Why We Desperately Need to Move from a Linear to a Circular Economy

30th Jul 2021
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Waste is one of the biggest contributors to climate change. And, the UK produces around 37 million tonnes of waste per year.

Moving towards a more sustainable, circular economy where materials and products are shared, leased, reused, repaired, refurbished, recycled and kept in circulation for as long as possible means we could:

Keep reading to find out why a circular economy can nurture a growing economy and reverse climate change damage.

What is a circular economy & how does it work?

A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment.” – Ellen Macarthur Foundation

To cut waste and reduce the effects of climate change whilst also achieving economic growth means we need to move from a linear economic model to a circular one.

Linear vs circular economies

In a traditional linear economy, raw materials are used to make a product. After that product has been used, it’s then thrown away: Think ready meal packaging, takeaway coffee cups and cheap Primark clothes. It’s a take-make-consume-throw away pattern that relies on large quantities of cheap, easily accessible materials and energy.  

Whereas, in a circular economy resources are continually reused. So, when a product reaches the end of its life, it doesn’t end up in a landfill, but its materials are reused and kept in circulation within the economy. This means fewer raw materials are needed and less waste is created as a result.

The circular economy relies on companies designing, creating and manufacturing products that can be recycled, reused or easily taken apart.

How the circular economy works

To make a circular economy work, we need to:

  • Focus on lean production
  • Start making products that use fewer materials 
  • Reduce waste in manufacture and commerce
  • Reduce the number of working products that are thrown away
     

But the good news is, we’re already showing signs of adopting a circular economic model: we’re recycling plastic into pellets so we can make new plastic products; we’re designing electrical devices so that they’re easier to repair; we’re leasing cars instead of buying them and we’re choosing to download e-books rather than buy printed copies.

But for a circular economy to really work, it requires more than creating recyclable products, it needs a change in consumer mindset. We need to create a culture where we don’t own products, we loan them. 

Why do we need a circular economy?  

The aim of a circular economy is to ensure healthy and safe living and working conditions while causing less harm to the environment. It promises economic growth without destruction or waste.

Using materials more efficiently and making products that can be recycled means we can use and obtain raw materials sustainably. Raw material extraction increases energy consumption and CO2 emissions so if we can use fewer raw materials in production, we can cut waste and reduce the pressure on the environment at the same time.

With the supply of raw materials being limited, this will also stop us from having to depend on other countries to get hold of them. Plus, finding new ways to use raw materials and manufacture products more sustainably, efficiently and with less waste means we stimulate innovation, increase competitiveness and boost economic growth. In fact, Defra calculated that UK businesses could benefit by up to £23 billion per year through low-cost improvements to the efficient use of resources.  

A circular economy will help the UK build back better, bolstering the economy by £75 billion and creating half a million jobs, according to the Waste and Resources Action Programme (WRAP).” - UCL

Aside from benefiting manufacturers, businesses and the environment, a circular economy will also benefit customers as they’ll get more durable and innovative products that will save them money.

The biggest circular economy challenge we face
Although a circular economy will create a more financially viable economy and help us reduce the impact we’re having on the environment; it doesn’t come without its challenges.

Circularity clearly is an attractive option for the future. However, the actual implementation of circularity requires facing some major challenges.” - UCL

The biggest one being that we can’t efficiently recycle the resources we use.

The problem with the circular economy

The circular economy is not a new concept. For instance, during the middle-ages we recycled everything: unwanted food was fed to livestock, old clothes were turned into paper and old buildings were used to build new ones. It was quick, easy and efficient to recycle products and materials.

The challenge we face today is that the resources we use to make our modern-day products are not efficient to recycle. Back then, before industrialisation, most things were made from materials that were either decomposable or easy to re-use, like wood, reeds, hemp, iron and bricks, for example.

Products these days are made with a variety of new and different materials which aren’t always decomposable and aren’t always easy to recycle.

20% of total resources we use worldwide are fossil fuels. More than 98% of that is burnt as a source of energy and can’t be re-used or recycled.” – Low Tech Magazine

Take the Fairphone 2 smartphone for instance. It was specifically designed and manufactured to be as recyclable as possible. But with the use of synthetic materials, microchips, and batteries, only 30% of the materials used to make the device can be recuperated.

How we can overcome our biggest circular economy challenge

The resources we use to make products and the processes we use to recycle those resources is inefficient and, in some cases, not even possible.  

So, what’s the solution?

Research, development and innovation

The push for a circular economy is an opportunity for businesses and manufacturers to design and develop new ways to make products using materials that are recyclable and also create new recycling processes that are efficient.

They need to look for innovative ways to reuse, remanufacture and redistribute materials, especially in areas such as textiles, electricals, packaging and food.

And, with the plethora of R&D and innovation incentives out there, now is the best time to do that.

For example, with the government-funded R&D tax credits scheme, companies can claim up to 33% of the costs associated with researching and developing a new, innovative idea that helps the UK build a circular economy.

To find out more about this particular scheme, speak to an R&D tax specialist, such as Myriad Associates. Having been in the R&D tax credit industry for over a decade, they’ll know exactly how your clients can claim the maximum amount of tax relief on all their innovative projects. Call them on 0207 118 6045 or drop them a message.

This article was brought to you by Tax Cloud

Tax Cloud is an online R&D tax credit portal powered by the R&D tax specialists at Myriad Associates. If you’re filing R&D tax credits on behalf of your clients, then Tax Cloud is for you. It makes the process quick and simple, and it guarantees that your clients will always get their maximum entitlement. Find out more by visiting the website, speaking to one of our team on 020 7360 4437 or dropping us a message.