Circular Economy Vs. Linear Economy

There are two paths that drive the industry wheel of production: circular and linear economy.

The first, circular economy, has been used since industrialization, while the latter is more recent, although the original theory on it dates back from the 1960s. Whilst a handful, one of the main differences between circular and linear economies is their basic modus operandi.

Below, let’s look into the similarities, differences, and courses of both linear and circular economies.

Linear Economy

The traditional linear economy pattern follows the take-make-dispose scheme.
This method of production is maximizing the uses of collected raw materials before it transforms them into products, eventually disposing of unusable material.

Linear economy value is created by mass production and the selling of products. Due to this scheme, which is similar to a flat line, the linear economy can be found under the name ‘open cycle.’ The main problem that arises with this production approach is the irrational usage of the available resources. During the process of production, resources are generally not implemented in the final product. Expectedly, this creates a double negative effect, because it negatively affects both the environment and climate changes.

Linear economy exhausts raw materials and energy, which results in CO2 emissions. Statistically, around 68% of input raw materials are of non-renewable nature which poses a grave problem and threat to the environment, given that these products are either detonated or burned. Besides the severe damage to the biosphere, the downfall of the linear economy is human exploitation as well. This system puts an emphasis on the products themselves, and the outcome of such an equation is – mass production and consumption. Yet, to supplement the markets’ needs, the economy exploits workers

Circular Economy

Circular economy comes as an alternative to the method of the linear economy. The name was first coined by Pierce and Turner in 1989, although the theory originates from the 1960s. Many environment-conscious theorists and economists have predicted the aftermath of mass consumption and production. In the meantime, they had been elaborating on a better and more conscious way of production.

Compared to the linear economy, the circular economy works in a far smoother and more sustainable way. The main focus of this economy is to maintain the added value of material while eliminating waste as best as possible. The circular economy is concentrated on the usage of products as resources. The method used by the circular economy is actually the 3R principle: reduce, reuse, and recycle.

Particularly, exhausting resources are minimally used during production, while the old, used products are reused to the maximum. What makes this production method circular is that the raw materials are recycled or reused. To put it simply, to create one product, we use minimal resources. Then, that same product will be additionally reused instead of disposed of. This provides a healthier approach towards the environment as well as more sustainable usage of the pool of resources.

Due to this circulation of used products as a basic resource, the method applied in a diagram appears as a circle, hence the name. A circular economy can be also found under the name of ‘closed system of production.

The Outlook of the Circular vs Linear Economy

The main difference between the aforementioned economies is that linear economy is focused on products, whereas cycling economy is focused on services. The open cycle of production which disposes of old but reusable sources has proven to be one of the prime reasons for the environmental and climate change crisis.

A circular economy uses resources that are of biodegradable nature, which then enables the product to be either reused or returned to nature. The Linear model of production is eco-efficient because it supplies the market, while the circular model is eco-effective. 

The life of the final product in a linear economy ends after the customer’s usage, whereas the life of the final product in the circular economy is used as a basic resource throughout the production process. The business model of the linear economy is also focused on products, whilst the business model of circular economy concentrates on service.

Many ecologists and eco-conscious economists consider the circular economy an essential model of the 21st century. Besides being considerate towards nature, the entire process is also downright ethical and sustainable. Even so, there are various obstacles that have to pass before implementing this system, with one of the most prominent being the lack of legal regulation or a specific guide for the economy’s implementation.

Without it, the very implementation of circular economy can easily raise many questions as well as eyebrows, as the potential side-effects of a wrongfully managed process can drastically increase product cost and impair proper waste management.

Written by impacX team

Written by impacX team

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