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Journal number 1 ∘ Ramaz Abesadze
Circular Economy: Essence and modern challenges


The vast majority of modern economies are characterized by the patronage of natural resources - the economic value of resources is not maximally used. Such economy, that is based on the growth of profit, is called a straightforward economy on the maximum satisfaction of today's demands. The linear (straightforward) economies have limited resources that are not effectively used and a large number of waste have a negative impact on the environment.The circular economy is the opposite of  linear economy, which is focused on the maximum utilization of economic value of the natural resources and minimal pollution of the environment.

Key words: circular economy, Linear economy, waste, Environment, Protection of nature


Nowadays world is facing two major challenges, first of all, the world reserves of resources are gradually expiring and it is necessary to keep them as long as possible,until the alternative resources are not solved, renewable resources should be used to maintain robust nature.And secondly, economic growth threatens humanity, because of the intensification of global and local ecological problems.Also, the importance of the problem is that in the future it will be harder to obtain resources and the demand for them will increase. Therefore, the resources will rise and the nature of the measures will be increased in parallel.

The essence of the circular economy

One of the most important ways to solve the problem is  formation of the circular economy, unlike of linear economy where the principle operates:use of raw materials for production of products and waste (that can still be used for production) is discharged and contaminated.The circular economy is a recovery system, in which resources and waste are minimized. The main concept of the circular economy is rational useage of natural resources.Business responsibilities in linear economy are guaranteed when the product is already in the hands of the consumer and decides where to place the waste.

The principle  of  circular economy is the maximal useage of resources, in the conditions of minimal stimulus to the environment.This is achieved by using renewable resources and recycling of secondary raw materials [The circular .. 2013] Scheme of circular economy:Resources - Products - Waste - Resources. Therefore, not only increase, but also the protection of natural resources, some of them (forest, soil, recreational, etc.).Under the conditions of linear economy, there is a danger of rapid expansion of natural resources, climate change and environmental degradation, and the chain of production chain reduces this threat simultaneously and gives new opportunities to the economy [Giorgadze. 2016].

This model implies: the resources received from nature are maximally used during several life cycles, including:on the one hand, environmental protection and, on the other hand, rational use of resources, which in itself positively reflects the improvement of human health and renewal process of nature;The use of such raw materials which is less harmful to the environment; Use of renewable energy sources; Innovative business opportunities, etc.

Although 100% circuit economy cannot be achieved, the residue will always exist and consequently environmental impact will always be. However, there is no better model of sustainable development and it will be much more than natural in case of non-use.

                                               Development of the Circular Economy

The circular economy is unmatched for the whole world, regions and individual countries.Nowadays, the world is focused on the formation and development of the circular economy.In this respect, Europe is leading. The European Parliament and other EU institutions pay much attention to the circular economy.In particular, in 2015 the European Commission adopted an "ambitious new package for the EU" (An Ambitious ... 2015).They also created a platform for the cooperation of stakeholders (European ... 2018). These documents are aimed at facilitating transition to European circular economy.The European Union is trying to make its economy more sustainable and in January 2018 the European Commission adopted a "European Action Plan for Circular Economy" [an EU action ... 2015] action plan that includes:EU strategy in the circular economy on plastic products.By 2030, all packaging of plastic should be recycled throughout the EU.The Strategy provides the need for specific measures to be adopted, that  implies:Legislative instruments that will reduce the effects of a single use of plastic on the environment, especially on the oceans and oceans;Legislation that determines the connection between waste, products and chemicals; At the national level, the development of the circuit economy's progress monitoring framework comprising 10 indicators.These indicators include all phases:Production, consumption, waste management and secondary raw materials. Economic aspects are also envisaged:Investments, jobs and ovations; Reports of raw materials and circular economies and others [Melkadze  2018].

In early 2017, the European Commission summed up the work of a circular economy program a year ago and presented a financial platform [EU Commission ... 2017].He has received a comprehensive package of measures to assist entrepreneurs and users to move to a circular economy when resources are used more rationally.It states that the earth and economy cannot live if we continue to act on the principle: "Take, use, turn it".Humanity must retain resources and utilize their economic value as a whole.The transition to the circular economy is being implemented by the European Foundation for Strategic Investment, through the program "Horizon 20" and structural funds and investing in the circular economy of the state [EU Commission ... 2015].

The world's attention fuels Finnish innovations. Finland was one of the first to get a national road map of the circular (circular) economy in 2016-2025. As large enterprises and startups are actively involved in this way, considering the circular economy in their business. There is also a rich experience in Switzerland. 

                                                Changes in the economic system 

The aim of the circular economy is to reduce waste and environmental protection, for which it is necessary to change the economy cardinally.

The principle of linear economy is: more, better, faster. The circular economy is focused on maximizing the use of resources and improving ecological conditions, that's why it reduces the economic growth rates, but ecological threats and the mileage of resources forced entrepreneurs to introduce a circular economy,while the States and their associations, and international organizations to promote them.Changing the circular economy leads to changes in the economic system, in all its elements:In the nature of the proprietor (the owner often prefers not to sell the product but to rent, not the creation of new products, but also repairs, reconstructions, reboots, renovations), technologies (the rule of production is new, which is focused on neutral, non-polluting and not only profit growth) In physical capital (a new technique is played Humans' capital (the elements of human capital are replaced by new knowledge, new technologies, new physical capital, new forms of production, new institutions, innovations, new manufacturing processes in human capital) And so on. Institutions (new laws, normative acts, regulatory bodies are created, changing the function of markets and other institutions, etc.). It is directly related to innovative processes, since achievements can not be made without relevant changes in education, science, inventiveness, entrepreneurship. Thus, the transition to the circular economy leads to changes in the economic system.

The linear economy is much more focused on the present, circular economy - both on the present and on the future.

Circular Economy in Georgia

Serious practices have not taken place in the formation of circular economy in Georgia, but some institutional grounds have been prepared for this.First of all, the Law of Georgia on Environmental Protection (1996) should be noted.The main objectives of the law are to protect basic human rights - live in a healthy environment and enjoy the natural and cultural surroundings;Ensure environmental protection and rational use of the state, safe environment for human health in accordance with the ecological and economic interests of the society and taking into consideration the interests of the present and future generations; To promote the biological diversity, preservation of rare and endemic species of flora and fauna characteristic of the country, protection of marine environment and ecological equilibrium; To preserve and protect the original landscapes and ecosystems [of Georgia ... 1996];Three national programs of environmental protection of Georgia have been adopted today.The first program includes 2000-2015, second, 2012-2016, third, 2016-230 years. After the first program, Georgia's cooperation with international financial institutions and various donors has improved.The second national program was prepared with the participation of the broader spectrum of stakeholders and with the support of the Netherlands Government.It included long-term objectives, short-term objectives and concrete measures for ensuring sustainable development of the country [Georgia ... 2012].

The third program reflects Georgia's environmental priorities and defines strategic long-term goals, tasks to be implemented within the next 5 years and specific actions that are necessary to improve the environment.The main goal of environmental policy is the country's sustainable and balanced development, where environmental and socio-economic challenges are discussed in one plane.One of the most important tasks of environmental protection is the prevention of adverse environmental impacts that are caused by socioeconomic activities, reduction of already existing negative impacts and improving environmental conditions that will allow future generations to live in healthy environment in the long run.The focus is on the challenges in the process of approximation with Georgia.The Third National Program for Environmental Action has been developed in view of the following major political tendencies:"Association Agreement between Georgia and the European Union"; "UN Sustainable Development Goals" and the international environmental agreements on which Georgia represents [Georgia ... 2016].

The closest circular economy is the Law of Georgia - "Waste Management Code".It is based on the directives and regulations in the field of EU waste management.

On the basis of this Code, the Government of Georgia adopted "National Strategy for Waste Management 2016-2030 and 2016-2020 National Action Plan", that has been developed in accordance with the Requirements of Directives for the Waste Management Code and the EU-Georgia Association Agreement.The strategy is to harmonize the process of waste management in Georgia with the European waste management policy.The National Action Plan for Waste Management has been developed in order to implement the strategy.The strategy is in line with the international conventions in which Georgia participates(Basel Convention on Transboundary Transport of Hazardous Waste and their Placement Control), "Stockholm Convention on Sustainable Organic Pollutants", "Minamata Convention" on Mercury, etc.).

The objectives of the Strategy are: elaboration, implementation and enforcement of waste management legislation relevant to EU requirements and international conventions;Establishment and implementation of waste management planning system at national and local level;Establishment and implementation of efficient system of waste collection and transportation;Ensuring safe and safe transportation of waste to human health and environment; Waste prevention, reuse and recycling and / or restoration;Complete removal of waste management costs in accordance with the "Pollution Practice" Principle; Promotion and implementation of the expanded liability of the manufacturer;Establishment and implementation of waste data and information management system;Strengthening Public Sector Capacity at National and Local Levels;Also, facilitate the enhancement of the capacity of private companies and raise public awareness [waste ... 2015].

The waste management system in Georgia is still unresolved, it does not comply with international requirements, still functioning unregulated and illegal landfills, continuing protection of protected areas and tourist complexes and other areas, companies do not fully comply with existing legislative requirements, etc. The situation is particularly bad in the regions.

In Georgia, except for small cases (such as glass bottles, paper, glass, plastic, etc.), there is no development of waste separation, prevention, recycling and restoration.

According to the Code, the indicator - the expanded obligation of the manufacturer, which obliges the manufacturer to reduce the amount of waste, and this indicator imposes responsibility for the collection, separation and processing of waste, for further restoration.Introduction of this indicator will naturally facilitate rational use of resources and improve waste management system.Since August 2016, the Company has been obliged to enter into a number of types of waste and their use of waste.

The general aim of creating waste management system of Georgia is:Introduction of waste management practices in compliance with the EU-Georgia Association Agreement and the legal requirements of international conventions ratified by Georgia at national level.For this it is necessary to adopt a number of laws (e.g law on waste processing waste).


The following conclusions can be made by the research:

  1. Circular economy scheme: resources - products - waste - resources. Therefore, not only the growth, but the sustainability of natural resources, some of them increase, the circular economy is a recovery system,in which resources and waste are minimized.The main concept of the circular economy is the rational use of natural resources.Business responsibility in the linear economy is guaranteed when the product is already in the hands of the consumer and decides where to place the waste.
  2.  Nowadays, the whole world is focused on the formation and development of circular economy.In this respect, Europe is leading. The European Parliament and other EU institutions pay much attention to the circular economy. In particular, the following documents are accepted:An Ambitious New Circular Economy Package for EU, "The European Circular Economy Stakeholders Platform for Platform for Stakeholders."European Economic Action Plan for Action" (An EU action plan for the Circular Economy). These documents are aimed at facilitating the transition to Europe's economic economy, practically implemented.The world's attention is drawn to Finnish innovations in the sphere of circular economy and has a rich experience in Switzerland;
  3.  Circular economy reduces economic growth rates, but ecological threats and resource mobilization forces entrepreneurs to introduce a circular economy, and states and their unions, and international organizations to encourage them.. Changing the circular economy leads to changes in the economic system, in all its elements:In the nature of property, technology, physical capital, human capital, institution.It is directly related to innovative processes, since achievements can not be made without relevant changes in education, science, inventiveness, entrepreneurship.Thus, the transition to the circular economy causes the changes in the economic system;
  4. The linear economy is more focused on the present, circular economy - both on the present and on the future;
  5. No serious practical steps have been taken on the formation of circular economy in Georgia, but some institutional grounds are prepared for this. These documents are:The Law of Georgia on Environmental Protection has adopted three national, Georgian law - "Waste Management Code" of environmental protection of Georgia;
  6.  "National Strategy for Waste Management 2016-2030 and National Action Plan 2016-2020";
  7. Waste management system in Georgia is still unresolved, it does not comply with international requirements, still functioning unregulated and illegal landfills, continues to be protected by protected areas and tourist complexes,As well as the destruction of other territories, companies do not fully comply with existing legislative requirements.The situation is particularly bad in the regions. The practice of waste separation, prevention, reuse and recycling is not developed; 

Taking into consideration the experience of foreign countries, it is possible to elaborate some of the activities of the formation of circular economy in Georgia:

  1. Adopting new laws on a circular economy, such as the Law on Mining of Waste Waste;
  2. Setting tariffs for waste utilization to allow customers to sort their products;
  3. Establishment of training and consulting centers, circuit economics clubs, where consultations and trainings for lecturers, students and business circles will be organized by highly qualified specialists in this field,Including recommendations from abroad, as well as recommendations for the creation of alternative technologies for the development of separate business organizations and the Government's Waste Management Plan, as well as the provision of a system of living systems.
  4. Cooperation with the European Commission "European Platform for Interest in the European Circular Economy" (European Circular Economy Stakeholders Platform);
  5. For enterprises that will process waste, tax privileges are used;
  6. Establishment of state enterprises that operate in the principles of circular economy and others
  7. Creating new renewable products (which are then recycled and used again);
  8. Creating a system of solid waste collection;
  9. Fertilization from wood or biofuel (biodegradable waste of food and other industry, timber waste, bark, sawdust, grapes, etc.);
  10. . Restoration, reconstruction, modernization of old age; Reboot; Up-to-date, almost all kinds of production, including arable lands [Тши-Шан Ту. 2018];
  11. Enhance energy efficiency;
  12. Utilization of alternative energy resources;
  13. Establishment of production for services and not production of goods;
  14. An extensive use of Arand for all kinds of goods that will be returned to the taxpayer as a profit and resource (waste), the consumer will be exempt from waste disposal expenses;
  15. The introduction of wastes separation, prevention, re-use, recycling and restoration procedure (initially should be emphasized on the following waste:Batteries, vehicles taken from the use, oils, packaging materials and waste of electronic goods.


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