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  • Here's an idea. What if you never had to buy a lightbulb again?

  • Instead, you lease light, like you lease a car or an apartment.

  • It's just one idea that's part of the circular economy.

  • Before we can understand the circular economy, well, it helps to define the linear economy.

  • Most organizations today operate in the linear economy which is based on a 'take, make, and dispose' model.

  • So, for example, a lightbulb company takes resources, like glass or metal, to manufacture its products.

  • The company makes the bulb and sells it to a customer like me who uses it.

  • Once the lightbulb burns out, I dispose of it.

  • It's likely neither the company nor I will ever see that lightbulb again.

  • For a lightbulb company to make money in the linear economy, it tries to buy materials

  • for the lowest cost possible and to sell as many bulbs as possible.

  • This model operates as if there are infinite resources, like glass or metal, in the world.

  • But you and I know that's not the case.

  • That's why the circular economy treats materials like they're finite.

  • A company in the circular economy doesn't just recycle products but maintains ownership of them all along,

  • so the model looks more like this, make, use and return.

  • Let's go back to the lightbulb example.

  • Instead of buying bulbs, this office in London leases its light from Philips Lighting.

  • It signed a 15-year lease for the service and pays a fee each quarter.

  • Philips still owns the actual lightbulbs and provides

  • maintenance and replacements when needed, no extra cost.

  • This model gives Philips the incentive to produce energy-efficient lightbulbs

  • and it saves the office money with fixed lighting costs.

  • It's a radically different business model that makes companies more like service providers

  • than sellers of a physical product.

  • And it turns out lots of companies are looking for ways to get involved.

  • Take H&M, one of the world's largest clothing retailers.

  • It's working on a strategy to become 100 percent circular.

  • The company collects old garments in its stores and recycles them.

  • Since 2013, H&M says it has gathered more than 55,000 tons of fabric to reuse for new garments.

  • Some governments are getting on board with the circular economy, too.

  • The European Union adopted an action plan in 2015 aiming to make supply chains,

  • you guessed it, more circular.

  • This includes everything from production to consumption,

  • repair and manufacturing, and waste management.

  • The point isn't just to become more 'green' and create environmental benefits,

  • there could be economic benefits too.

  • One report estimated a shift toward the circular economy in the E.U.

  • could increase GDP by an additional 12 percentage points by 2050.

  • But moving from the linear economy to the circular economy also brings costs.

  • Companies would need to redesign their supply chains and products

  • in order for them to be used again and again.

  • Manufacturers might be burdened when it comes to the actual logistics of disposing and recycling.

  • A recent report found only 22 percent of U.K. companies are trying to generate value

  • from products that are returned for reuse, recycling or refurbishing.

  • It's estimated the cost of transitioning to a fully efficient reuse and recycling system across Europe

  • could be as much as 108 billion euros, roughly 130 billion dollars.

  • Cost is one thing. Changing people's mindsets is another.

  • And that's what it'll take for the circular economy to go from an idea to reality for everyone.

  • Hey guys, it's Elizabeth, thanks so much for watching!

  • You can check out more of our videos over here.

  • We're also taking your suggestions for future CNBC Explains, so leave any ideas in the comments section.

  • And while you're at it, subscribe to our channel. See you later!

Here's an idea. What if you never had to buy a lightbulb again?

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循環型経済とは?| CNBCが解説します (What is the circular economy? | CNBC Explains)

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    kstmasa に公開 2021 年 01 月 14 日
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