A Linear Economy vs a Circular Economy: Unpacking the differences

The universally accepted term for our current economic model is called the Linear Economy. There are many ways to describe it, and mostly it is accepted to be unsustainable — essentially taking out resources with no way to replenish the sources.

The power in a Linear Economy

The culture to extract resources, transport these resources fast distances, then add value from a centralised facility, distribute the products again over fast distances, consume it, and then discarding it after use is the Linear way of doing things. Topping off this system is the use of coal and oil to provide the energy needs for the various functions required. Overall a Linear Economy is very effective at supplying consumers with products that satisfy their needs. It also drives the economic processes that powers governments and companies.

When looking at the current Linear process that’s been evolving since the Industrial Revolution, humanity can be proud of the ways we have overcome various challenges to enable a globally linked economy. The achievements during this timeframe are remarkable. The system offers humans the opportunity to sell their time by working for money that can be utilised towards purchasing affordable products, and services in relation to their income. The system ensures the availability of energy, transport, food, medical care, water, accommodation, and many other essential goods and services. The Linear Economy counts on humans consuming more and more as to drive seemingly never-ending growth potential.

The problem with it

The problem is that the Linear Economy’s growth is based on the assumption that we have access to more than one earth’s resources. Currently, we need just about two earths and by 2050 we will need the resources of three earths to ensure that the required growth will take place. Growth is the fundamental Linear economic mechanism required for this thing to work.

Here and there humans have realised that we need to look after resources, however we have been spectacularly ineffective in recycling. You don’t have to search for examples about our failure with this concept, just look at the increasing size of our landfills and the amount of plastics in our oceans. The solutions to the problem are somewhere else, it has to address all economic activities, and shortcomings of the Linear Economy.

This is where the Circular Economy comes into play. 

This was the second of a ten-part series on what the Circular Economy is, and what we can do to become active in this space, whether as individuals, groups, and institutions. For further reading visit The African Circular Economy Network  and The Ellen Mcarthur Foundation.

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