The Difference between Circular Economy and Blue Economy
February 2015, I published a blog explaining the basics of Circular Economy (CE) for entrepreneurs and CEOs. As you can read in the conclusion, I think CE has a lot of potential and benefits. Not only that, rethinking energy and resource use is an absolute necessity. However, as I offer an online service (translations), I find it challenging to come up with solutions of closing the loop. What is my waste? Someone asked me if I had read the book The Blue Economy: 10 years – 100 innovations – 100 million jobs. She said the concepts sounded somewhat similar. Indeed, both try to rethink how we use our planet and come up with solutions for how we can do better.
Therefore, in this blog, I want to revisit CE and summarize the blue economy, so you have an overview of what both concepts mean. I hope that it will make you aware of the opportunities and wonder what you can do to make a change for the better.
What is Circular Economy?
The Ellen MacArthur Foundation defines the CE as an industrial economy that is restorative by intention. It aims to rely on renewable energy; minimizes, tracks, and hopefully eliminates the use of toxic chemicals; and eradicates waste through careful design. The term goes beyond the mechanics of production and consumption of goods and services, in the areas that it seeks to redefine. Examples include rebuilding capital including social and natural and the shift from the consumer to the user.
Design to fit
A major outcome of taking insights from living systems is the notion of optimizing systems rather than components, which can also be referred to as ‘design to fit.’ It involves careful management of materials flows, which are of two types in the CE: biological nutrients, designed to re-enter the biosphere safely and build natural capital, and technical nutrients, which are designed to circulate at high quality without entering the biosphere.
As a result, the CE draws a sharp distinction between the consumption and use of materials: CE advocates the need for a ‘functional service’ model in which manufacturers or retailers increasingly retain the ownership of their products and, where possible, act as service providers—selling the use of products, not their one-way consumption. This shift has direct implications for the development of efficient and effective take-back systems and the proliferation of product- and business model design practices that generate more durable products, facilitate disassembly and refurbishment and, where appropriate, consider product/service shifts.
TedEd has summarized this nicely in a video.
What are the principles of Circular Economy?
The Ellen MacArthur Foundation names five simple principles on which CE is based. If you want to read more about these principles, please visit their overview.
- Design out waste. Waste does not exist when the biological and technical components (or ‘materials’) of a product are designed by intention to fit within a biological or technical materials cycle, designed for disassembly and re-purposing.
- Build resilience through diversity. Modularity, versatility, and adaptivity are prized features need to be prioritized in an uncertain and fast-evolving world.
- Work towards using energy from renewable sources. Any circular story should start by looking into the energy involved in the production process.
- Think in ‘systems’. The ability to understand how parts influence one another within a whole, and the relationship of the whole to the parts, is crucial.
- Think in cascades. For biological materials, the essence of value creation lies in the opportunity to extract additional value from products and materials by cascading them through other applications. The complete biological entity should be considered.
What is Blue Economy?
The Blue Economy (BE) expresses the ultimate aim that a BE business model will shift society from scarcity to abundance with what is locally available, by tackling issues that cause environmental and related problems in new ways. The book highlights potential benefits in connecting and combining seemingly disparate environmental problems with open-source scientific solutions based upon physical processes common in the natural world, to create solutions that are both environmentally beneficial and have financial and wider social benefits.
The book proposes to focus on the generation of more value, instead of blindly cutting costs. This book aims to inspire entrepreneurs to adopt its insights, by demonstrating ways in which this can create economic benefits via job creation, reduced energy use, and more revenue streams from each step of the process, at the same time benefiting the communities involved. Every chapter offers many examples of how it can be done. I have read the Dutch version, but the book has now been translated into over 30 languages, so you can probably find one that is easy to read for you.
This video explains the BE in 3.5 minutes.
What are the principles of Blue Economy?
On the site of theblueeconomy.org, you can find a list of 21 principles:
- Solutions are first and foremost based on physics. Deciding factors are Pressure and Temperature as found on site.
- Substitute something with nothing – question any resource regarding its necessity for production.
- Natural systems cascade nutrients, matter, and energy – waste does not exist. Any by-product is the source for a new product.
- Nature evolved from a few species to a rich biodiversity. Wealth means diversity. Industrial standardization is the contrary.
- Nature provides room for entrepreneurs who do more with less. Nature is contrary to monopolization.
- Gravity is the main source of energy; solar energy is the second renewable fuel.
- Water is the primary solvent.
- In nature, the constant is change. Innovations take place in every moment.
- Nature only works with what is locally available.
- Nature responds to basic needs and then evolves from sufficiency to abundance. The present economic model relies on scarcity as a basis for production and consumption.
- Natural systems are non-linear.
- In nature, everything is biodegradable – it is just a matter of time.
- In natural systems, everything is connected and evolving towards symbiosis.
- Natural systems share risks. Any risk is a motivator for innovations.
- In nature, water, air, and soil are the commons, free and abundant.
- In nature, one process generates multiple benefits.
- Nature is efficient. Therefore, sustainable businesses maximize the use of available material and energy, which reduces the unit price for the consumer.
- Nature searches for the optimum for all involucrated elements.
- In nature, negatives are converted into positives. Problems are opportunities.
- Nature searches for economies of scope. One natural innovation carries various benefits for all.
- Respond to basic needs with what you have, introducing innovations inspired by nature, generating multiple benefits, including jobs and social capital, offering more with less.
What is the difference between Circular Economy and Blue Economy?
Well, there are other concepts that relate to CE and BE too: cradle2cradle and biomimicry. Circle-economy.com says that the circular-economy concept is based on a rich tradition that started around 1970. It incorporates schools of thought including cradle to cradle, industrial ecology, biomimicry, and blue economy.
It believes that “circular economy currently provides the most holistic and innovative approach to how we should organize our society, businesses and personal lives in order to be future-proof. The concept challenges us to approach economic, social and ecological challenges from a systems perspective, to prevent solving one issue (for example, energy use) while having a negative impact on another (for example, health).”
Conclusion Blue Economy
I like how these concepts make you change the way you think about production, consumption and our relation to nature. What I liked best about the book The Blue Economy is the fact that there is no waste in nature; any by-product is the source for a new product. That makes me feel the urge to rethink what we consider waste. I like how the book and the video show how that works. I feel this book gives me more practical examples than what I found in my search for information on CE, as that only talked about big brands and multinationals. So, overall, I think CE is the bigger picture while BE is the smaller-scale version with practical tools.
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