Why is circular economy important?

  • The world has finite resources

The concept of limits to growth, refers to the finite nature of the ecosystem to absorb waste and replenish raw material to sustain the economy. The economy is only a part of the larger ecosystem, and the ecosystem is finite, non-growing and in terms of materials, defined in volume or in other words, closed. Although we see certain natural resources such as solar energy being open, the solar flow is also not growing. Therefore, there are clear limits to growth in the ecological system.


  • Resource extraction for production cannot continue indefinitely

Extraction of finite resources (mining minerals and precious metals), disposal of one-time consumables (clothing/packaging) and energy production and consumption damages the planet.

We consume virgin resources for production, and most of these are non-renewable.  Waste going to landfill is equivalent to economic resources going to a grave yard, and each resource has a value, which makes each kg going as waste to be identified as lost economic value. Waste harms the environment, and landfills create future environmental liabilities. Incineration requires energy to be spent on resource destruction and emits harmful emissions which need to be neutralized, scrubbed or diluted before release. Even recycling as a repurposing strategy comes at great cost, with having to spend energy and resources just to revive other resources back.

Overall renewal happens at a much slower rate and intensity compared to consumption, depleting natural resources and accumulating unwanted resources (waste).

Renewal can happen at a similar rate to consumption, only if what needs to happens to resources after consumption can be pre-planned and pre-programmed. That is what circular economy intends to do.