An introduction to the circular economy

The environmental benefits of circular economy practices largely center around how raw materials are repurposed and retooled for new and ongoing uses. A linear economy, on the other hand, has little regard for the ultimate end-life of a product — where it goes, how it’s disposed of, what it becomes, and its ultimate consequences for the environment. 

Linear economic models are all about maximizing the volume of the product. Consumers are beginning to see this paradigm as an outmoded production approach that has been in place for too long.  

People have awakened to the environmental benefits of circular economy practices, particularly in the wake of the pandemic. Citizens are more conscious of how nearly all resources are effectively limited resources. They have begun considering new strategies and opportunities to move toward circular economy mastery.

However, moving away from the deeply entrenched model of the linear economy involves looking at the principles of value chain vs. supply chain, interrogating value chain and supply chain, and deeply rethinking the automotive value chain in particular.

Consider that the auto industry Canada is familiar with includes an auto repair industry Canada holds to a high standard of ethics. Repair personnel and manufacturers both develop technology meant to extend the life of a vehicle and ensure that, when it reaches the end of its lifespan, it can be broken down and repurposed as new usable material. This is how automobile companies’ circular economy policies ultimately up their savings and efficiency.

Nothing underscores the priority better than the Circular Cars Initiative (CCI) – a coalition of over 60 automakers and suppliers, along with research institutions working to make this ambitious value chain mapping a reality. The CCI works together with both the World Business Council for Sustainable Development (WBCSD) and Accenture Strategy to lay the groundwork for this all-important auto industry transition. 

Its first report looks at how the current compliance setup can be adjusted to accelerate vehicle electrification while implementing low carbon technology adoption and providing end-of-life management incentives that will establish a more robust circular economy. All these efforts expedite the environmental benefits of a circular economy transition.

Electric cars are not only here to say – they are quickly becoming the global standard that is gradually revolutionizing the entire auto industry. Even many former naysayers have gotten on board and grown excited by the promise of electric innovation. 

In part, people have seen how the advent of electric cars has led to a change in how cars are made and used altogether. Manufacturers are now mindful of the circular economy Canada understands as a production ideal that increases efficiency, eliminates waste, and actually elevates the lives of both consumers and the environment.

Business models can’t evolve without a customer base that actually values sustainable consumption. Both companies and consumers play a critical role in how the auto industry will move toward a circular economy. 

Consumers can help the process by researching which automakers are making strides toward eco-conscious manufacturing practices and specific end-of-life policies for their products. They might ask: Does this car come with a plan for when it has run its course? What options have been put in place to keep it out of the landfill?

The European Green Deal sets a valuable template for other countries to follow in adopting these kinds of policies and plans. Under the Green Deal, sustainability labels display upfront the environmental impact associated with particular products and purchases — including an end-of-life plan and options for repairs and replacement. 

This kind of vetted and standardized labeling system backs a product’s marketing claims much like a nutrition label. While the label is not currently mandatory on all products, it does serve as a worthwhile step in raising the consciousness of consumers and lowering their skepticism of the price of a product in relation to its environmental claims. 

The Green Deal likewise influences the role of producers by asserting the environmental benefits of circular economy practices and generating a public demand for sustainable products. Right-to-repair policies and transparent corporate reporting draw customers toward brands and manufacturers who demonstrably share eco-conscious values. 

Currently, many aspects of the Green Deal still need to be concretized, particularly in terms of funding. But the ground is being laid and expanded consumer awareness touches home goods and appliances to food, clothing, electronics, and everything in between.

The CCI has challenged manufacturers to adopt green energy policies that will meet climate requirements in their own production process and also help consumers cut down on waste and emissions. The plans it has put forward are on track to reduce the consumption of natural resources by as much as 80% and also eliminate carbon emissions by 75% per passenger. 

The CCI platform is designed to keep the industry abreast of business models and best practices that will speed up circularity and promote great carbon neutrality. Leaders across the industry are seeing new possibilities in designing vehicles geared around the circular economy. The cost of sourcing eco-conscious materials and parts will continue to decrease, making green initiatives more feasible. 

More and more, both the public and private sectors see the environmental benefits of circular economy strategies. These changes will gradually create a cleaner, more affordable world where every car will have the option of electric power along with the ability to reduce its carbon emissions during its lifespan and be effectively recycled once its lifespan is complete.

Do check out our other articles on sustainable mobility.