Short series: Circular Economy in brief. Part 1. Introduction
Author: Alonso Muñoz Solís
The aim of this 3-piece series of papers is to introduce the reader to the characteristics of a circular economic system. I will do so by comparing each of the phases of the linear system with those put forward by the proponents of a new circular economy, mainly the Ellen Macarthur Foundation. I will use their definition for the sake of clarity, and also because, even though there are many similar definitions of circular economy, the European Commission often refers to this body as a leading voice in the field, due to its rigorous work and detailed case studies regarding the topic (Kirchherr, Reike, & Hekkert, 2017; European Commission, 2015).
In this first paper I will explain in greater detail the need of a new system and the virtues of a circular one. In the following papers, I will analyze the phases of the linear system, contrasting each with how the circular system should work. The phases detailed are energy generation, production and usage in paper number two, and disposal and closing remarks in paper number three.
We live in a linear system
What is now generally defined as “development” has not come without a cost (Peet & Hartwick, 2009). The industrial model standing at the roots of our current standards of living is based on a linear system of production (Tonelli & Cristoni, 2018). Natural resources are extracted from the Earth, shipped around the globe to be processed in manufacturing plants, shipped again to where consumers around the world can use them as products, and are finally either incinerated or discarded as waste in landfills or in nature.
According to the Ellen MacArthur Foundation, “in terms of volume, some 65 billion tonnes of raw materials entered the economic system in 2010, and this figure is expected to grow to about 82 billion tonnes in 2020” (Ellen MacArthur Foundation, 2013). It then continues: “It is evident that an economy that extracts resources at increasing rates without consideration for the environment in which it operates, without consideration for our natural planetary boundaries, cannot continue indefinitely” (Ellen MacArthur Foundation, 2013). Indeed, it cannot.
We live in a linear system. Developed countries have at least twice the per capita material footprint of developing countries (United Nations, 2018). Development, often measured in terms of GDP, grows in correlation with resource consumption, waste generation and food waste. Current global food production and consumption habits are dictated by the linear economic model, which leads to major inefficiencies in the food economy (Jurgilevich, et al., 2016). For many reasons, as the United Nations says in its 2018 Sustainable Development Goals Report: “Decoupling economic growth from resource use is one of the most critical and complex challenges facing humanity today.”
At the same time, the current system, which relies on cheap, easily accessible materials and energy, is coming up against constraints on their availability, and our capacity to manage the huge amounts of waste it generates (Ellen MacArthur Foundation, 2015). Even worse, the increasing volumes of waste and pollution aggregated by the rising demand from the world’s growing and increasingly affluent population, are likely to impose even greater threats to the continuation of the current material standard of living that developed countries enjoy today (Ellen MacArthur Foundation, 2013).
Over time, awareness of the limits to natural resource use has become more and more embedded in evidence, and all key indicators confirm that the problems of a linear economy are grounded in the global economy (The Platform for Accelerating the Circular Economy, 2019). No wonder, then, that by 2018, 108 countries had national policies and initiatives relevant to sustainable consumption and production (United Nations, 2018).
The necessity for a change in economic patterns has been increasingly acknowledged by governments, businesses and mission-driven organizations. And there is a tacit recognition that only by changing the current way of resource extraction, consumption and disposal, can sufficient supply of natural resources be ensured, existing biodiversity be protected, and sustainable growth for the global population be enabled (Frodermann, 2018).
This is where the Circular Economy comes into play. Highlighting the inconsistency of running a linear model in a closed system, the concept of circularity has been present in many models proposed during the last few decades.
In 1982, Walter Stahel wrote directly about product “circularity” in his book The Product Life Factor, while other authors have addressed the topic from different angles. Janine Benyus, for example, focused her work on how innovation should be inspired by and modeled on nature, an inherently circular system (Benyus, 1998). And Michael Braungart and William McDonough, who wrote the seminal book Cradle to Cradle on how to develop a system where waste does not exist (McDonough & Braungart, 2002).
As the consequences of the linear system become more obvious, the circularity concept has been gaining traction among scholars, practitioners, and governments. This growing trend has been so clear that between 2014 and 2016 alone, the number of academic articles published annually on the topic grew by more than 300% (Kirchherr, Reike, & Hekkert, 2017). Circularity receives attention as it is viewed as a way to implement the much discussed concept of sustainable development. As the concept of sustainability has been too vague or too skewed to be widely implemented (Kirchherr, Reike, & Hekkert, 2017; Breitling, 2019).
So, what is Circular Economy?
Circular economy proposes a fascinating, promising idea. A system that is fed with resources that cycle through it over and over (Lacy & Rutqvist, 2015), eliminating the need for any raw material extraction or waste management processes whatsoever.
A circular economy is a system that is restorative by design. It means maintaining the value of resources for as long as possible, and then reinserting them back at the stage where most value can be conserved. Doing so will reduce the ever-increasing need for extraction of natural resources and space for landfill. Rather than discarding products before their value is fully utilized as it now happens in the linear system, products are designed for ease of reuse, disassembly, recycling, and remanufacturing (Ellen MacArthur Foundation, 2015).
Right now, given that the current linear system often neglects the end-of-life stage, waste that could have been reused or recycled ends up in landfills due to lack of a better processing system or because of the complexity of using those potential resources trapped in a inefficiently designed product or suboptimized collecting system. Waste does not exist when products are designed purposefully to fit within a cycle.
The two cycles
In order to make this vision a reality, we must rethink production, consumption and end-of-life management processes. This begins with the careful selection of the materials that will be used to manufacture the product in the first place. A circular model requires them to be sturdy enough to be reused over and over, or safe enough to be composted back into the natural system (McDonough & Braungart, 2002). Therefore, a basic premise of a circular system, is to differentiate between consumable (also often referred to as biological cycle) and durable components (often referred to as technical cycle) (Lacy & Rutqvist, 2015). This implies a need for separate collection systems for the biological and technical cycles.
Consumables are largely made of biological ingredients that are non-toxic and can be safely returned to the biosphere via composting. This cycle includes food scraps, fruit peels, garden waste, etc., which, under the current linear model, rarely get returned to the environment, bypassing all the benefits of composting while assuming the environmental and economic costs incurred by not doing so. Instead of composting the biological waste and producing compost that could be used in parks and gardens, etc., right now, most of it ends up in landfill emitting methane.
According to the Ellen MacArthur Foundation, the United Kingdom alone could save over a billion US dollars per year on landfill costs by keeping organic food waste out of landfills, which, in turn, would reduce greenhouse gas emissions by 7.4 million tonnes (Ellen MacArthur Foundation, 2013). Several cities are already collecting organic matter and processing it in industrial composting facilities. These facilities convert the organic matter into compost which can be used in parks and gardens (City of Toronto, 2019).
Durables, on the other hand, such as cell phones, bottles and lightbulbs, are made of technical materials like metals, glass and plastics that would be designed to be reused once the product is no longer useful (Ellen MacArthur Foundation, 2013). This is one of the key aspects that differentiates circular economy from today’s concept of recycling.
A circular model aims at keeping products, components, and materials at their highest utility and value at all times, instead of simply incorporating them back into the system as raw materials regardless of their condition. The idea then, is to direct the product-waste towards its highest value. This means, saving as much as possible from each of the materials used in the making of a product.
The inner circle
As it was mentioned, the circular economy aims for durable materials to stay in the system permanently. For this, it encourages the use of robust materials that may be reused before being remanufactured, and remanufactured before being recycled. This principle is often referred to as the “power of the inner circle”, and is based on the assumption that the less a product has to be changed and the faster it can return to market, the higher the potential savings on material, labor, energy, and all the associated negative externalities linked to its production (Ellen MacArthur Foundation, 2013). As an example of this, think of the end-of-life process of a glass bottle. How much energy would be saved by washing and refilling a glass bottle instead of melting it at 1500 degrees Celsius just to make another identical glass bottle? The same logic applies everywhere.
Let’s picture a cellphone. Each phone is produced by investing energy and labor into gold, silver, rare earth metals and other precious resources to create a highly complex product. Given today’s low collection and low recycling rates, however, nearly all of these materials and labor are lost once the cellphone is no longer in use (Ellen MacArthur Foundation, 2013).
In a truly circular system that returns each phone to the manufacturing company with the aim of maintaining most of the product’s value, and therefore ensuring the greatest economic and environmental savings, the “afterlife” of a used cellphone would be as follows: First, cleaning it, reprograming it and then reselling it for someone else to use. If that is not possible because some components are damaged, then changing those components and reselling it as a remanufactured product. Some tech companies are already doing this on a very small scale (Apple Inc., 2019). If the phone is overall too damaged, then disassembling it so that the materials can be properly recycled into another product’s manufacture. By undergoing this process, the maximum possible material and environmental savings occur.
In the current linear system, in order to produce each phone, materials are extracted from the earth and sent to the manufacturing company, and at the end of the product’s life, they are simply buried in landfill (Lacy & Rutqvist, 2015; Ellen MacArthur Foundation, 2013), after spending years in a house drawer because most people doesn’t know what to do with them!
Think of the environmental and economic gains of the circular process in contrast to the linear one. Furthermore, imagine that all the cellphones’ parts were designed for them to be replaced and interchanged when there’s a new and better version. This line of thinking was the motivation for EU´s ruling that states all new smartphones and tablets sold within its borders must have a common charging port by the fall of 2024, for example.
Transition
Implementing a circular system, of course, requires us to rethink the whole economic system. Making use of legal frameworks that permit, incentivize, and ease the transition from the current linear system to a circular one (Ellen MacArthur Foundation, 2015). Transitioning to a circular system will require policies that create an encouraging environment for such change, and a profound and comprehensive transformation of business practices along value chains (Lacy & Rutqvist, 2015). Effective policy making requires the best available data, which is often lacking. The challenge we face is enormous.
Looking to catalyse this transition in Europe, for example, in December 2015, the European Commission adopted an action plan to move towards a circular economy. The plan aims to encourage economic growth, responsible consumption and sustainable production patterns in line with European Union commitments under the ‘2030 Agenda for Sustainable Development’ (European Commission, 2015). The Commission sees the transition towards a circular economy as an opportunity to reduce its ecological footprint by lowering raw material consumption and minimizing waste generation. Which, no doubt, is a major prerequisite to moving towards a more sustainable system, just like the EU’s cellphones common charging ports regulation just mentioned.
Criticisms
Circularity, however, is not seen with the same hopeful eyes by all. Its critics claim that, just like previous sustainability concepts, circular economy is not really addressing the root causes of the current system’s failures (Jackson 2009; Zink, 2017). In line with this claim, Kirchherr et al. (2017) ran a comprehensive study and analysed 114 different definitions of circular economy. Their conclusion was:
CE’s link to sustainable development is weak. We further revealed that most authors see CE as an avenue for economic prosperity, whereas previous scholars conducting narrative reviews of the CE literature had argued that CE would be mostly concerned with environmental aims. Unsurprisingly, the focus on economic prosperity is particularly prominent among practitioner definitions. (Kirchherr, Reike, & Hekkert, 2017).
According to their findings, a circular economy does not aim at changing the profit-maximization paradigm of businesses. Rather, it suggests an alternative way of thinking concerning how to develop new business models that are more sustainable and more self-protected from the price volatility of natural resources.
With this in mind, is a circular economy any better than the current linear model? Theoretically, it is – without doubt. The question to be answered, however, is if it is sufficient to grant us time before a more catastrophic system collapse. The answer to this question will depend on the policy makers who bear the responsibility for implementing effective and sufficient rules to make it so. It is debatable if a circular economy can indeed absolutely decouple resource extraction and waste generation from economic growth (Jackson, 2009), we are yet to see an example of this, but, when appropriately established, a circular system will drastically improve the current situation.
In the following papers, I will analyze each of the phases of the linear system, contrasting each with how the Ellen Macarthur Foundation claims the circular system should work. In paper number two, I will comment on energy, production, and usage; and in paper number three disposal and closing remarks.
To read Part II visit https://ideasforpeace.org/content/circulareconomypart2/
To read Part 3 visit https://ideasforpeace.org/content/circulareconomypart3/
List of References
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Breitling, J. (2019). Sustainable Development. UPEACE.
City of Toronto. (2019, 07 28). What Happens to Organics? Retrieved from City of Toronto: https://www.toronto.ca/services-payments/recycling-organics- garbage/houses/what-happens-to-organics/
Ellen MacArthur Foundation. (2013). TOWARDS THE CIRCULAR ECONOMY Economic and business rationale for an accelerated transition. Isle of Wight: Ellen MacArthur Foundation.
Ellen MacArthur Foundation. (2015). Towards a Circular Economy Business Rationale. Isle of Wight.
European Commission. (2015). Closing the loop – An EU action plan for the circular economy. Brussels.
Frodermann, L. (2018). Exploratory Study on Circular Economy Approaches. Springer Fachmedien Wiesbaden.
Jackson, Tim (2009) Prosperity Without Growth, Economics for a Finite Planet. London: Earthscan
Jurgilevich, A., Birge, T., Kentala-Lehtonen, J., Korhonen-Kurki, K., Pietikäinen, J., Saikku, L., & Schösler, H. (2016). Transition towards Circular Economy in the Food System. Sustainability.
Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An analysis of 114 definitions. Resources, Conservation and Recycling, Volume 127: 221-232 .
Lacy, P., & Rutqvist, J. (2015). Waste to Wealth – The Circular Economy Advantage. UK: Palgrave Macmillan.
McDonough, W., & Braungart, M. (2002). Cradle to cradle: remaking the way we make things. New York: North Point Press.
Peet, R., & Hartwick, E. R. (2009). Theories of development: Contentions, arguments, alternatives. New York: Guilford Press.
Retrieved from Refurbished Mac: Apple Inc. (2019, 07 20). Apple. https://www.apple.com/shop/refurbished/mac
The Platform for Accelerating the Circular Economy. (2019). The Circularity Gap Report – 2019. Geneva: World Economic Forum.
Tonelli, M., & Cristoni, N. (2018). Strategic Management and the Circular Economy. United Kingdom: Routledge.
United Nations. (2018). The Sustainable Development Goals Report. New York.
United Nations. (2019, June 3). Department of Economic and Social Affairs. Retrieved from SDG 12 in numbers: https://www.un.org/development/desa/undesavoice/more- from-undesa/2019/06/45212.html
Author’s Short Bio
Professor Alonso Muñoz (Costa Rica) is Instructor in the Department of Environment and Development at the University for Peace (UPEACE), where he coordinates the Master of Arts (M.A.) degree in Responsible Management and Sustainable Economic Development (RMSED) and the Master of Arts (M.A.) degree in Development Studies and Diplomacy (DSD). He holds a B.Sc. in Electrical Engineering from the University of Costa Rica and an M.Sc. in Business Administration. He has worked in the private sector, and has volunteered on various national and international projects regarding peace education, migration, environmental impact of systems and Social Enterprises. His most recent work revolves around the transition towards a more Circular Economy, a field that he feels passionate about, and for which he has high expectations. You can contact Professor Muñoz at amunoz@upeace.org
