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The Circular Economy Paradigm

By Yolanda Villegas - VEMO
Director, Legal, Compliance and Institutional Relations


By Yolanda Villegas | Director - Mon, 11/14/2022 - 11:00

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The circular economy is an economic system whose main objectives are reduction, reuse and recycling of materials in the processes of production, distribution, and consumption of goods. The model seeks to replace the linear economy model, which has been historically the predominant economic system. In contrast, the circular economy paradigm seeks to create economic processes that include not only economic growth but also environmental protection and social equity for the benefit of current and future generations.

The concept of circularity starts from the design and conception of a product in the same way as the traditional model; however, the circular model departs from the traditional model as it must consider how the product and its materials would be reused and recycled to avoid creating unnecessary waste.

Therefore, the circular economy model requires a two-way logistics system, where products are transported from production centers to the final consumer and, once they fulfill their objective or purpose, they can return to the market or back to the production centers instead of going directly to their final disposition, reducing waste

This implies that planned obsolescence must disappear, and products must last for a much longer time. For this to happen, it is necessary to prepare future generations and develop basic skills that drive circular innovation. On the other hand, there is a need to create new business models that allow the generation of alliances where all the actors in the production chain share the same ideal that can be replicated and expanded to other regions.

Consequently, the circular model requires the exchange of knowledge between the various actors in society   —academia, industry, and the government — in such a way that virtuous circles can be created so that innovation is generated and promoted that allows it to achieve its prompt implementation.

Government support is critical to achieving these goals, as key actors must have access to tools to support the expenditures that innovation and development require. Governments can cover some of the risks associated with the implementation of new models that seek to develop the circular economy. Effective collaboration between chains and sectors is essential for the establishment of agreements, support, and the creation of collaborative networks between actors.

The circular economy and the energy transition are closely related concepts, since one cannot be implemented without the other. For instance, energy efficiency plays a very important role in circularity, since it allows reducing the energy intensity consumption required by a product when it is manufactured, transported, distributed, or even used in households by the final user. Energy efficiency is an example of how a decrease in  energy intensity consumption contributes to reducing carbon footprint.

In Mexico, the circular economy is already on the public agenda of both federal and subnational governments. For instance, in 2019, the state of Quintana Roo was the first to enact a Law for the Prevention, Comprehensive Management and Circular Economy of Waste. That same year, Mexico City established its Zero Waste Program based on the circular economy and its local Congress is working on the elaboration of a Circular Economy Law. These actions could be soon adopted by other states or municipalities in Mexico in order to introduce circular economy principles in local legislations.

Nevertheless, there is still a long way to go, since the regulation for production processes, recycling and final disposition is in its infancy in many parts of Mexico and the federal government has not yet enacted a Circular Economy Law for the country. However, Mexico has contributed through instruments pointed at special and hazardous waste-producing industries that are required to implement and observe special waste management plans. These plans are focused on single products, materials, or waste.

Fortunately, many companies have not only implemented these waste management plans, but they have also started to innovate to create new processes and products to reduce their impact and promote circularity. The use of resources turns out to be an ideal option to contribute to sustainable development, since it implies the use of resources and, therefore, the reduction of waste.

Finally, the principle of the circular economy also applies to water management, which requires special emphasis because  it is the most important resource for sustaining human life and the proper development of societies. For this reason, the circular economy promotes programs that improve the proper management of the resource. The collection of rainwater, the treatment and reuse of wastewater in production processes, or the use of sludge generated by wastewater as fertilizers in agriculture, are good examples that derive from circular economy principles.

In conclusion, the circular economy paradigm is important because it provides a transversal set of principles that could be adopted not only in multiple industries but also in different components of the production and consumption chain, hence helping to achieve global sustainable goals and creating a resilient economic system for the future.

Photo by:   Yolanda Villegas

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