Going in Circles
by Sonam Velani and Kathy ZhangThe circular economy is an economic model which formalized in the 1990s, drawing upon the principle that ‘’everything is an input to everything else,” in clear contrast to the linear take-make-dispose model. This framework for production and consumption has three main principles: 1) eliminate waste and pollution, 2) keep products and materials in use, and 3) regenerate natural systems.
Sustainable design is central to the application of a circular economy. Products are thoughtfully designed to last and also for repair. By doing so, businesses can reduce their reliance on virgin materials, conserve natural resources, and minimize waste.
Conceptual framework of linear vs recycling vs circular economy (Source: Circular Flanders)
Unfortunately, we’re using and throwing away more material than ever. Our global economy is now only 7% circular, meaning of the 100 billion tonnes of virgin natural materials extracted from earth annually, only 7% make it back into the economy. Global circularity is actually shrinking, from 9.1% in 2018, to 8.6% 2020, and now 7.2% in 2023 (more about the Global Circularity Metric methodology here).
Transitioning from a linear to a circular economy can help businesses develop new revenue streams, meet consumer demand for sustainable offerings, reduce the cost of natural resource extraction and landfill disposal, and build more resilient supply chains – not to mention the myriad climate benefits. So what’s holding up implementation? Key challenges include:
Redesigning value chains: From our food to our phones, our clothes to our cookware, the products we use and consume in our daily lives are part of a long chain of production and distribution participants, often spanning continents and jurisdictions. These participants make decisions that influence the circularity of each product across many stages of the value chain. They often view any disruption in the chain as a risk. Appropriate policies are needed to regulate trade and trade flows such that value chains can be redesigned or optimized in alignment with circular principles, with all partners reaping the benefits.
Footing the bill for transition costs: While transitioning to a circular economy-aligned business model will pay off in the long run, the upfront costs of R&D, asset investments, and digital infrastructure may deter would-be circular businesses. Moreover, competition with often cheaper virgin materials makes the business case for recovering materials relatively uneconomic.
Changing consumer behavior: Our linear system designs products to fail after a certain time, to become outdated and off trend. Consumers may also lack awareness of circular designs, creating limited demand and little incentive for corporations to undertake the shift to circular supply chains and durable products. Meeting this challenge will require educating consumers on the benefits of transitioning to circular practices and the consequences of our current take-make-waste system. Identifying and elevating cultural leaders who can champion circularity in the popular zeitgeist will also be key.
Designing effective policy solutions: Legislation to promote the circular economy has too often fallen short due to lack of global consensus, unclear definitions, and import bans on circular products for protectionist reasons. Implementing financial incentives for the promotion of circularity and pricing products and services in a way that incorporates the costs of ecological damages is critical to facilitating the circular transition. Existing success stories give hope, like the EU’s efforts to ban single use plastics and the EU Green Deal Circular Economy Action Plan.
New York City generates an enormous amount of waste, with over 12,000 tons of waste generated each day. According to the EPA, New York City's diversion rate is around 20% (percent of waste diverted from landfills) – better than the national average of 34% but falls behind other cities, such as San Francisco, which has a diversion rate of over 80% (check out NY Climate Tech’s SF newsletter for more on the city’s impressive progress towards zero waste).
NYC recycling bins (Source: Ianqui Doodle/Flickr)
As part of NYC’s OneNYC plan for a sustainable city, NYC has put forth the goal of a zero-waste city by 2030. This ambitious goal is bolstered by a growing number of local programs and policies, including:
Plastic Bag Ban: NY state banned single-use plastic bags in 2020, though they’re still common around the city shops
Fresh Pantry Project collects excess food from farmers' markets and distributes it to local food pantries (1,000,000 pounds of food annually!)
refashionNYC is NYC's official clothing donation and reuse program with drop off locations all over the city
Curbside Composting is expanding to all NYC residents by 2024
New York Circular City Initiative, a public-private partnership which has put forth recommendations to accelerate NYC’s transition to a circular economy
by Sonam Velani and Kathy Zhang