Learn more: http://cmr.berkeley.edu/browse/articles/60_3/
In a circular economy, materials are reused as much as possible. And new business models can promote resource efficiency by maximizing the value of what we already produce.
There are five major characteristics of a circular economy:
1. Circular supply chain. All products should be designed to use fully recyclable or biodegradable materials.
2. Recovery and recycling. All waste byproducts should be optimized for revenue potential.
3. Build products to last. Discourage replacement of products by using durable materials, and offering to refurbish, refill, or repair.
4. Sharing platform. Let multiple customers use the same resources. Most cars sit idle for 92% of the time. Ride sharing is more efficient than individual ownership.
5. Product-as-a-Service model: Companies can be incentivized to consider longer product lifecycles by leasing products, instead of selling them. Michelin now sells tires as a service, where customers pay by miles driven.
Based on the article "Introducing a Circular Economy: New Thinking with New Managerial and Policy Implications" by Mark Esposito, Terence Tse, and Khaled Soufani
For more information, please read California Management Review's special issue on the Circular Economy (Volume 60, Issue 3)
Volume 60, Issue 3