I am currently participating in a four-week Circular Economy course. The Circular Economy is an overall philosophy incorporating multiple methods like Cradle-to-Cradle, Biomimicry and the performance economy.

“A circular economy seeks to rebuild capital, whether this is financial, manufactured, human, social or natural. This ensures enhanced flows of goods and services. The system diagram illustrates the continuous flow of technical and biological materials through the ‘value circle’.”[1]

The Ellen MacArthur foundation made a interactive system diagram, click on the definitions in the diagram to read more about them.

A video explanation of the diagram made by Joe Iles (Digital Marketing Coordinator at the Ellen MacArthur foundation) can be found here.

System thinkingThe circular economy is based on the closed loop model. Looking at the materials used during production and use them in such a way they do not generate waste but are nutrients for other products.“The closed loop model is a biomimetic (life-imitating) approach, a school of thought that takes nature as an example and considers that our systems should work like organisms, processing nutrients that can be fed back into the cycle – hence the “closed loop” or “regenerative” terms usually associated with it.”[2]

The closed loop model relies on five founding principles[3]:

Waste is food

Eliminate waste. The biological and technical component parts (nutrients) of any product should be designed for disassembly and re-purposing. The biological parts are non-toxic and can be simply composted. The technical, polymers, alloys and other man-made materials are designed to be used again with minimal energy.

Diversity is strength

Diverse systems, with many connections and scales are more resilient in the face of external shocks, than systems built just for efficiency – it applies to economies and communities too.

To make this happen…

Energy must come from renewable sources

As in life, any system should ultimately aim to run on ‘current sunshine’ and generate energy through renewable sources.

Prices must tell the truth

Prices are messages and to use resources rationally these prices should reflect the real cost of our activity. It is part of setting the ‘rules of the game’ for positive development cycles.

Thinking in terms of systems is key

Understand how things influence one another within a whole.

Design for disassemblyTo apply these principles in product design you need to design for disassembly and see materials as nutrients for products that can be reused.

New business modelsTo earn money in a circular economy it is necessary to rethink our business models. At this moment we earn money with selling materials in the form of products. In a circular economy you sell functionalities in the form of services with the use of products. Hereby you need to distinguish two streams: biological nutrients and technological nutrients.The Biological ones are consumed and can be biodegraded. The technical nutrients are produced in such a way they can be easily recycled. These products are then not owned by the user, but for example leased. This makes it possible for the company to lease the same product to multiple users. If the product is outdated it can be redesigned, disassembled and parts can be reused or recycled. Users on their turn can always get the best/latest functionalities while not constantly having to buy new products.