, associations, non-governmental organizations as well as other companies and entities as part of the wider economy.
Aligning our economic world with natural cycles seems to be the right (and wise) thing to do. Do we understand well-enough the in-depth changes – such as changing our ways to consume, to travel, to work, to earn a living to name a few – that we will have to provoke? We must think beyond just a circular economy as it is designed today with the same corporate powerful actors, in the same financial paradigm, replicating current human interactions and power relation. The same narrow-minded corporate objective without putting the people at its core first, will not deliver our intentions with a circular economy. A complete redesign of the economy is required to rebalance all the five dimensions of our wealth: our natural, social, human, manufactured and financial capital. These assets interact in complex ways to produce all human benefits. Ultimately, human, social and produced assets depend on natural assets – natural capital is the irreplaceable basis of our prosperity.
Fostering system effectiveness by revealing and designing out negative externalities.
This includes reducing damage to human utility, such as food, mobility, shelter, education, health, and entertainment, and managing externalities, such as land use, air, water and noise pollution, release of toxic substances, and climate change. Currently, most of these hidden values (and their loss) are not reflected in government decision-making or in market prices. This means producers and consumers enjoy the benefits of economic activities that damage the environment, while the costs are borne by society as a whole and, in particular, by poorer people and future generations. Policies and prices should take full account of the hidden value of nature, to ensure fairer and more sustainable use of these resources.
Optimize resource by circulating products, components, and materials at the highest utility at all times in both technical and biological cycles.
By means of designing for remanufacturing, refurbishing, and recycling to keep components and materials circulating in and contributing to the economy. Circular systems use tighter, inner loops whenever they preserve more energy and other value, such as embedded labor. These systems also keep product loop speed low by extending product life and optimizing reuse. Sharing in turn increases product utilization. Circular systems also maximize use of end-of-use bio-based materials, extracting valuable bio-chemical feedstocks and cascading them into different, increasingly low-grade applications.
Ensuring that services are accessible, affordable and generating bottom-line benefits.
People need to be at the circular core, not at its periphery. An inclusive economy is central to a model where value creation starts with implementing a well-balanced society for all, any societies, anywhere. Poverty and exclusion should therefore be designed out of our system at the same time in a very versatile system copying nature. The eradication of poverty and fair distribution of resources are central to discussions. Equity is not merely an abstract moral debate: it is fundamental to our hopes for political collaboration and collective action in the transition to sustainable economies
Designing financial exclusion out. Developing financial ability is a priority where one can access more with less as even with a low income, a decent life can still be possible.
In a service-based world where systems externalities are embedded keeping people in the economy becomes a priority. Diversified accesses to means of exchanges are preferred and would unleash huge self-potential for financial abundance. The higher the diversity of exchange options the better for multiplying opportunities. The aim is to grant access to a resource that is not widely available and lowering economic entry barriers of our current linear model in a specific area. Ensuring it follows the principles of using renewables, designing versatility of services, and granting education, training, skills and financial package (affordability).
Micro Feedback Loops
Based on the principle of system thinking applied at micro-economic level on societies, one could leverage on natural, affordable and/or cultural solutions to address social/environmental/economic challenge(s). By introducing one or more new elements into a system, they could create feedback loops that will increase its resilience, and often create a thriving context for the beneficiaries, previously locked-in in a one-way thinking. These new elements will provoke mutual benefits (endless energy, affordability, versatility, etc.) by generating positive ripple effects. This includes the sharing economy whereby you access a good-as-a-service in a shared cost approach.
Fostering eco-innovation is to significantly speed up the development and diffusion of technological improvements that will curb growing pressures on the environment, and keep the future cost of doing so manageable. Green innovations often emerge in niches at the margins of mainstream activities; innovations can occur at any point in systems of production and consumption, and interventions at one leverage point can influence change across the system as a whole. Innovations face many challenges: breaking into the mainstream, including the resistance to change of established social norms and economic and policy frameworks; lack of knowledge and financial resources; and inadequate mechanisms to promote the spread of new ideas and practices.
Through carefully designing our products and services, through focusing on nurturing and caring for all the elements that we invented for the right functioning of our economy, and with the understanding that all these elements and sub-parts thereof have a specific role to play within it, this set of principles and concepts intend to regenerate our economy by a sound comprehension and alignment with environmental patterns – and not to limit ourselves to them, i.e. if we align ourselves well with these configurations, there is barely no limit to endless innovation!