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Essay: Circular economy and policies

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  • Published: 14 November 2017*
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This article is about circular economy and the policies concerning Circular Economy. The first part of the article will describe what circular economy is and the counterpart of Circular Economy. Afterwards a couple of benefits of circular Economy will be described. The last part of the article will discuss rules from the past, current rules and future rules concerning Circular Economy.

What is Circular Economy

The concept and possible paradigm shift of the Circular economy has been gaining momentum since the late 1970s. (Geissedoefer, Saveget, Bocken, & Hultink, 2016) ‘A circular economy is an economic and industrial system based on the reuse of products and raw materials, and the restorative capacity of natural resources. It attempts to minimize value destruction in the overall system and to maximize value creation in each link in the system.’ (Bastein, Roelofs, Rietveld, & Hoogendoorn, 2013, p. 4) That means that everything will be reused, through recycling and modification of the products. No products will have an end, the products will always be reused. The concept of circular economy is also shown in figure 1.

The opposite of the circular Economy is Linear Economy, that concept describes a system wherein raw materials are won and used once in a production process for the production of a product. (Geissedoefer, Saveget, Bocken, & Hultink, 2016) That product will be likely used once and afterwards be thrown away. After the products is thrown away it will probably rest stored on a garbage belt or be burned for a little energy. So the used materials are disposed. The concept of Linear Economy is also shown in figure 1.

Figure 1: circular economy vs Linear Economy (AkzoNobel, 2015)

Why could circular Economy be important

A benefits of circular Economy is the reduction of the environmental pressure. (European Environment Agency, 2016) Which means that the production of the products that we may need causes less Harmful emissions, such as carbon dioxide (CO2), nitrogen oxides (NOx), methane (CH4), hydrofluorocarbon gasses (HFCs) and far more gasses. (Sharma, 2008) That will result in cleaner word without the rising temperature and the corresponding negative consequences.

Another benefit is the minimising of the dependency of the Netherlands and Europa. (European Environment Agency, 2016) The Netherlands and Europa became increasingly dependent of instable and debatable parties for the normal behaviour and production of the required products. If circular Economy is successful, it means that Netherlands and Europa do not need the instable and debatable parties and can count on themselves for the further development of the counties.

If the Netherlands and Europa are independent, it could also result in considerable cost savings, increasing the competitiveness of Europe’s industry while delivering net benefits in terms of job opportunities. (European Environment Agency, 2016) An increased competitiveness is an very positive, because of the growing global competition.

Policy intervention types

Policies about circular economy could accelerate the change to a circular economy, the Ellen MacArthur (2017) foundation defines the following possibilities of policies:

Education information and awareness

Collaboration platform

Business support schemes

Public procurement and infrastructure

Regulatory frame works

Fiscal frameworks

Barriers policy can overcome

The intervention of the government in some sort or another can be required in some cases to overcome some barriers during a transition to a Circular Economy. (Ellen MacArthur Foundation, 2017) The first barrier are the economic concerns that businesses could have about circular economy. The concerns could be the challenge to be profitable (because of fluctuating price non Circular possibilities) or a lack of capital. Another market barrier When the regulations of concerning a market fail to support a Circular Economy, then this could be a barrier. The barrier reflects poorly defend targets, failing legal frameworks and implementation failures. (Ellen MacArthur Foundation, 2017) an example could be a restriction for a company to purchase and use a product. The last barrier could be social factors. (Ellen MacArthur Foundation, 2017) An example of a social factor are the none conscious habits and customs of the costumers and the a possible lack of capabilities and skills from the business and or the whole economy.

Established policy

Circular economy has also gained traction with policymakers, Circular economyhas influenced local, regional, national, policymakers. The first policy about Circular economywas the German enactment of the ‘Closed Substance Cycle and Waste Management Act’ from 1996. (Geissedoefer, Saveget, Bocken, & Hultink, 2016) The purpose of that act was to promote a closed substance cycle of waste management (Kreislaufwirtschaft). (Federal Law Gazette, 2000) The act should ensure a compatible disposal of waste, to maintain the natural resources of Germany.

That law was followed by the Japanese ‘Basic Law for Establishing a Recycling-Based Society’ in 2002. (Geissedoefer, Saveget, Bocken, & Hultink, 2016) The purpose of that law is to expedite the change into a new society, which is based on recycling. (Environment Agency Japan, 2002) The new recycling society should contribute to ensure the health and development of the current and future surroundings. The responsibility of the execution of the law lays with State, local governments, businesses and the public. The parties are also responsible for the articulation of the needed matters for a recycling based society. The law established in 2002 fits in the Japanese Basic Environment Law No. 91 of 1993. The purpose of the Basic Environment Law is to promote policies for environmental conservation. (Ministry of the Environment, 1993)

China introduced in 2009 ‘Circular economy Promotion Law of the People’s Republic of China’. (Geissedoefer, Saveget, Bocken, & Hultink, 2016) That law has to purpose to support circular economy and improving the efficiency of the utilization of the resources, while protecting the environment. (Jintao, 2008)

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