Introduction: examining the concept of the circular economy

Background

The rise in the global population to 10 billion people, coupled with the need for resources to satisfy this growth, is resulting in an unsustainable increase in the extraction and processing of raw materials. It is predicted that the largest rise in extraction and processing will be in minerals, especially in developing countries (OECD, 2018). The impacts of this escalation are expected to be higher pollution rates, a ‘significant’ contribution to climate change, and two to three planets’ worth of natural resources by 2030 and 2050. With nations in the Global South expected to account for more than 90% of the world’s people (Goyal et al., 2018), these impacts will jeopardise the gains made in global health and well-being. Reserves of available natural resources are expected to decrease, while the costs of sourcing and extracting virgin materials will significantly rise. Globally, material use will double from 79 Gt in 2011 to 167 Gt in 2060. While there is evidence of some decoupling of economic growth and material use, with a material intensity of 1.3%, reducing the extraction of raw materials and increasing the recovery of value from existing resources is therefore, becoming exponentially important.

Evidently, our current rate of resource consumption means that we face significant challenges with regard to sustainability, as well as with our environment, health, and economies. These concerns are particularly acute for developing economies, which often lack the resources and governance mechanisms to enable them to cope with and withstand any systemic shocks. The concept of a circular economy (CE) offers the potential to mitigate these risks by facilitating the cyclic use of resources and increasing value creation.

It is within this context of the need for change, particularly to benefit countries in the Global South, that this Handbook has been written. It provides both theoretical perspectives as well as practical examples and case studies of how the CE principles could be, and indeed, have already been employed to effect real change in policies and practice. These perspectives and case studies cover a range of disciplines, sectors, and geographies from the Global South and the Global North.

The Handbook utilises a critical lens in examining the issues and suggested ways forward. It employs a multi/interdisciplinary approach to establish a rich, holistic context that will be of value to academics but also to policy- and decision-makers and industry.

The circular economy

It is generally held that the general concept of a CE resulted from the work of Boulding (1966: 5), who proposed that the Earth was a closed system with “limited assimilative capacity and as such the economy and environment must coexist in equilibrium” (i.e., a Space Ship Earth) (Ghisellini et al., 2016; Andersen, 2007; Lieder and Rashid, 2016). However, some contend that actually, due to the limitations in resources, countries in the Global South have practiced the concept long before those in the Global North (e.g., Schroder et al., 2019). These differences in the rationales for and approaches to implementation of the concept are explored throughout the Handbook.

According to Millar et al. (2019), Boulding's work influenced that of others from a range of schools of thought (e.g., environmental economics [Pearce and Turner. 1990], industrial ecosystems Jelinski et al., 1992], cleaner production [Stevenson and Evans, 2004], product-service systems [Tukker, 2015], biomimicry [Benyus, 1997]. the performance economy [Stahel, 2010], eco-efficiency [Haas et al., 2015], cradle-to-cradle design [Braungart et al., 2007], regenerative design [Lyle, 1996], and industrial ecology [Graedel and Allenby, 2003]) around the concept of a closed-loop economy. For example, Walter Stahel in the late 1970s came to the view that a linear economic model was not sustainable, as consumption would lead to resource limitations in the future. Stahel proposed the need to close material cycles and reform the economy. In 1972, the Club of Rome published their ground-breaking report, Limits to Growth (Meadows et al., 1972), which came to a similar conclusion that the existing economic model was leading to increased demands for resources and by extension generating high levels of waste.

A CE approach is an umbrella concept. It aims to promote the responsible and cyclical use of resources, to reduce material input and waste generation, and to decouple economic growth from natural resource use (Blomsma and Brennan, 2017; Homrich et al., 2018; EASAC, 2016; EEA. 2016; Pauliuk, 2018). It requires an optimised closing of the 'loop' and a reduction in the need for the extraction of virgin raw materials by minimising waste, extending product life, maintaining materials at their highest level, optimising reuse, and utilising energy sources such as biomass (Webster, 2015; Stahel, 2016). For example, the EUs Circular Economy Action Plan (EC, 2015) notes that a CE occurs when “the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimized" in such a way so as to “develop a sustainable, low carbon, resource efficient and competitive economy." It is associated with other concepts, such as industrial symbiosis (Chertow and Ehrenfeld, 2012) and eco-cities, a concept that has grown rapidly in countries such as Japan and Singapore (Dong et al., 2016).

Products and materials keep circulating in a high-value state of use, through supply chains, for as long as possible (ZWS, 2019). These processes require all stakeholders (e.g., designers, businesses, communities, governments, and individuals) to be involved (Bocken et al., 2016; Jiang and Zheng, 2014; Kirchherr and Piscicelli, 2019). For example, some 80% of environmental impacts are made at the design stage (EMF, 2019). However, if we can ‘get it right,’ then the benefits are significant. For example, it is thought that a CE will be worth US$4.5 trillion by 2030, create 500,000 jobs in France alone, and reduce 37% of the energy consumption in the EU (WBCSD, 2016).

In 2008, China became one of the first countries to enact specific legislation for a CE (CIRAIG, 2015). Germany and Japan have also been recognised as pioneering countries in the development of policies (Geng et al., 2013).

The concept has been introduced for differing reasons in different countries. For example, in the early 1990s, the concept was embedded into German environmental policy to address issues associated with raw material and natural resource use for sustained economic growth (Geng and Doberstein, 2008). In China, in the late 1990s, an eco-industrial park model was promoted, and in the mid-2000s, the application of the concept was introduced in line with Hu Jintao’s concept of a ‘harmonious society,’ with a focus on post-consumption waste recycling (Sakai et al., 2011). In China, the CE has been used for some time as a mechanism for profitable product development, new technology development, upgrading equipment, and improving industry management (Yuan and Moriguichi, 2006; Jiang and Zheng, 2014). In the United States and Europe, application of the CE concept is primarily to enhance waste reduction, reuse, and recycling and to conduct product-level life-cycle studies (CEC, 1975; EC, 2011; Unilever, 2015; EC, 2018; Lee, 2018). In many countries in the Global South, it serves as a fundamental way of life, especially among the informal sector, supporting livelihoods, job creation, and community development (Schroder et al., 2019; Wellesley et al., 2019).

Situating circular economy principles in the field of waste and resource management

The CE concept involves four technical cycles, namely (EMF, 2013):

• • Maintaining product
• • Re-using/redistributing (used) product
• • Upgrading/remanufacturing product
• • Recycling product

In the smallest cycle, the product/material retains the highest value, as it can be applied longer in accordance with its original purpose. In the longest cycle, the value or residual value of the product is lowest, and a different application must be found.

The concept creates value in four different ways (Accenture, 2014):

• • Renewable sources continuously regenerated in the course of time
• • Quick markets allowing for optimal use and access of products and possessions
• • Increased product lifespan by designing products that are made to last
• • Linked value chains that do not produce waste

The theory behind the CE is applied in various related movements, such as in the cradle-to-cradle philosophy, biomimicry, green economy, and blue economy. These movements also focus on smarter and more effective use of commodities.

The waste hierarchy forms a critical component in the CE concept (Pires and Martinho, 2019). It originated in Holland in the late 1970s but was made popular in the United States (Overcash, 2002; Parto et al., 2007; van Ewijk and Stegemann, 2016). The principles of the hierarchy were adopted in the EU Waste Framework Directive 2008/98/EC (European Council. 2008). In 2015, the EU Circular Economy Strategy (COM/2015/0614) (European Council, 2015) emphasised the importance of the waste hierarchy in protecting the environment and recovery of value. In 2016, it was included in Sustainable Development Goal (SDG) 12, with the aim by 2030 to “substantially reduce waste generation through prevention, reduction, recycling and reuse.”

Challenges associated with the concept of a circular economy

At a fundamental level, the complexity of the CE concept, coupled with the fact that it is meant to ‘manage’ resources, makes it difficult to implement (Geng et al., 2009; Winans et al.,

2017; Kirchherr et al., 2018). Unlike that for sustainable development, no universal definition of the concept of a CE exists in the literature (Millar et al., 2019). One of the challenges faced, therefore, is how can progress towards a CE best be measured if there is no common definition? Indeed, what factors should be measured, and how (Moraga et al., 2019)?

Millar et al. (2019) also contend that there are several contradictions and knowledge gaps with the concept. For example, continual economic development is invariably linked to environmental degradation. In addition, closed material loops are practically and theoretically impossible. Korhonen et al. (2018) note that much of the research on CE is focused around metrics, tools, and computations, with limited attention paid to factors such as values, societal structures, cultures, worldviews, and the paradigmatic potential of the concept. Thus, the authors contend that any evaluation of the concept should take account of all levels (i.e., from ‘global’to individual).