Digitalization, circular economy and climate change: How the union of those concepts can ameliorate our societies


Today’s prevalent economic model is a linear one: raw materials are extracted, processed into final products that are used and once they reach their end of use are typically discarded and replaced with new ones. 

As the world is rushing to meet climate goals by 2050, shifting to a circular economy is seen as paramount in order to reach these goals. 

A circular economy model not only ensures resources are recovered and products are designed to play a role in the economy for as long as possible. This model helps preserve the earth’s resources and prevents the accumulation of waste in landfills.

Executive Vice-President for the European Green Deal, Frans Timmermans, said: “To achieve climate-neutrality by 2050, to preserve our natural environment, and to strengthen our economic competitiveness, requires a fully circular economy. Today, our economy is still mostly linear, with only 12% of secondary materials and resources being brought back into the economy. Many products break down too easily, cannot be reused, repaired or recycled, or are made for single use only. There is a huge potential to be exploited both for businesses and consumers. With today’s plan we launch action to transform the way products are made and empower consumers to make sustainable choices for their own benefit and that of the environment.”

Digitalisation is seen as key to accelerate transformation into a resource-efficient economy. So far most initiatives are in the form of individual projects that focus on physical materials and resources. According to the World Economic Forum however, a truly circular solution must work on a global scale and to achieve this, a strong and coherent digital foundation would support and accelerate circularity across businesses and industries. The impact such a foundation would have would be similar to that the internet has had during the last 30 years as society has turned more digital.

To build a digital foundation for a circular economy, the Circular Economy Internet Society, has identified five characteristics that are essential for its implementation:

  1. A global public good: The digital foundation should be politically, competitively, and commercially neutral public good so that so that not one person, organisation or government controls it. 
  2. Many-to-many interoperability: It must allow for seamless and trustworthy interactions in exchange of information and transactions anywhere in the business ecosystem.
  3. Open software platform: Being designed as an open source platform, allows innovators and companies to bring individual added-value while contributing differentiating factors and maintaining interoperable applications.
  4. Eliminate monopolisation: The owner of the data must be able to control its sharing, in this manner, monopolising digital circular economy businesses is eliminated.
  5. Shared digital economy toolbox: Helps reduce costs, time and risk in creating new business models based on the circular economy. 

Apart from the environmental benefits, a circular economy with a digital foundation also has significant benefits for society. Reuse of materials means products last longer and as more economic practices are encouraged, such as leasing instead of owning or buying used items results in an increased disposable income. As new industry types emerge, despite concerns of some jobs like coal mining being taken away, new and more types of jobs are created. Furthermore, a digital circular economy promises better health as reliance on pesticides and industrial agricultural chemicals is reduced.


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