Limited Resources and the Vision of a Circular Economy

Technology is boosting the idea of a zero-waste framework in which everything is used, reused and recovered.
October 25, 2016
By Bob Graves  |  Contributor
Associate director of the Governing Institute and a co-founder of Governing's parent organization, e.Republic

Natural resources like water, minerals, oil and timber are the feedstock of an economy. The predominate pattern of their use is a linear flow of resources into manufactured goods and then on to consumers, product end of life and, finally, disposal. There are, of course, serious problems with this linear-flow, consumption-oriented economy, not the least of which is resource depletion.

But is there another way? Yes, say those who advocate for moving toward a "circular economy," one in which materials would no longer be consumed but rather would be used and then fully recovered to be remanufactured again and again -- ideally with no degradation and of equal quality to virgin materials. "In the circular economy we are no longer consumers and there's no end of life for products," noted Ellen MacArthur at a recent conference. "We are all just users."

MacArthur is the founder of the Ellen MacArthur Foundation, which is based in the United Kingdom and whose mission is to accelerate the transition to a circular economy. The core principles of this whole-system approach can be found in "Cradle to Cradle: Remaking the Way We Make Things," the 2002 book by William McDonough and Michael Braungart. The book's concept is that, just as in nature all material is broken down into reusable biological nutrients with no resulting waste, manufactured goods should be designed to make all of their components non-toxic and fully reusable. Theoretically, the circular flow of these materials would make it possible to decouple growth from the depletion of earth's finite natural resources.

An essential component of a circular economy is being able to comprehensively track the flow of materials. That's a big challenge, but advocates see technology, in the form of the emerging Internet of Things (IoT), as key to making that happen. A recent MacArthur Foundation report, "Intelligent Assets: Unlocking the Circular Economy Potential," delves into the issue of how advances in technology can be harnessed to do much more than simply make the existing linear economy more efficient. It seeks to answer the question of whether embedding circular-economy principles in smart connected systems and devices could make an economy less resource-dependent and even self-regenerative.


IoT enables remote monitoring of assets over the internet, even while those assets are being used. Making assets intelligent (able to sense, record and communicate information about themselves and/or their surroundings) provides a whole new level of insight into a system. In fact, it holds the key to changing from an ownership pattern for goods to one that might be called "everything as a service."

Take mobility, for example. The ability to plan a trip, book transportation and pay for it through a single mobile app erodes the value of owning a car. The arrival of fully autonomous self-driving cars is likely to erode that value even further. Why own a car when, for a fraction of the cost, you can access one any time of the day or night?

As for the cars themselves, IoT will provide real-time data about a vehicle's condition through embedded sensors that communicate not only the car's location, speed and proximity to other things but also data on movement or vibrations, strain and torque, leaks, temperature. and moisture. The car could even generate an alert when its critical parts require repair or replacement. Then, when repair costs become excessive, the car could be deconstructed, with its fully reusable components reentering the circular economy to be incorporated into another car or some other manufactured good.

Clearly the circular economy offers what amounts to a resource productivity revolution. The linear model of take, make, waste is unsustainable. The circular economy may well provide an answer to the question of how mankind can continuously expand economic growth on a finite planet without destroying it.