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A circular economy is the opposite of a traditional linear economy. It is a sustainable economic model that focuses on reducing waste and optimising the value of resources. In comparison, the linear economy works by extracting materials from the Earth, producing products, using them and then throwing them away as waste.

A circular economy aims to use the Earth’s resources in a cycle, creating a continuous loop. The economic model seeks to produce products that last and get used for a long time. To then recycle the material and reuse it. The model addresses global challenges like climate change, waste, biodiversity loss and pollution. 

What is a circular economy?

The economic model considers all parts of a product’s life cycle. Each area is optimised and made as sustainable as possible. 

The first step concerns the product’s design. The aim is to maximise its lifetime and use materials efficiently. The best materials come from recycled things, but new materials also get used. If so, it is crucial to ensure they get extracted sustainably and efficiently. A circular economy aims to prevent the overuse of natural resources, such as forests, metals and oil. 

The next step in the process is the manufacturing of the product. It is important to use green energy at this stage. After the consumer has used the product, the final step is recycling all the product’s materials. This step is essential to a circular economy, where resources are conserved by being recycled. 


There are many benefits of a circular economy. Among things, the model aligns with the sustainable development goals. Particularly the goal of reducing consumption. Another advantage relates to the growing world population, as more people are consuming more products. The development puts high pressure on natural resources in a significantly unsustainable way. More so, the economic model reduces greenhouse gas emissions, for example, by efficiently using energy. 

Circular economy and economic growth

There is a common concern that a circular economy will harm economic growth, as the production of new things is limited. However, this is not the case. The economic model lets companies produce products from recycled or new materials. Hence, new material is still needed, as recycled material is limited in its reuse. Eventually, the material loses its quality. Furthermore, the high quality of sustainable products also means they sell at a higher price. Overall, a circular economy can be both sustainable and economically beneficial.  

Across the world

Many agendas worldwide strive to move towards a circular economy. For example, the EU and the UN advocate for new economic models, yet the ideas around how to do this best differ. 

Sweden is an example of a nation that plans to transition to a circular economy. The Swedish government announced a national strategy for it in 2020. An ambition that aligns with the country’s goal of becoming the world’s first fossil-free welfare nation. The core of Sweden’s national strategy is “a society where resources are used efficiently in non-toxic circular flows and replace virgin materials.”

Example of source: Ellen Macarthur, Swedish government


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