This document discusses circular economies as an alternative to the current linear "take-make-dispose" economic model. A circular economy aims to eliminate waste and restore environmental functions by keeping resources in use for as long as possible through reuse, repair, refurbishment and recycling. It outlines several key characteristics of a circular model, including designing out waste, building resilience through diversity, using renewable energy sources, and thinking in systems and cascades to extract additional value from materials. Several companies exploring circular business models are provided as examples.

1. To find more information on circular economies, visit:
• Ellen MacArthur Foundation
• Cradle to Cradle
• Regenerative Economy
Our current “Take-Make-Dispose” model is one that is heavily
dependent upon huge sums of cheap materials and energy
sources which are reaching their ecological limits. A circular
model is a healthier alternative to the current linear model.
A circular economy
• Enhances natural capital
• Encourages flows of nutrients within the system
• Creates conditions for regeneration with tighter inner loops
• Helps preserve more energy and other value, such as
embedded labor
• Keeps product loop speed low by extending product life
• Increases product utilization
• Maximizes use of end-of-use bio-based materials
• Reduces damage to human utility, such as food, mobility,
shelter, education, health, and entertainment
• Helps manage negative externalities, such as land use; air,
water, & noise pollution; release of toxic substances; and
climate change
New Economics:
Circular Economy
Dalia Zaghal, Matt Evans, Lauren Standel, Edward Thach, Nancy Landrum
INTRODUCTION WHY IT MATTERS
EXAMPLES
CHARACTERISTICS
REFERENCES
CONTACT
Many companies have explored circular methods
in their own business models:
• Interface
• Desso
• Bundles
• Veta Le Palma
• Coca-Cola
• Eco-Industrial Park (Fig. 2)
Characteristics of a Circular Economy include:
• Design out waste: Materials are designed to be
used again with minimal energy and highest
quality retention
• Build resilience through diversity: the more
diverse a system is, the more resistant it is to
external disruptions, mitigating risk.
• Work towards energy from renewable sources:
this reduces the need for fossil-fuel based inputs
and captures more of the energy value of by-
products and manures.
• Think in systems: This requires reestablishing
dynamics of current processes and linking them to
one another much like the natural systems of our
earth.
• Think in cascades: extract additional value from
products and materials by cascading them through
other applications.
Cradle to Cradle. The Product-Life Institute. http://www.product-
life.org/en/cradle-to-cradle
Ellen MacArthur Foundation (2012). Towards the Circular Economy: Economic
and business rationale for an accelerated transition. Executive Summary.
Nguyen, H., Stuchtey, M.,& Zils, M. (2014). Remaking the industrial economy.
McKinsey Quarterly.
Börlin, Max et Stahel, Walter R. (1987) Economic strategy of durability –
valorisation of the product-life of goods as a contribution to waste prevention.
(original title : Stratégie économique de la durabilité - éléments d'une
valorisation de la durée de vie des produits en tant que contribution à la
prévention des déchets); cahier SBS no. 32, Société de Banque Suisse, Bâle
(published in French and German).
William McDonough: Cradle to cradle design. TED2005.
http://www.ted.com/talks/william_mcdonough_on_cradle_to_cradle_design
World Business Council for Sustainable Development (2006). From Challenge
to Opportunity: The role of business in tomorrow’s society.
Nancy E. Landrum, Ph.D.
Loyola University Chicago
Quinlan School of Business & Institute of
Environmental Sustainability
Email: nlandrum@luc.edu
Phone: 773-508-8953
A circular economy is designed to eliminate waste
and restore environmental functions (Fig. 1). Circular
models are restorative with two types of material
flows:
• biological nutrients, designed to reenter the
biosphere safely, and
• technical nutrients, which are designed to circulate
at high quality without entering the biosphere
(reuse and recycle).
The term encompasses more than the production and
consumption of goods and services, including a shift
from fossil fuels to the use of renewable energy and
the role of diversity as a characteristic of resilient and
productive systems. It includes discussion of the role
of money and finance as part of the wider debate,
and some of its pioneers have called for a revamp of
economic performance measurement tools.
Economic actors in a loop economy can achieve a
higher profitability than their competitors in the
throughput economy (Stahal & Borland, 1987). Using
30 case studies, it was found that for a loop economy
to be fully successful, a restructuring of the industrial
economy and its framework conditions would be
helpful (Stahal & Borland, 1987).
RESOURCES
Figure 1. Circular economy.
Figure 2. Eco-industrial park.