Circular economy vs. linear economy

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13 August, 2019

In a previous blog post we discussed the principles of the circular economy and in this post we will compare the circular economy to the linear economy, going on to discuss the advantages of the former model. However, we must firstly understand that a linear economy is a model which is based on production, consumption and waste.

The linear economy responds to an industrial mentality in which production and resources are considered to be unlimitd, and economic benefits are placed above all other criteria. This system dates back to the Industrial Revolution, and it has been the prevailing model in the market ever since. Nonetheless, the linear economy is becoming unsustainable and it presents various problems which will have severe consequences in the short, medium and long term:

  • Overproduction. Many products are placed on the market in large shipments and not all of the products end up being sold. This leads to excess stock which the company will lose money on.
  • Reduced life cycles. The accelerated production and consumption rates lead to a proportional generation of waste. Likewise, the introduction of new models of a particular device and the so-called planned obsolescence, in particular in the case of technological products, means that before long the old version will have become obsolete. While this may generate short-term revenue for the company, it can have a negative impact on the users’ economy.  
  • Accumulation of waste. These accelerated life cycles provoke the unbridled accumulation of waste, which in many cases can be harmful to the environment. A clear example of this is plastic, a material which doesn’t necessarily form part of the product itself, but of its packaging. This waste contributes to global warming and the onset of climate change.
  • Depletion and over-exploitation of natural resources, leading to the increased cost of said resources. This is applicable to raw materials such as minerals and fossil fuels.

The circular economy helps to tackle many of these problems while also reducing costs. C-VOUCHER’s main goal is to exchange these traditional value chains for circular models

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By Catherine WeetmanOwn work, CC BY-SA 4.0, Link

The circular economy as a new economic model

When faced with an industrial panorama, dominated by these characteristics, a paradigm shift to a sustainable growth model is the only way forward. The circular economy is a more resistant and flexible model which is capable of adapting to the market needs. That is why C-VoUCHER is focusing its efforts on providing support to the companies that are launching initiatives in which they implement this model. Our current projects tackle real problems. We are ready and willing to do whatever it takes to bring about real and tangible changes to the industry in conjunction with the companies which are participating in our program.

  • Product rental services can be implemented to prevent overproduction and increase the product life cycles. In this way, the excess products can be reused on numerous occasions, which in turn will also make them more profitable. This will also lead to a reduction in the production of certain products, guaranteeing a more responsible volume of production.
  • Alternatives, based on the idea of reuse and recycle are introduced to help tackle the accumulation of waste and the depletion of resources. For example, collection points which offer incentives to users for bring their used batteries or light bulbs. These products can be reused by the companies, helping them to reduce their expenditure and prevent contamination.
  • Renewable energy sources are proposed as an alternative to finite and polluting energy sources. The progressive depletion of fossil fuels will lead to increased costs, meaning that research into and the implementation of solar, wind and hydraulic energy sources is not just an ecofriendly solution but it can also be a profitable one.

C-Voucher contributes to the creation of sustainable business models through its acceleration program. The participating companies receive mentoring services and the possibility of accessing funding (equity-free). This is how we are doing our bit to support sustainable development.

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