Understanding Circular Economy and its Potential Impact on the Construction Industry

The construction industry is responsible for over 35% of the extraction of natural resources and 30% of the world’s solid waste. This happens because the construction sector mostly applies a linear economic model of “take, make, dispose of”, using materials to construct buildings, dispose of them at the end of their life, as they are assembled for single-use, and have no potential for reuse. In the last few decades, a paradigm shift has taken place across the industry, with the adoption of a circular economy model that aims to keep materials in a closed loop to maintain their maximum value, and thus greater potential for reducing waste generation, environmental impacts, and resource extraction for the construction industry throughout the design, procurement, construction, and operations. This research aims to identify the latest developments in how a circular economy can benefit the construction industry through long-term life-cycle value creation, and what changes need to be made to embrace a circular economy. To achieve this goal, a systematic literature review, case study analysis, and an interview study were carried out. The analysis of the case study has confirmed that by adopting the principles of the circular economy in the construction of the people’s pavilion, ARUP has achieved economic, environmental, and social benefits as well. After conducting the whole analysis we can conclude that moving away from a 'take, make, and dispose of' consumption model, circular economy strategies can help on our journey towards a net zero economy along with financial gains. This research has identified why and how construction companies should make efforts to execute CE in their projects to attain financial and social benefits along with environmental benefits. This study will be helpful for countries like United States as it provides them with the route to initiate CE in the construction sector to control the scarcity of resources.