Much has been written about the “circular economy” in the last couple of years, and I am often asked about the difference between the circular economy and zero waste. The focus of both is on eliminating waste and maximizing the use of our natural resources. I went looking recently to see if there are any important developments or differences between circular economy and zero waste, and what I found is an exciting synergy between the two with the potential for really shaking up the waste industry.

First, let’s establish what is meant by the circular economy.

According to the Ellen MacArthur Foundation, a leading circular economy advocacy organization:

A circular economy is restorative and regenerative by design, and aims to keep products, components, and materials at their highest utility and value at all times… it is a continuous positive development cycle that preserves and enhances natural capital, optimizes resource yields, and minimizes system risks by managing finite stocks and renewable flows.

This sounds a lot like what we called the zero waste economy nearly 20 years ago when the Zero Waste International Alliance said:

“Zero Waste means designing and managing products and processes to systematically avoid and eliminate the volume and toxicity of waste and materials, conserve and recover all resources, and not burn or bury them. Implementing Zero Waste will eliminate all discharges to land, water or air that are a threat to planetary, human, animal or plant health.”

In fact, the circular economy and zero waste are both part of the same vision for a more sustainable, prosperous planet. The business sector is the primary driver behind the circular economy because there is a clear financial opportunity and communities are the primary driver behind zero waste because there are clear social and environmental benefits. Both co-exist and need each other.

Large manufacturers are the early implementers of circular economy activities, just as they were the first big movers toward zero waste practices. That is logical since manufacturers clearly see waste as a sign of inefficiency and reducing waste directly saves money.

More importantly, it is necessary that big business gets involved with the circular economy because they have the power to influence many “upstream” waste problems in how materials are sourced, which materials are chosen and how products are designed for reuse and recovery. By cleaning up the supply chain and design practices we can reduce the polluting natural resource extraction practices that often disrupt and cause great harm to indigenous people around the world, toxic processing and manufacturing practices and the industrial design problems that make products and packaging difficult to reuse in any way.

My main interest, however, is not corporations but the rest of society—the community, the local government, the schools and the small- and medium-sized businesses. We don’t have the concentrated power or funds to make large-scale change happen quickly, so what is the path forward for the circular economy for the rest of us?

The answer to that question comes to us from circular economy and zero waste practitioners over in the United Kingdom. Stated clearly by the Waste & Recycling Action Programme (WRAP) when they say they are “working at all points of the circular economy by making resource use more efficient, reducing the production of waste, maximizing the recycling of waste and identifying alternative business models.

What do they mean by alternative business models? That is the key to understanding how the implementation of the circular economy and zero waste is moving forward. The discussion of new business models is generally not a common topic in America, the land of uber-capitalism and competition, because anything other than the pursuit of profit in business is viewed skeptically. But the problem is that traditional capitalistic marketplace drivers have not, generally speaking, brought us either zero waste or circular economies.

So the way forward to create community benefit from the circular economy is to expand the zero waste story and have serious community discussions around creating new business models!

Here is a great list from Zero Waste Scotland of what new business models might be waiting ahead for the next generation of clever entrepreneurs:

Examples of circular economy business models:

  • Hire & Leasing: Hire or leasing of products as an alternative to purchasing.
  • Performance/Service System: Providing a service based on delivering the performance outputs of a product where the manufacturer retains ownership, has greater control over the production of a product, and therefore has more interest in producing a product that lasts.
  • Incentivized Return: Offering a financial or other incentive for the return of ‘used’ products. Products can be refurbished and re-sold.
  • Asset Management: Maximizing product lifetime and minimizing new purchase through tracking an organization’s assets, planning what can be re-used, repaired or redeployed at a different site.
  • Collaborative Consumption: Rental or sharing of products between members of the public or businesses, often through peer-to-peer networks.
  • Long Life: Products designed for long life, supported by guarantees and trusted repair services.

Someday we can hope that these new business models are profitable activities, but at this point in time we need to help these ideas get off the ground by creating public-private partnerships and “social enterprises” where making money and fulfilling a social mission are equally important. The idea of marrying social enterprise with the new circular economy and zero waste business models is exciting and starting to happen in Scotland, England, Australia, Brazil and other places, and needs to get a higher profile in America in the future.

The Ellen MacArthur Foundation is an important group to watch as they appear to be succeeding in “bringing together complimentary schools of thought to create a coherent framework, thus giving the concept a wide exposure and appeal.” In the U.S., the Social Enterprise Alliance is working to create community conversations about new business models, as is the Institute for Local Self-Reliance.

Indeed, bringing together the circular economy with zero waste and social enterprise is making this a very exciting time to start actualizing some new ideas in the waste/resource management industry.

Eric Lombardi is the executive director of Eco-Cycle International and has had a long career in community resource conservation, social enterprise development and non-profit (NGO) organizational management since 1980.