Circular economy - the future of sustainable development

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Dnipro University of Technology

CIRCULAR ECONOMY - THE FUTURE OF SUSTAINABLE DEVELOPMENT

Olena CHURIKANOVA

Oksana DENYSENKO

Annotation

circular economy global state

The work is devoted to the analysis of the main principles and approaches to the introduction of the circular economy concept at the state level. The article contains both the theoretical foundations of the introduction of the circular economy, the conceptual apparatus and the analysis of practical cases of the successful introduction of the principles in the global space. In addition, the main problems that may stand in the way of the successful implementation of the circular economy at the state level are outlined. The paper considers the main aspects of the introduction of the concept of circular economy at the state and regional levels. The conceptual apparatus of the circular economy is presented and illustrated, the differences and advantages in comparison with the generally accepted system of the linear economy are noted. Also, the structure of the circular economy at the micro, macro, and meso levels is considered in detail in the work, the key aspects of implementation in the spheres of production, consumption, waste management, and development support are noted. Considerable attention was paid in the study to the tools for the introduction of the circular economy both at the state and regional levels and at the level of other subjects of economic activity. The circular economy toolkit proposed for analysis was considered both in terms of the economic effect of its introduction, and from the point of view of the presence of a certain number of problems for each of the tools. The identified problems on the way to successful application of circular economy tools outlined the vector of further research in this direction with the aim of accelerating the transformation processes of the transition from a linear to a circular form of economy.

Keywords: circular economy, green economy, linear economy, green economy, circular economy implementation levels, circular economy tools.

Анотація

Олена ЧУРІКАНОВА, Оксана ДЕНИСЕНКО

Національний технічний університет «Дніпровська політехніка»

ЦИРКУЛЯРНА ЕКОНОМІКА - МАЙБУТНЄ СТІЙКОГО РОЗВИТКУ

Робота присвячена аналізу основних принципів та підходів запровадження концепції циркулярної економіки на державному рівні. Стаття містить як теоретичні основи запровадження циркулярної економіки, понятійний апарат, так і аналіз практичних кейсів успішного запровадження принципів в світовому просторі. Крім того, окреслено основні проблеми, які можуть стати на заваді успішного запровадження циркулярної економіки на державному рівні.

Ключові слова: циркулярна економіка, зелена економіка, лінійна економіка, зелена економіка, рівні запровадження циркулярної економіки, інструменти циркулярної економіки.

Introduction

The need for rapid development of the Ukrainian economy was and remains a priority issue. For more than a decade, Ukraine has been striving to catch up with the leading European countries in terms of GDP per capita, strives to provide Ukrainians with jobs with an appropriate level of wages, strives to develop light and heavy industry, agriculture. Along with this, the state strives for the formation of a healthy nation that will breathe clean air and drink the cleanest water. Is it possible to combine all these components to ensure both the rapid development of the country's economy and the preservation of natural resources and the improvement of environmental conditions. Yes, there is such a way, and it is called the circular economy. The trend of the state's economic development, which is based on the principles of circular economy, has been moving confidently through European countries for a long time and is slowly but surely beginning to gain a foothold in Ukraine. Reformatting the Ukrainian economy from linear to circular will have a significant number of advantages, including the creation of new market niches, for example, processing, service, industrial design, as well as the development and introduction of new business models. Along with this, it will be extremely necessary to develop a state incentive program, introduce technological innovations and attract investments. The benefits of introducing a circular economy for both the state and society cannot be overestimated, including general renewal and improvement of the economy, energy and resource conservation, reduction of unemployment through the creation of new jobs, reduction of carbon emissions and general improvement of the environmental situation.

So, we see that the issue of the transition to a circular economy is very relevant in terms of the development of our country both at the national and regional levels. And this indicates the need for active involvement of scientists in conducting research in this direction.

Analysis of recent research and publications

Many foreign and Ukrainian scientists are dealing with the issue of introducing a circular economy within the country. Among the scientists of the foreign arena, the works of Boken N., Olivetti E.A., Ghiselini P., Fletcher K. and others can be singled out [1-7]. Domestic research - presented by such scientists as S. Miroshnychenko, A.A. Tovstenko, N.L. Avramenko, K.M. Barytska and others [8-11].

The topic of research in the direction of the circular economy is immersed in such issues as social and economic consequences, problems and prospects of the introduction of the circular economy. But, despite the sufficient amount of research in this direction, the topic is so acute and new that the available amount of research has not formed the final concept of the transition to a circular economy both at the level of the state and regions in particular, and therefore the initiation of further research in this direction remains relevant.

The purpose of this paper is to determine the prerequisites for the introduction of the concept of circular economy at the state and regional levels, to identify a number of problems that may stand in the way of a successful transition to a circular economy, and to outline further prospects in this direction.

Experimental part

The circular economy (circular economy, closed-loop economy, circular economy) is an alternative to the classical linear economy based on the principle of "production - use - disposal". In a linear economy, most of the extracted natural resources turn into waste.

In a circular economy, the chain "resource extraction - production - consumption - disposal" is closed in a continuous cycle in which waste serves as a renewable resource for production. The repeated use of the same raw material reduces environmental damage and reduces waste generation by up to 80%.

Circular Economy Principles

1. Producing durable and reliable products, moving away from "planned obsolescence" where a short-lived product is created to encourage new purchases that quickly breaks down, goes out of fashion, or loses manufacturer support.

2. Possibility of repair. Things can be repaired and used for as long as possible without buying new ones, although the "fast" economy has taught us to throw away what is broken.

3. Reuse. Many goods can serve repeatedly.

4. Modernization and updating. Many technical devices can be replaced with new ones not completely, but partially, updating certain parts, for example, in order to increase energy efficiency.

5. Recycling and reuse. Most of the waste, including packaging waste, can be recycled and returned to the production cycle. Secondary raw materials are more accessible, save natural resources and reduce carbon dioxide emissions.

6. Sharing, renting and sharing.

7. Virtualization of goods and services (reduces the consumption of resources for production).

According to research by the Ellen MacArthur Foundation, on a global scale, the transition to a circular economy will:

- Reduce energy and resource consumption by 25%;

- Replace 50% of primary resources with secondary ones;

- Double the life of your products.

Based on the principles of the circular economy, both state programs for the separate collection and processing of waste, and programs of private companies, for example, for the use of their own production as recyclable materials, are built.

Where did the circular economy come from and how is it developing?

The foundations of this concept were formulated by the American economist and sociologist Kenneth Boulding in 1966 in his essay "The Economics of the Future Spaceship Earth". True, he called his theory "open economy", and the term "cyclical" appeared later, in the works of Western economists in the 1970s and 80s.

Over the past decades, interest in the circular economy has grown markedly against the backdrop of oil crises, the depletion of easily accessible natural resources and environmental pollution.

Today, the approaches of the circular economy are actively used by both businesses around the world and governments, most systematically in Europe, due to which by 2030 the total annual income of their countries will increase by €1.8 trillion.

The achievement of many of the Sustainable Development Goals adopted by the UN in 2015 depends on the introduction of circular economy approaches, especially “Responsible consumption and production”, “Affordable and clean energy”, “Sustainable cities and towns”, “Combating climate change”, "Conservation of marine and terrestrial ecosystems".

Criticism of the cyclical model of the economy

The current industrial economy is largely based on a linear model of resource consumption, which follows the principle of "withdraw - produce - throw away". As a result, the industry-based economy loses significant value and has a negative impact along the entire value chain. It is clear that there is an urgent need for a new industrial model that would reduce dependence on primary energy sources and inputs and help restore natural capital. The desire for significant improvements in resource efficiency across the economy is forcing businesses to look for ways to reuse products or their components and recover more of the material, energy and labor inputs. The concept of the circular economy has been recognized as an effective solution, and since the late 1970s it has become increasingly popular.

Unlike the traditional linear model of production and consumption, in which goods are made from raw materials, sold, used, and then discarded or incinerated as waste, the cyclical economy implies no waste and promotes the continuous use of resources. The Ellen MacArthur Foundation defines a circular economy as "an industrial system that is restorative or regenerative in design and structure". It replaces the concept of "end of life" with the concept of recovery and transition to renewable energy sources, eliminates the use of toxic chemicals that prevent recycling, and aims to eliminate waste through improved design of materials, products, systems and, in light of the above business-models 1.

The concept of "circular economy" can be broadly interpreted as a system in which the value of goods, materials and resources is maintained in the economic cycle for as long as possible. This model offers a profitable opportunity to move away from resource-intensive processes, increase the return on existing assets, and create new revenue streams, thus making production and consumption processes more sustainable and competitive. The ultimate goal is to delink global economic development from the consumption of scarce resources.

The circular economy is based on the following backgrounds:

a) Preserving and improving natural capital by managing scarce reserves and balancing renewable flows. The use of appropriate technologies and processes allows, wherever possible, to use renewable sources or resources with a higher rate of return, for example, replacing fossil fuels with renewable energy sources;

b) optimization of resource productivity by introducing goods, components and materials into both technical and biological cycles with maximum impact at all stages of such cycles. This is expressed in the fact that the development of products provides for the possibility of its re-production,

With all the obvious advantages of the cyclical economy, of course, it also has disadvantages: