Benefits of a Circular Economy in 5 Ways
Circular economy is a holistic concept in creating a closed-loop product value chain. Thus, there are many benefits of circular economy that can be felt by many parties. Here are 6 benefits that can be felt by implementing a circular economy.
1. Reduce the use of finite resources
In the early days of the industry, people believed that natural resources could be exploited to the fullest because they were unlimited. But nowadays many researchers are aware that over time natural resources will not be able to meet human needs.
The benefits of a circular economy is can reduce the use of finite resources. It can be happen where waste will be reused into alternative resources that can replace virgin resources.
For example, the application of a circular economy in the textile industry can reduce the use of resources to make new clothes such as fossil fuel, cloth, and water. So that lifestyle changes such as thrifting using second hand garments will be a new breakthrough that can change the textile industry in the future.
2. Reduce emissions
Currently, almost all industrial sectors produce GHG emissions that contribute to climate change. The circular economy strategy on an industrial scale is predicted to reduce 39% or around 22.8 billion tons of gas emissions so as to reduce the adverse impact of climate change.
For example, food loss and waste accounts for a third of gas emissions in America and China. Thus, a circular economy can be applied in the food industry to overcome the problem of food loss and waste.
3. Boost economies and profitability
Circular economy is able to improve the financial performance of companies that implement circular economy activities. according to McKinsey, of the 28 industries that participated in his study, all expressed the benefits of circular economy activities. These activities include regenerate, loop, exchange, virtualize, share, and optimize or abbreviated as ReSolve.
4. Protect human health and biodiversity
The old economic practice that only applies take-make-dispose has resulted in a lot of pollution. Based on the facts, this pollution affects human health and decreases biodiversity.
Therefore, the next benefits explains that the circular economy is able to protect human health and maintain the biodiversity of living things. This is because the circular economy emphasizes the importance of utilizing existing waste as a resource so that it does not become pollution for living things.
In fact, the world produces 57.4 million metric tons of e-waste in 2021. Even every year, the world produces 300 million tons of plastic waste. If not treated properly, this waste can be a disaster for humans and living creatures around them.
5. Create more and better jobs
According to the ILO, the circular economy can create 6 million jobs. Various circular economy activities such as recycling, repair, rent, and manufacture will open up more opportunities for people to work.
These jobs will replace previous jobs such as extraction, creation, and disposal activities. So that by opening up these jobs, the community is expected to be more supportive of the transition to a circular economy.