Advantages and disadvantages of the circular economy

2 min. reading
Circular economy / 14 May, 2021
Advantages and disadvantages of the circular economy

Karla García Gil Journalist

The circular economy is a form of production and consumption that goes beyond the traditional “3 R’s” (reduce, reuse and recycle) and adds in its model the sharing, renting, repairing and renewing of products and their materials as many times as necessary, in an attempt to confront a linear economy that has devastated ecosystems and the environment over the years to its limit.

The circular economy takes into account all the processes involved in the production of a product, from manufacturing to the choice of packaging material, and has three main objectives: to eliminate waste and pollution, to keep products and materials in use and to regenerate natural systems.

This model of economy is based on renewable energies and materials, and seeks to optimize the power of digital technologies to the maximum.

Circular economy as a strategy for sustainability

Circular economy as a strategy for sustainability

Learn about the benefits of the circular economy and why it is ideal to invest in the creation of a sustainable and eco-friendly economic system.


  • Less extraction of virgin raw materials.
  • Reduced consumption of fossil fuels.
  • Extending the useful life of products through actions such as recycling.
  • Decrease in waste generation.
  • Innovation and economic growth.
  • Allows for a change in consumption habits.
  • Greater independence in terms of imports and agility in supply.
  • Creation of new jobs.


  • Lack of regulations governing legal competition among companies.
  • Lack of environmental awareness on the part of suppliers and clients.
  • Economic barriers and access to financing.
  • Technical skills and abilities that are not yet present in the workforce.
  • Presence of waste that is difficult to recycle and transform.
  • Consumer acceptance problems.

According to a World Bank report “What a waste 2.0” by 2050, the world is expected to generate around 3.4 billion tons of waste per year, representing a 70% increase from the current 2.01 billion tons. The report adds that at least 33% of the total waste generated today is not treated.

For example, in Europe, plastic production has grown exponentially in recent decades; however, only one third of this material is recycled.

But it is not only large European, Asian or U.S. cities that are involved in the problem. It is estimated that each person living in the Latin American and Caribbean region generates around one kilogram of garbage per day, which translates to some 231 million tons of waste per year, of which more than half is food, and only 4.5% of total waste is recycled.

Approximately one third of the waste is recyclable materials such as paper, cardboard, glass and plastic. Meanwhile, almost 15% of organic waste comes from rural areas, areas that tend to generate wet waste and green waste.

How to invest in Circular economy?

From BBVA New Gen we have compiled the companies and investment funds that are dedicated to Circular economy find out how to invest in the companies that are revolutionizing the sector

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