What is a circular economy, and how can it help business and the planet?

September 21, 2022

The traditional economy was/is an overwhelmingly linear one. In this economic model, raw materials are gathered from the Earth and turned into products, which consumers purchase and use before discarding them into the waste stream. Along the way, little regard is given to the consequences of the collection, consumption and disposal of the goods. In fact, sustainability and ecological footprints are of minimal concern — and all is well as long as profits are being made.
But in the 21st century world, things are starting to change. With an eye toward reducing the impact we have on the planet and creating a brighter/greener future for the generations that will follow us, industries and consumers are both moving away from the linear economy toward something much more sustainable, and better for the planet, its inhabitants and ultimately even business: a circular economy.

What is a circular economy?

In a circular economy, sustainability is a leading driver of decision-making for producers and consumers. This economic model sees a trio of principles (summarized in simpler terms by the familiar “reduce, reuse, recycle” slogan) working together to reduce our impacts on the planet and its environment:


  • Eliminate waste and pollution
  • Circulate products and materials
  • Regenerate nature


Accomplishing all of these things primarily revolves around sharing, reusing, repairing, refurbishing and recycling existing products for as long as possible, greatly extending their life cycles and minimizing waste. When a product is no longer usable, the materials it is made of are, whenever possible, collected to be used again and again. This leads to a scenario where resources that would have been discarded in a linear economy instead being used to create new products for consumers — and creating the loop that gives the circular economy its name.

The plentiful benefits of shifting to circular
Moving to a circular economy would help combat a long list of the problems plaguing our planet today, including pollution, climate change, biodiversity loss and the depletion of natural resources. Further, if implemented widely, it’s seen as a way to power new industries and drive global economic growth.

Consider just a handful of the opportunities for improvement that moving to a circular economy could create:

  • The production of new textiles currently uses nearly 100 billion cubic meters (over 25 trillion gallons) of water each year, representing nearly 5% of freshwater withdrawal globally. Simultaneously, people throw away approximately $460 billion worth of still-wearable clothes each year. By expanding on the collection, recycling and repurposing of second-hand clothing, a wealth of resources could be preserved, emissions and other pollution could be significantly cut, and a surging second-hand clothing market could see large sums of money changing hands via the sale of clothes that would otherwise have been put into the waste stream.

  • According to the 2021 Circularity Gap Report, by doubling the size of the circular economy, worldwide emissions could be reduced by nearly 40% and the total materials-use footprint could be cut by nearly 30% — all by 2032.

  • By spurring and growing new business models centered on reuse, repair, remanufacturing and sharing, research indicates that the circular economy could present an opportunity to generate $4.5 trillion of economic growth by 2030.

  • Transitioning toward a circular economy could drive a net increase of 6 million jobs globally by 2030, according to a report by the UN’s International Labour Organization.

Examples of how we can ‘close the loop’

The transition certainly won’t happen overnight, but there are a number of ways to take gradual steps toward realizing a circular economy — and they can be taken by governments, business leaders and ordinary people alike. 
In many cases, elected officials at the federal level are seeking to lead the way legislatively. Offering one example of U.S. legislators seeking to move such initiatives forward, an October 2021 U.S. Senate Environment and Public Works hearing titled “The Circular Economy as a Concept for Creating a More Sustainable Future” focused on reducing the quantities of trash that enter the waste stream and landfills, and instead leveraging it for reuse, repair, recycling or remanufacturing.
A few examples of federal-level bills that have been introduced in the United States with the goal of spurring moves toward a circular economy include:


  • The RECOVER Act (H.R. 5115), introduced in the U.S. House of Representatives in 2019, would authorize the EPA to establish a Recycling Infrastructure Program that could provide funding to states and local governments to help them establish and grow recycling infrastructure and programs.
  • The RECYCLE ACT (S. 2941), introduced in the U.S. Senate in 2019, would require the EPA to create a program that awards grants to, via public education and outreach, boost the effectiveness of community recycling programs. It would also require the agency to build a model recycling program toolkit for states and municipalities, as well as require the EPA to once every five years review its guidelines for purchasing recycled materials.
  • The Plastic Waste Reduction and Recycling Act (H.R. 7228), introduced in the U.S. House of Representatives in 2019, would establish the national Plastic Waste Reduction and Recycling Program. The goal of the program would be to boost the U.S. plastics-recycling industry’s competitiveness in the global marketplace, as well as to reduce the harmful environmental impacts of plastic waste.
  • The Break Free From Plastic Pollution Act of 2020 (S. 3263/H.R. 5845), introduced in both the House and Senate in 2020, would establish a range of waste- and recycling-related requirements for plastics and other common materials. These would include phasing out a number of single-use products, as well as making the manufacturers of certain types of products financially responsible for the collection, management, recycling or composting of their products after consumer use.

A number of cities and states have already put laws on the books that encourage recycling and composting by their residents. Some of these include:

Of course, businesses can take steps toward supporting a circular economy by using more reclaimed materials and encouraging the reclamation and recycling of the products they produce. Further, entire business models can be geared toward furthering the circular economy. Prime examples from around the world in this category include:

  • Netherlands-based company De Clique employs bike couriers who collect organic waste materials from businesses such as restaurants, grocery stores and hotels. After diverting the materials from the waste stream, the company then sells these materials to third parties who turn them into products such as cosmetics and food ingredients.

  • Promoting the circular economy in the automotive industry, France-based Groupe Renault has introduced a range of practices aimed at extending the life of their vehicles, parts and materials so that fewer natural resources must be consumed to produce new ones. Some of the initiatives it has mounted to support this goal include using more recycled plastic content in its products, remanufacturing car components such as gear boxes and giving electric batteries a second life.

  • Intesa Sanpaolo, Italy's largest bank, has long made efforts to promote sustainable development. In the 2007-2014 timeframe, it supported renewable energy- and environment-focused investments totaling more than 11 billion euro. The company’s corporate leaders have also established the bank’s support of a circular economy as a strategic priority for the business, actively backed the development of a circular economy-focused marketplace, and created financial products and policies that directly support the circular economy.

And in households, making even seemingly minute changes can add up to making big differences if widely adopted by the general population. In just one small example that relates to the waste industry, switching to longer-lasting garbage carts and models that are made with recycled materials can help cut CO2 emissions. (Use Toter’s Carbon Emissions Calculator to see the footprint-reduction possibilities in a single household.)]






About Wastequip
Wastequip is the leading North American manufacturer of waste handling equipment, with an international network of manufacturing facilities and the most extensive dealer network in the industry. Wastequip’s broad range of waste and recycling equipment, trucks and systems is used to collect, process and transport recyclables, solid waste, liquid waste and organics. The company’s brands include Amrep®, Accurate™, ConFab®, ContainerPros®, Galbreath®, Mountain Tarp®, Pioneer™, Toter®, Wastebuilt®, Wastequip®, Wastequip WRX™ and wasteware™. For more information, visit www.wastequip.com.

About Toter
Toter is the leading provider of waste and recycling carts to waste haulers and municipalities in North America. Additional products include specialty carts for document management, electronic waste, organics, medical waste and more. Manufactured using Advanced Rotational Molding, Toter carts offer a greater service life than injection-molded carts. Toter is also the only commercial-grade cart available to consumers at retailers nationwide. Toter is a division of Wastequip. Learn more on the web at www.toter.com.

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