Content of this unit
Comparative analysis between Linear and Circular Economy models

Our world is only 9% circular and the trend is negative. The circularity gap is not closing.

We cannot understand the concept of circular economy without opposing it to the economic model that has prevailed until now, the linear economy model. Linear model has been based on extracting the materials from nature to make products, use them and then throw them away. So, from the point of view of the environmental and ecological economy, a scheme linear describes the production of goods as a process of transformation that starts with the extraction of natural resources and ends up in the generation of waste.

The Ellen MacArthur Foundation highlights that “the linear model is based in producing, using and throwing is leading to levels of scarcity, volatility and price increases that our economy cannot take over” (Ellen MacArthur: 2013).

In the linear model, all the products end up becoming waste but, to happen that, we need resources that are increasingly more limited and whose elimination supposes a high environmental cost. United Nations calculates that the world population will reach 10 billion people in 2050. In addition, some 3 billion people will reach a social status of middle class, and, consequently, their consumption patterns will change, and global demand for energy and raw materials will rise dramatically. This can lead to an accentuation of the scarcity situation that, unless you start working with models closer to circular, will generate great global instability. We take, we make, we consume, we dispose and it’s the end of natural materials.

It is unthinkable, however, that this model can continue in force for a lot longer because natural resources are going exhausting inexorably as demand continues to grow at an exponential rhythm. If we take a look at future forecasts - and in the not-too-distant future - it is evident that the current economic model is unsustainable. It is estimated that in 2030 the Earth must support the presence of more than 9,000 million people with resources increasingly scarce. We talk about water and fossil fuels for example.

The scarcity of resources has become a huge problem for businesses, but it can also be a fantastic opportunity if they agree to be adapt to the change. For many experts, change needs to take the circular economy model as its own. It is true that the problem of resources exists, but despite it - or precisely because of it -, many companies begin to be aware that reusing and sharing resources also makes sense from the economic point of view, and, above all, it has a journey much longer and sustainable.