The linear or “throwaway” economy
The second industrial revolution already began in the middle of the 19th century. But only in the last thirty years have we consumed more than a third of natural resources, fueling economic growth, technological progress, and mass consumption. In a linear process, raw materials are extracted from nature, processed into materials, and used to produce goods. We buy and use these goods and finally throw them away. This linear economic model, which uses increased resources and thus exceeds the natural limits of the Earth, threatens our livelihoods, and exacerbates the resulting challenges:
- The global rise in temperature caused by the burning of fossil fuels is leading to climate change with increasingly severe consequences for our natural habitats, our cities, and our food production.
- The loss of biodiversity, such as the extinction of life forms and the disappearance of ecosystems, which at the same time reduces the potential of all ecosystem services such as fresh water, clean air, and fertile soils.
- The pollution of the environment through fertilizers and pesticides used in agriculture.
- The growing amounts of waste from industry and private households, driven by our consumption.
- The exploitation of natural resources, which we need to produce buildings, food and products for everyday life. Raw materials are finite, and their exploitation has almost quadrupled in the last 50 years.
The counterpart to the linear economy is a circular economy
The health of nature, the well-being of people and the future of our planet are intricately linked. Therefore, the prevailing linear “throwaway economy” must be reconsidered. In 2022, out of approximately 100 gigatonnes of raw materials such as ores, minerals, fossil fuels and biomass used to produce goods in one year only 8.4 gigatonnes were reused for another product’s life cycle. Most of it becomes waste, ends up in landfills or is incinerated. The Circularity Gap Report found that due to these material flows the world is only 8.6% circular.
The economy of the future must promote life on Earth; be more regenerative, inclusive and equitable. The circular economy offers solutions here. It aims to keep products and materials in the production cycle, thereby increasing resource efficiency, minimizing environmental impacts and avoiding waste:
- The elimination of waste and pollution:
Products are designed so that they can be reused, recycled, or composted and materials or recyclables do not end up in waste.
- The return of products and materials to the material cycle:
Materials from disposed items are kept in the production cycle through targeted logistics (e.g., recyclables collection points). They can be further processed as a valuable resource into a new product.
- The regeneration of nature:
Nature’s capital is built up by reducing resource extraction and returning nutrients taken from nature. In this way, it is given more time and space to regenerate.
The circular economy views the production cycle as a closed system. From raw material extraction to design, production, distribution, and recycling of materials. If products and materials are to remain in the cycle, a change in thinking is required on the part of all those involved in the entire value chain:
Business models determine not only the benefits, services, and profit, but also the life cycle of a product, where quality and durability play a key role.
These start with the design, which is the problem – and the solution. Disposable items such as coffee cups or plastic cutlery are often made of plastics that cannot be reused, composted, or repaired, and thus fall out of the production cycle. Therefore, products must always be thought of and designed from the end of the life cycle, with the aim of long durability and quality. In addition, economic activities must be decoupled from the exploitation of finite resources and material cycles must be closed by returning “waste” or recyclables or materials to the production cycle after a product has been used.
Creating value through material cycles
There are two main cycles in which products and materials are kept in the material flow: The biological cycle, in which degradable organic material (e.g., food waste) is returned to the earth, contributing to the regeneration of nature.In the technical cycle, devices and materials can be kept in the material cycle through repair, reprocessing and recycling. To do this, products must be designed to be more durable. Another option is modular product design, which makes it easy to replace and repair components in appliances.
Consumers in the loop
For a circular economy to work, not only do companies have a responsibility to produce recyclable products, but consumers also play their part in keeping them in the material flow. The so-called “R-strategies” help to close the “loop” of material flows and thus conserve resources and avoid waste.
These strategies help to increase the circularity of the economy:
Sustainable Development Goal 12 “Sustainable Consumption and Production”
The world’s population currently consumes more resources than ecosystems can provide. The United Nations stresses that with a world population of 9.6 billion people in 2050, “[…] the equivalent of nearly three planets will be needed to provide the natural resources required to sustain our current lifestyles.” The importance of the shift towards a circular economy is demonstrated by the fact that “sustainable consumption and production” is a separate UN Sustainable Development Goal, SDG 12, which calls for the implementation of sustainable consumption and production patterns by 2030, for example through:
- The sustainable management and efficient use of natural resources (Target 12.2).
- Reducing waste generation through prevention, recycling, and reuse (Target 12.5)
- Ensuring that people receive relevant information and awareness on sustainable development and adapt lifestyles in harmony with nature (Target 12.8)
An economy that serves us and the planet
The time for transformation is now. According to the World Economic Forum, the circular economy will create new markets, reduce production costs, lower environmental risks to human survival and drive innovation. The Ellen MacArthur Foundation calculates that a shift to the circular economy would reduce projected global greenhouse gas emissions by one-fifth by 2050.
Therefore, investing in companies that engage in circular activities is important because it accelerates the transformation and sends a positive signal to the market. The radiTheme “Healthy Ecosystems” focuses on three Sustainable Development Goals (SDGs): SDG 12 “Responsible Consumption and Production”, SDG 14 “Life Below Water” and SDG 15 “Life on Land”.
With your investment in the radiTheme “Healthy Ecosystems”, you focus on companies that offer solutions for people and planet. You can find more detailed information here.
You can also learn more about whether the UN Biodiversity Conference COP15 will bring the “Paris moment” for nature.