How A Closed-Loop Economy Could Lead to a Sustainable Future

Thoughts on the Closed-Loop Economy, or Circular Economy, and its relation to sustainability.

By Amanda Winstead

It’s becoming increasingly clear that global recycling efforts are essential to protect the environment and ensure a more sustainable future. Every year, nearly 300 million tons of plastic products are created, but, unfortunately, only a small percentage of that plastic actually gets recycled. The rest ends up in landfills, pollutes the oceans, or gets incinerated, which produces carbon emissions.

As such, manufacturers and economies as a whole need to be more mindful about the materials they use and produce — including what happens to those products at the end of their life cycle. At the current rate, the resources we rely on will run out.

This means economies or local governments not only need to make recycling programs and recycling facilities more widely available, but manufacturers need to be more sustainable by producing less waste in the first place. They can do this by finding ways to reuse materials from existing products rather than throwing them out and manufacturing new ones.

This concept of using less and throwing less away is the basic idea behind closed-loop, circular systems.

What Is a Closed-Loop, Circular System?

From an ecological viewpoint, a closed-loop system is something that already exists in nature — the circle of life. It’s the idea that everything in nature goes through a cycle of generation, use, decay, and then regeneration — meaning nothing goes to waste, and everything that dies serves a greater purpose, as it feeds back into nature and can help new things come to life.

This same concept can be applied to material waste and recycling. For decades, our society has primarily relied on a linear system, which means we take natural resources, use them to make things, and then dispose of those things when we’re done with them. The problem is that this type of open-ended system doesn’t make up for what it’s taking away. It’s all take and no give, and that is not sustainable.

In contrast, a closed-loop system is more focused on making, using, and recycling or repurposing. Instead of always taking natural resources, this model relies more on making from things that already exist and are a part of the system, which is what makes it a closed loop.

One World Flag: Closed-Loop Economy Could Lead to a Sustainable Future
Photo by Markus Spiske

How Does the Closed-Loop System Apply to Economies and Businesses?

From a manufacturing or economic standpoint, a closed-loop economy, or circular economy, relies heavily on recycling and repurposing materials instead of creating new ones. It’s the idea of trying to recycle and reuse over and over again, creating a continual loop, rather than having to break the loop to take from outside resources.

For example, most things that we create or manufacture in our economy require resources like fossil fuels, minerals, and metals which cannot be renewed once we run out. We also rely heavily on renewable resources like water and trees, but we are using them at such high rates that these natural systems are struggling to regenerate.

While a closed-loop recycling system will still occasionally have to rely on outside resources — even recyclable materials can only be used so many times — it will still significantly reduce waste production and the need for resources. A circular or closed-loop economy will slow down the use of non-renewable resources and give renewable resources more time to regenerate.

This is essential not only for us to continue to have the products and materials we need, but it’s also necessary to keep nature from dying and going extinct. When we constantly take without giving back, it severely disrupts natural ecosystems and the natural circle of life. We are so concerned as a society with having material things that we don’t think about the thing we need most of all to go on living: the planet.

What Are the Benefits of a Closed-Loop Economy?

There are numerous benefits to doing more with less. A closed-loop economy can:

  • Reduce waste ending up in landfills — There is only so much space for our trash to go, and at our current rate, the average landfill only has about 15 years until there is no room left.
  • Decrease pollution — Reusing raw materials rather than mining and creating means less air pollution and consumption of energy. The less energy we use, the fewer fossil fuels we burn, which helps reduce carbon emissions. Recycling and reusing materials also helps keep waste from polluting local water sources and oceans.
  • Lower resource consumption —The more we recycle and reuse, the less we need to take from renewable and non-renewable resources, which gives nature more time to rebalance itself.
  • Create overall sustainability — Economies and manufacturers that use a circular system are stronger and more sustainable because they rely more on themselves rather than on outside resources which aren’t always available.

Closed-Loop Business Models

There are countless ways a business can start creating a more closed-loop system within its manufacturing processes. A few current models include:

  • Circular supplies — Using renewable or fully recyclable materials to replace single-use materials;
  • Resource recovery — Recovering resources or energy from disposed products or byproducts;
  • Product life extension — Extending product life cycles by repairing, upgrading, and reselling;
  • Shared platforms — Increasing utilization rates by providing shared access;
  • Product as a service — Providing multi-access points to a product while retaining ownership of the product.

Carbon neutral product packaging, for example, is becoming increasingly popular amongst companies looking to use closed-loop systems and reduce their carbon footprint. According to the EPA, of the 290 million tons of product waste that is generated annually, a significant amount comes from packaging alone.

Another more specific example includes Nike’s closed-loop supply chain process. As of 2018, more than 75% of all Nike products contain recycled textiles.

For Days, a new fashion startup, is also making waves with its closed-loop business model. Customers of For Days pay for a subscription that provides them with a bundle of shirts. After those shirts are worn down, customers send them back and receive a new bundle made from the used threads of previous clothing items.

These are just a couple of examples of the many companies that are starting to jump on the closed-loop train. And not only does becoming a more sustainable company benefit the environment and local economies, but it also benefits the business itself. The federal government has started offering financial incentives for going green, such as tax credits and special loans.

Final Thoughts

With waste production and resource consumption continually on the rise, a closed-loop economy and closed-loop business models are imperative. We have reached the point where if drastic changes aren’t made now, it could cause irreversible damage to the planet. And while many governments and businesses are focusing on positive things like carbon offsets to reduce greenhouse emissions, it’s not enough.

At this point, recycling and reusing are just as crucial as reducing. While reducing carbon emissions does help, it doesn’t address the linear system problem of taking and not giving back. Thus, economies and manufacturers must start focusing on closed-loop systems just as much as they focus on other solutions to achieve more environmentally beneficial results.