What is the circular economy? And why it matters

Imagine a world where there is no waste. To achieve such a world isn’t easy, but it is possible. 

That’s what the circular economy model is based on. It aims to dissolve many of the harmful production practices that take place today and replace them with smarter and more sustainable ones.  

As a company deeply focused on our own sustainable approach, we know this will be an important step for our planet. We believe this kind of approach needs to become as standard amongst businesses. This starts with awareness and education, which is why we are exploring what the circular economy means and why it’s necessary in this article. 

What is the circular economy?  

The circular economy is a zero-waste concept. It focuses on a flow of production that can support the economy – without draining natural resources. The model takes a sustainable approach, one that prioritises the environment and aims to eliminate a throwaway culture.  

It’s a system that has been designed to be ‘closed’, where products loop back from the user to the factory, and factory back to user. This way, materials can be regenerated, recycled and reused.   

Components of the circular economy 

The circular economy depends on the circulation of materials from production to user. There are two different cycles within the circular economy, the bio cycle and the techno cycle. Technical materials follow a different flow to organic materials – very different in their nature, each kind of material needs to be managed differently.  

Organic materials  

Organic materials follow a bio cycle. They can more easily integrate into the ecosystem and are regenerated through biological processes. Food, water and wood are some examples of the organic materials that would go through this bio cycle.  

Technical materials  

Also known as synthetic materials, technical materials go through a techno cycle of refurbishment, remanufacturing, maintenance and sharing, depending on the product. Finite technical materials such as metals, fossil fuels and plastics need to be properly and carefully managed, especially as they can’t easily be recreated.  

The process 

The circular economy model is a circular process, as opposed to a linear one. Instead of having a clear beginning and a definite end, the circular economy abandons the current ‘take-make-throwaway' structure.  

Instead of ‘taking’, which would be the process of extracting raw materials, this circular process redesigns materials already in circulation. It ‘makes’ them by remanufacturing them, and instead of ‘throwaway’, it recaptures what we would usually categorise as waste and reuses it to manufacture a new product. And so, the cycle begins again.  

Why is a shift to a circular economy important?  

The linear economy has generated high profits for manufacturers while allowing consumers in developed countries to enjoy low-priced goods.  

Thankfully, people are more aware of the fact that we need to now put planet over profit. The linear economy, the one that’s still the dominating economic model used across the world, can’t continue. But what is so revolutionary about the circular economy?  

Reduced waste  

The planet is drowning in rubbish, with plastic being one of the biggest concerns surrounding waste. 

A circular economy model works to reduce waste and design it out of the system, repurposing all kinds of materials to be used again and again. Each year around 8 million tonnes of plastic make it to the ocean. Plastic can take anywhere between 20 to 500 years to degrade, so, finding a way to repurpose the plastics we use will help to make our planet drastically cleaner.  

The circular economy works to change the thinking behind what rubbish actually is. Is it ‘trash’ or is it a valuable source of reusable materials? Implementing a recycling infrastructure, corporations, manufacturers and consumers can all work together to minimise waste.  

Resource saving 

By reducing waste and recycling materials instead of disposing them, we can save natural resources. A linear economy depends on raw materials and continuously drains them. A circular economy does not. 

Our natural resources are valuable and we’re increasingly seeing how desperately they need to be preserved. The circular economy could help to save 70% of material resources. Our material needs are increasing, but by being strategic and smart about how we use our resources, the planet doesn’t haven’t to suffer.  

Doesn’t compromise economic growth 

The nature of the economy is that it grows. Although it might be an initial thought for sceptics, the circular economy doesn’t hinder economic growth. In fact, it can actively encourage it. Because a circular economy model isn’t reliant on raw materials, a shortage in them – or the need to reduce usage for conservation purposes – won't affect production.  

By using resources effectively, they can serve multiple purposes, increasing the means of production.  

Reduced greenhouse gas emissions  

According to Circle Economy, 62% of global greenhouse gas emissions come from the extraction and production of materials and goods to meet the demands of society.   

The principles laid out by a circular economy model would help to radically reduce greenhouse gas emissions. The extraction of raw materials, a major component of the linear economy, is incredibly energy intensive. Without this intensive process of extracting raw materials, the circular economy is much less polluting.  

A circular economy can be sustained 

Our current production practices are proving that they can’t be sustained. The relentless extraction of raw materials, combined with high greenhouse gas emissions and a never-ending stream of waste, is why we need to move from a linear economy to a cyclical model.

The planet is seeing over 90% loss of biodiversity because of the rate at which we are extracting and processing natural resources. The ‘plastic soup’ in the ocean has made its way into the food chain and into human blood.  And, according to the Environmental Protection Agency, in 2020 landfills were responsible for the emission of the equivalent of 109.3 million metric tons of carbon dioxide of methane into the atmosphere.  

If we want to keep doing the things we love and enjoying the luxuries of our society, then we need to change the way we go about it – not necessarily give it up. A circular economy nurtures the planet, helping natural resources to regenerate. It’s another way to live.  

Challenges of the circular economy 

A transition to a circular economy wouldn’t be an overnight process. A lot of businesses and jobs are connected with the existing linear economy and so would need a considerate strategy to make the change.  

Businesses that make products that are inherently disposable or ultimately obsolete – such as packaging, disposable cameras, wrapping paper, paper cups and coffee filters – would also suffer. 

A lot of large companies within the linear economy source work from low-income countries. These people could be vulnerable to sudden change, so again a co-operative and considerate approach needs to be taken. All of the aspects of a business, including often lengthy and complex supply chains, will have to undergo quite a significant systemic change.   

How is Skydiamond supporting a circular economy? 

A circular economy is partly defined by The Ellen MacArthur Foundation as a system that redefines growth and decouples economic activity with the consumption of finite resources, underpinned by a transition to renewable energy sources.  

At Skydiamond, we are already following these principles. We make sure our diamonds are sustainable and give back to the planet, not take from it. We re-purpose carbon dioxide from the atmosphere, releasing cleaner air back into the air than we took. We keep this CO2 and use 100% deep green energy from Ecotricity to power our processes to create our diamonds – which are forever!  

Why not take a look at our luxury, eco-friendly diamonds?