What is a circular economy?
Circular economy is an economic model designed to increase the efficiency with which we use resources and raw materials in the production and consumption of products and systems throughout the entire supply chain. It is based on the assumption that the linear economic model – which relies on production, consumption, and the generation of ever-increasing amounts of waste – is not sustainable in the long-term due to the limited resources available on Earth and the model’s devastating effects on the environment. In contrast, circular economy seeks to fully and efficiently use and reuse materials and resources by adopting a circular (holistic) perspective that encompasses the entire production and consumption process – from the choosing of the raw materials, through the process of creating a product, to its utilization and finally the end of its life. This model opens doors to new business opportunities with enormous economic potential, including new approaches to how products are designed, packaged and used, the benefits of a fundamental shift from a model that provides products to one that provides services, and the possibility of lucrative new cooperative ventures.
Circular economy: What’s our motivation?
A circular economy can help us use resources more efficiency and increase productivity, reduce the production of waste, harmful emissions and pollution, and decrease our dependency on raw materials. Preparations are already underway for the implementation of changes in global regulation and the enforcing of certain international standards. For example, a law has been proposed in Europe that, by 2030, would deny entry to any products that cannot be recycled, and would ban the use of disposable plastic products. Circular economy is a global trend, and learning about it would allow the development of new models, like selling services rather than goods, industrial symbiosis, using 3D printing to conserve raw materials, etc.
The transition to a circular economy in Israel has already begun
As part of the Heschel Center’s efforts to assist the Israeli government in developing a national strategic long-term plan in a collaborative multi-sector process, a steering committee has been established with the Israel Democracy Institute and the OECD as a consulting body. The circular economy model is one of the strategic tools for carbon emission reduction in Israel’s national plan for 2050. The Ministry of Economy is therefore currently helming a national plan for the integration of circular economy in the industrial sector. The Heschel Center for Sustainability is aiding in the formulation of this national circular economy plan. As part of this effort, it is promoting learning processes based on knowledge from the Netherlands. With the support of the Dutch embassy, we have invited Mr. Arnoud Walrecht, a world-renowned expert on circular economy, to speak as guest lecturer at a workshop for the creation of Israel’s circular economy plan led by the Ministry of Economy.
The transition to a circular economy in the Netherlands
The Netherlands are currently leading the world in the transition to a circular economy, for which they have developed a comprehensive national plan. The Dutch plan outlines the country’s policy and vision for the year 2050, along with a series of milestones to be hit along the way. It includes ambitious goals, like achieving a 50% reduction in the use of raw materials by the year 2030, and designing materials and products for circular use that minimizes the amount of waste at the end of the product’s life. It also details numerous practical ideas for meeting these goals, which are now being implemented. The Dutch government is applying multiple policy tools to the task of achieving a fully circular economy, and adopting a systems approach that incorporates local governments, as well as the civilian and commercial sectors.
The Netherlands have recognized the incredible economic potential that lies in the transition to a circular economy – in the field of innovation and business development, in the cultivation of Dutch expertise in circular product design, and in the expansion of Dutch exports. According to a study conducted by the Netherlands Organisation for Applied Scientific Research (TNO), the transition to a circular economy in the Netherlands will generate an extra annual turnover of 7.3 billion Euros, create 54,000 new jobs and reduce the use of raw materials by approximately 100,000 kilotons (one quarter of the Netherlands’ current annual import of raw materials). A circular economy can lead to an estimated additional growth of between 1.5 billion Euros (in a ‘business as usual’ scenario) and 8.4 billion Euros (in a maximum circular economy scenario). These benefits, of course, are joined by the additional advantage of improved public health, and the reduction of greenhouse gas emissions according to the Netherlands’ commitment in the Paris accords.