What is a circular economy?
The circular economy is an entire shift in how we source, make, buy, and use things.
It is a system where we keep the resources and materials we have in circulation for as long as possible:
- New products are designed for quality and longevity.
- Recycled materials are used instead of new resources.
- Products can be repaired, disassembled, and recycled, ready to be made into something new, again and again.
- We look for ways to meet our needs with services instead of products or things.
The whole supply chain is committed to eliminating waste, reducing emissions and removing the use of our finite natural resources.
Moving from a linear to a circular economy
In a linear economy, we take resources from the earth and use them to make things. When those things break or lose their value, we throw them out.
Moving toward a circular economy requires us to do things like:
- rethink how we can make product use more intensive (for example, by sharing products).
- reuse discarded products that are still in good condition and fulfill their original function.
- recycle by processing materials to obtain the same (high grade) or lower (low grade) quality.
- remanufacture by using parts of the discarded product in a new product with a different function.
How Victorians are achieving circularity
- Rethink: Sunshine Repair Café is changing consumer culture one conversation at a time, and building skills that empower everyone to contribute to the circular economy.
- Reuse: The Salvation Army has been operating its second-hand stores for over a century.
- Recycle: The Jesuit Social Services’ Ecological Justice Hub partners with Precious Plastics Melbourne to recycle plastic bottle lids – which are not currently recycled – while providing education and job-readiness programs for people with disabilities and the long-term unemployed.
- Remanufacture: A Sustainability Victoria-funded project has transformed material from end-of-life tyres into speed humps without compromising on performance.
Why we need a circular economy
Almost half (45%) of global CO2e emissions come from the manufacture, consumption, and disposal of products and material goods. If we transitioned to 100% renewable energy today, it wouldn’t be enough to meet global emission targets and reach net-zero.
The linear system of ‘take, make, and waste’ represents a market failure. It assumes constant supply of natural resources, when most are finite.
With 90% of global biodiversity loss caused by the extraction and processing of these resources, it makes sense to use what we already have to its full potential.
The value of a circular economy
Shifting to a circular system means reducing the pressure on our environment and our waste systems. It has the potential to generate jobs, attract investment, and grow income for Victoria.
Modelling shows that shifting to a circular economy could create an economic opportunity of $23 billion by 2025 for Australia, and tens of thousands of jobs.
A circular economy could also halt and even partially reverse biodiversity loss by 2035.