Circular Economy: Recent Practices and Potential Issues

Circular economy has become a trendy concept over recent years. Instead of continually performing the “take-make-dispose” philosophies, several pioneers have come up with solutions to make our life more sustainable.

The National Zero Waste Council has collected some notable business models for circular approaches. The “products-as-a-service” model enables people to enjoy service rather than ownership. For instance, instead of buying light fittings, the customers can now buy the service of light. The manufacturers will go to people’s houses and change the fittings whenever a more efficient product is released, and recycle the old materials.

This image was taken from the Ted Talk delivered by Ellen MacArthur: The surprising thing I learned sailing solo around the world.

Also, the “product-life extension” model encourages upgrading and repairing used components of products. For example, engines do not necessarily have to be abandoned when it is broken. Instead, if people make the parts of engines re-manufacturable, they only have to change parts in order to make the machine well-functioned. Additionally, people do not have to throw away the entire toothbrush when they need a new one. Changing the brush is enough to satisfy people’s need of cleaning.

For the most part, I agree with the above approaches that the National Zero Waste Council has mentioned in their blogpost. However, I would also like to challenge the effectiveness of implementing these initiatives in real-world practices. In the post, while the senior managers of Dell eventually oversees the benefit of using recycled materials to manufacture products, not every managers in other firms will react upon these benefits. Since the performance of managers are mostly been evaluated in short-term scales, these decision-makers may favour not-so-sustainable-but-cost-effective methods of production. To sum up, the ideas are good, but the company have to redesign reward system for managers to act in a way that aligns with the companies’ long-term interests.

This image is taken from the article “Sweden is paying people to fix their belongings instead of throwing them away” by World Economic Forum.

In contrast, governments might be able to exercise circular economy with less concerns. In this article, World Economic Forum explores Swedish government’s approach of reducing greenhouse gas emissions by nudging consumers’ choices. The government offers a tax break for fixing machines and clothes. This policy is expected to bring not only consumer’s shift in buying more high-quality, long-term functional products, but also a decrease in unemployment, which unemployed people can get jobs easily from fixing things. The government has successfully provided a reward system(tax-break and employment) for people, so it has less issues in implementing circular economy than private sectors.

To conclude, while the idea of conserving resources are beautiful, this piece will serve as a friendly reminder for people who wish to do so to examine the reward system within their firm before assigning budgets of implementing these ideas. Circular economy can be expensive at first, but there are ways to minimized potential costs.