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The idea of a circular economy turns on the current linear model of resource extraction, usage and disposal on its head.
It aims to design out waste, eliminate toxic chemicals, and transform product design. This means going beyond simply increasing recycling and instead reducing the creation of waste in the first place, intentionally using the waste that remains as new economic inputs.
The rationale for this is economic as well environmental. Global demand for resources is rising, scarcity is increasing, wasteful resource use costs large amounts of money, and digitalisation is allowing for greater disruption of traditional business models.
A healthy natural world is a necessary precondition for healthy societies. Hunger cannot be kept at bay without fertile soil, long term economic planning is impossible in a world of persistent catastrophic storms. In many ways, the fundamental benefits of nature to our economies is not included in how markets and governments value economic decision-making.
Natural capital, a concept that underpins the Government’s 25 year plan for the environment, seeks to calculate the value of those bits of nature that are typically seen as being free. The idea is that putting a figure on the value of nature will lead to better decisions by government and in markets. Some reject this idea, questioning how a value can be put on the aesthetic beauty of a river or on the value of the global nitrogen cycle.
HM Treasury's Dasgupta Review in 2021 marked the first time a finance ministry has published a comprehensive analysis of the relationship between economics and the protection of nature. Our analysis and summary of the review can be found here.