Circular Economy 101

Given the fact that physical resources are finite, our current linear economic model of "take-make-waste" can't be sustained. Moving towards a more circular economic model is inevitable.

1. What is circular economy?

In a linear economy, we take resources from the Earth to make products, then eventually throw them away, which leads to the waste of precious resources and overproduction of waste, and does not account for negative externalities exerted upon the environment.

By contrast, in a circular economy, we keep materials and products in circulation, maintaining their values in the economy for as long as possible, and we stop waste being produced in the first place. A circular economy reduces material use, redesigns materials, products, and services to be less resource intensive, and recaptures “waste” as a resource to manufacture new materials and products.

According to the Ellen MacArthur Foundation, a circular economy is based on three principles, all driven by design:

- Eliminate waste and pollution

- Circulate products and materials

- Regenerate nature

2. The butterfly diagram

The circular economy system diagram, known as the butterfly diagram, illustrates the continuous flow of materials in a circular economy. There are two main cycles – the technical cycle and the biological cycle. In the technical cycle, products and materials are kept in circulation through processes such as reuse, repair, remanufacture and recycling. In the biological cycle, the nutrients from biodegradable materials are returned to the Earth to regenerate nature.

Please watch the video below for further explanation about the butterfly diagram.

3. Resources for further exploration

3.1. Circular Economy Show by the Ellen MacArthur Foundation

The Circular Economy Show - hosted by the Ellen MacArthur Foundation - is a monthly discussion focusing on actions to move towards a circular economic model. In each episode, hosts from the Ellen MacArthur Foundation will be joined by experts from industry, government or academia to discuss developments, solutions and specific case studies in applying the concept of circular economy in real life.

3.2. Asian Development Bank Data Room: Circular Economy

According to the Asian Development Bank (ADB), "a Circular Economy will allow ADB to tackle global environmental challenges including climate change, resource management, biodiversity loss, waste, and pollution whilst supporting economic development and reducing poverty". Circular Economy has also become a central theme for many of ADB's funding sources.

Please follow this link to a circular economy data room created by ADB, containing the schedule of upcoming webinars, information, and key documents on Circular Economy, its concepts, and implementation.