Stock photo by VecteezyA few years ago, the Indian Prime Minister, while announcing the national vehicle scrappage policy scheme for the Auto Industry, spoke about the Circular Economy. He said it would help phase out unfit and polluting vehicles and also promote a circular economy.Now, let us understand the concept and benefits of the Circular Economy.The Circular Economy is effectively a model for how we can optimize the value of the world’s resources, and reduce waste and consumption of raw materials. It is an economic approach aimed at eliminating waste and the continual use of resources, circular economy offers a new paradigm that emphasizes the need to take a comprehensive view of products and processes. A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment. In contrast to the ‘take-make-waste linear model, a circular economy is regenerative by design and aims to achieve sustainable growth gradually.To understand the Circular Economy concept, we must understand the more prevalent and long-standing Linear Economy model. The Linear Economy is still the most common practice in all sectors today. Uses a ‘Take’ – ‘Make’ – ‘Dispose’ model. The focus is on production and consumption. We need more raw materials and therefore create more waste.  It is not a sustainable model. Projected use is far outstripping the limits of the world’s resources. Circular Economy works on the basis that as the World’s natural resources and raw materials run out, they become progressively more expensive. According to experts, the circular economy gives us the tools to tackle climate change and biodiversity loss together while addressing important social needs. It gives us the power to grow prosperity, jobs, and resilience while cutting greenhouse gas emissions, waste, and pollution.Some of the key principles that drive resource efficiency are reduce, reuse, recycle, refurbish, redesign, and remanufacture. Reduce means to require less use of material, reuse is the use of goods or items again by a different set of consumers or by re-purposing them for a different use, recycle means the transformation of the good into raw material that can be reshaped into a new item, refurbish means restoration of a used product for its intended use by performing minor alterations, redesign means to rethink the design of a product to minimize the use of materials, facilitate recyclability and reduce environmental impacts, and remanufacture means rebuilding a product to specifications of the original product using reused, repaired and new parts.The circular economy is relevant to all sectors of the economy. Examples of its successful implementation exist in different countries and sectors. The circular economy holds particular promise for achieving multiple SDGs (Sustainable Development Goals).In recent years the European Commission approved an action plan to boost Europe’s transition to the circular economy. In December 2019, the European Green Deal was presented, a roadmap for transforming the European economy into a modern, resource-efficient, and competitive one. As part of the Green Deal, the new Circular Economy Action Plan was approved, with measures for businesses, public authorities, and consumers to adopt a sustainable model. Some of the countries to adopt it were Finland, the Netherlands, France, Italy, Spain, Belgium, and Germany.It is important to note that there are many global and Indian companies that are involved in circular economy activity and contributing to sustainability through circular economy practices. Some of the leading companies that have initiated the Circular Economy practices are GFL Environmental (GFL), Republic Services (RSG), Waste Management (WM), Patagonia, Ikea, H&M, Unilever (UL), and Interface. A few firms engaged in innovative and eco-friendly disposal practices in India are Eco Recycling, Gravita India, Antony Waste Handling Cell, and others. Stocks of the Circular Economy Companies are actively traded across the stock markets. According to experts, the circular economy stocks are a promising investment opportunity, and companies that embrace it can gain a competitive edge. In 2020, the global circular economy market volume amounted to 148 billion euros, according to a study by the German Federal Ministry for the Environment and the consulting firm Roland Berger. Based on their 2021 findings, they also anticipate market growth of up to 263 billion euros by 2030 (Source: Deutsche Bank)Nations across the world are taking initiatives to achieve this objective. The Indian government is already taking a lot of initiatives towards this goal. The need of the hour is a development model that leads to the optimum utilization of resources. According to the government, the key to recent policy initiatives of Aatmanirbhar Bharat is sustainable growth. The Government has been actively formulating policies and promoting projects to drive the country towards a circular economy. It has already notified various rules, such as the Plastic Waste Management Rules, e-waste Management Rules, Construction and Demolition Waste Management Rules, Metals Recycling Policy, etc., in this regard.More By This Author:Economics For Everyone – Managing Through Monetary Policy – US And India Economics For Everyone: 70 Hours Of Work – Labour Vs Leisure Economics For Everyone: 2023 Nobel Prize In Economics – Goldin’s Gender Gap