The circular economy offers a new opportunity for innovation with sustainable development.

The current alarming growth of the world’s population and consumption has forced governments and related authorities to explore new alternatives to the ongoing linear economy model. In this model, products are developed and then get disposed of after their usage, with no consideration of the environmental, societal and economic impacts. The advent of the concept of a circular economy has a substantial role to play in this scenario. The concept has emphasized profound advances in product design to get a much higher efficiency of resource use.

As a new approach to the sustainable development of businesses, society and the environment, the circular economy refers to regenerative by design and intends to gradually decouple growth from the consumption of finite resources. The model aims to tie the rope between the production and the natural ecosystems’ cycles.

Principles of the Circular Economy Model

A circular economy exists where economic activity builds and rebuilds overall system health. The model acknowledges the significance of the economy requiring to work effectively at all scales, for all types and sizes of businesses, globally and locally. 

The foundation work for the circular economy was rooted back in 1976 by “Stahel and Reday”. In 1982, a paper submitted by Stahel on the title of “The product life factor” explains the fundamental core concepts of circular economy principles. In his paper, he defined the circular economy as “The extension of the use-life of goods is, first, a sensible point at which to start a gradual transition towards a sustainable society in which progress is made consistent with the world's finite resource base and, second, a strategy consistent with an active and independent role for the private sector. Product-life, or the period over which products and goods are used, governs their replacement speed and thus the consumption of natural resources required for their manufacture and the amount of waste they create.”

The concept of the circular economy is based on various principles, including design out waste and pollution; use waste as material, keep products and materials in use, make use of renewable energy, and regenerate natural systems. The model has the potential to lead the way towards the sustainable development concept, enabling balanced coordination with the economic, environmental, technological, and social aspects of a process.

Technically circular economy is driven by three principles: 1) Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows; 2) Optimize resource yields by circulating products, components, and materials in use at the highest utility at all times in both technical and biological cycles; 3) Foster system effectiveness by revealing and designing out negative externalities, such as water, air, soil, and noise pollution; climate change; toxins; congestion; and negative health effects related to resource use.