Moving Effectively Towards a Circular Economy

By Frank-Jürgen Richter

January 30, 2025

The global population of 7.6 billion is projected to touch 8.6 billion by 2030 and 11.2 billion in 2050. This growth will be driven by an increase in human life span, better healthcare, greater urbanization, and higher migration. These trends have wider implications for future generations to come. 

Every year, around 83 million people are added to the global population. This results in millions more requiring food, clothing, shelter, and a share of earth’s finite resources. While the population continues to grow at a rapid pace, the resources to sustain the population fail to match the same pace.   

Despite existing inequalities, an increasing number of people across the world are moving into the middle-class income group. With higher disposable incomes of the middle class, a lifestyle shift creates changes in consumer behaviour driving demand for consumer goods, non-essentials, and discretionary products. 

The rapid growth in population and the rise in demand for consumer goods has placed enormous pressure on the planet’s resources. Over the decades, people globally were familiar with a process of manufacturing, consuming, and discarding. This practice not only led to a discharge of waste products polluting the environment but also exploited resources to meet growing demand. 

Currently only 7.2% of used materials are recycled back into the economy. This puts a huge burden on the environment and contributes to pollution, biodiversity loss, and climate crises. 

As the actions of economies globally impact the environment coupled with the looming threat of climate change, past practices must be revisited, assessed, and replaced. Replacing the linear approach of manufacturing, consuming, and discarding with a newer (circular) approach will not only reduce the strain on finite resources but also lead to less pollution. 

While there is realization of the need for change and adopting methods to ensure better utilization of resources, more must be done to arrest the damage to the planet. This calls for a new approach – an efficient economic model.  

The Circular Economy 

In response to the drawbacks of the unsustainable linear approach, a new approach has been devised. The new approach, known as the circular economy is a model of production and consumption which involves reuse, repair, and recycle. It involves keeping products and materials in circulation as long as possible. By doing so, it aims to reduce waste by extending the lifecycle of products and components. The circular economy goes beyond repair, reuse, recycle, and share. 

Although the circular economy is mainly perceived as a waste management and recycling strategy, the economic and environmental implications are wider. Reusing and recycling products will reduce the burden on the planet’s natural resources and allow it time to replenish. The circular economy also plays a vital role in minimizing the total annual greenhouse gas emissions. Besides reducing pollution, the circular economy can play a crucial role in climate change and biodiversity loss. 

It is estimated that 80% of a product’s environmental impact is determined at the design stage. From conceptualization to manufacturing, efficient products would reduce wastage, consume less energy, and improve resource consumption. 

The global material footprint increased to 98 billion metric tons in 2022. Electronic waste produced was 62 million metric tons in 2022 and is projected to rise by 32% in 2030. These numbers highlight the importance of changing the way we use resources. Transitioning to a circular economy will definitely help in more ways than one. 

Challenges in Moving to a Circular Economy

Despite the numerous benefits offered, transitioning to the circular economy is not easy. Currently, the shift to a circular economy is in the initial phases. It is beyond doubt that migrating to a circular economy will require collaborations across sectors, inputs from various disciplines, and the support of policy and regulations. 

Moving to a circular economy isn’t without challenges. The knowledge, awareness, and potential of a circular economy are not widely known globally. Ensuring better awareness and communicating the benefits for the environment, climate change, and conservation of biodiversity is essential.

Small and medium enterprises lack the financial resources to transition from linear production process to the circular business model. Hence, the transition not only requires adequate finance and investment but also training, development of workforce, and knowledge transfer. 

Successful implementation of the circular economy requires a close integration across the supply chain. However, factors such as lack of transparency, partner incompatibility, implications of reverse logistics, and low trust act as barriers. 

Another hurdle is that the interconnectedness of the circular economy is not reflected in policy. While the numerous strategies, roadmaps, plans are a sign of growing interest, the differences in regulatory environments across geographies may increase barriers to trade. 

Designing for circularity can also involve a trade-off between functionality against circularity. Even though some circular materials may be economically viable to produce at scale, the aesthetics and technical properties of virgin materials may make circularity a competitive disadvantage. 

Businesses, industries, and policymakers realize that the circular economy optimizes resource consumption, generates employment, and reduces costs. Investing in a circular economy can instill low carbon development, sustainable production and consumption at the center of the economy.