The three cycles of the circular economy

Renting out your car, selling second stuff etc. is part of the circular economy but there is more. Firstly, things from nature need to circulate – food waste goes to compost goes to soil goes to food- for example. And trees go to wood to waste wood to fibre board to fuel maybe. And things come from the earth, like metals and they are made into, say, raw iron, then steel, then a product, then scrap, then more steel, and so on.

The biological, monetary and technical cycles of the circular economy

Most people take a narrow view of the circular economy, seeing it as renting out your car, selling second stuff etc. All true, but there is more to it. Firstly, things from nature need to circulate – food waste goes to compost goes to soil goes to food- for example. And trees go to wood to waste wood to fibre board to fuel maybe. And things come from the earth, like metals and they are made into, say, raw iron, then steel, then a product, then scrap, then more steel, and so on.

But money needs to go round too. Forget government hoarding surplus – that only removes money from the economy. We need the workers to get good wages so they buy stuff from factories that make good profits that pay good taxes and wages and so it goes round.

Many people react to the idea of people spending more because they think business will extract some stuff and dump others and leave the earth exhausted and polluted. They will. Unless there are either strict laws or stiff fees to stop them. So the circular economy will make it very expensive to extract or dump. And that is where the first and last invoice come in. In the life of a material, be it iron or sand, for example, the first invoice (paying for extraction) is the start of a long chain of invoices that the circular economy continues as long as possible. It puts dumping or burning off – the last invoice – and delays it in time. And the economy is rigged to reward them.

So, there are the basics. If you want to learn more about the three cycles, do look up the relevant course in our online school: https://circleeconomy.teachable.com