A circular economy aims to redefine growth, focusing on positive society-wide benefits. It entails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the system. In a circular economy, economic activity builds and rebuilds overall system health. The concept recognises the importance of the economy needing to work effectively at all scales – for large and small businesses, for organisations and individuals, globally and locally. Underpinned by a transition to renewable energy sources, the circular model builds economic, natural, and social capital. It is based on three principles: 1. Design out waste and pollution; 2. Keep products and materials in use; 3. Regenerate natural systems.
The circular economy is primarily concerned with the flows of materials and energy, and it is often taken as a given that this circulation can happen within a growing economy. However, the demand for materials and energy needs to be considered in the context of the limits of a finite planet. Materials can keep circulating through being designed for disassembly and remanufacturing, or kept in use longer through being designed for durability.