Towards the Circular Economy Vol.1 – Economic and business rationale for an accelerated transition

In the face of sharp volatility increases across the global economy and proliferating signs of resource depletion, the call for a new economic model

is getting louder. In the quest for a substantial improvement in resource performance across the economy, businesses have started to explore ways to reuse products or their components and restore more of their precious material, energy and labour inputs. The time is right, many argue, to take this concept

of a ‘circular economy’ one step further, to analyse its promise for businesses and economies, and to prepare the ground for its adoption.

How does the circular economy compare to the race to improve efficiency within today’s ‘take-make-dispose’ economy? What are the benefits of a restorative model to businesses and the economy? How can companies and policy makers carry the concept to its breakthrough at scale? Can some of today’s fundamental shifts in technology and consumer behaviour be used to accelerate the transition? To answer these questions

for the European Union, our researchers sought to identify success stories of circular business models, to determine what factors enable these success stories, and to glean from these examples a better sense of which sectors and products hold the most potential for circularity, how
large this potential might be, and what
the broader economic impact could look like. In doing so, we reviewed about a dozen mainstream products reflecting various circular design concepts, undertook economic analysis for key resource-intense business sectors, and interviewed more than 50 experts1. What came out clearly resembles a 16th century map more than an exact account of the complete economic benefits. But it is a promising picture, with product case study analyses indicating

an annual net material cost savings2 opportunity of up to USD 380 billion in a transition scenario and of up to USD 630 billion in an advanced scenario, looking only at a subset of EU manufacturing sectors.