Economic Programs Expert O. Khomenko for the Ukrainian association of the Sinologists “Ukraine – China”, 12/2018
The second industrial revolution was a kick-start for the dominance of the linear model of production and consumption, which led to the aggravation of man-made problems and an increase in the deficit of natural resources. According to the study of the International Consulting Company KPMG “Future state 2030”, climate change and scarcity of natural resources are among the global megatrends of the nearest future. And among the seventeen UN Sustainable Development Goals, seven are aimed at overcoming environmental problems. Therefore, in the context of the Fourth industrial revolution, in order to ensure the sustainable development of states, the paradigm of the production model is changing: from linear to circular.
The circular or closed-loop economy is a model of economic development, which is based on the rational use of resources and their recovery. It is based on three principles named “3R”: reduce, reuse, recycle. The closed-loop economy creates opportunities for sustainable development of states and the formation of competitiveness. The advantages of this model are:
- innovative and resource-efficient ways of production and consumption;
- protecting businesses from scarcity of resources and volatile prices;
- optimal waste management;
- energy savings due to the closed production cycle;
- reduction of negative impact on the environment.