The Next Economy
Circular Solutions Still Promising, But Researchers Say Framework Lacks ‘Substance’

Circularity is an aspirational and increasingly practical concept that has continued to gain popularity in sustainable business circles for the past few years. Studies have projected that scaling of circular models holds trillions in potential value for our global economy, in addition to innumerable social and environmental benefits — and more and more companies and countries are making headway into transforming the way we make and use products and food to significantly reduce the negative impacts of human life and industry on the planet.

Despite this, business as usual — our extractive, wasteful, degrading and polluting linear economy — remains the norm, and the side effects continue to cause damage. More than 90 percent of biodiversity loss is due to the extraction and processing of natural resources.

A recent Ellen MacArthur Foundation report, The Nature Imperative, says among its other benefits, a circular economy can play an important role in reversing biodiversity loss.

The study deep dives into the role of 4 sectors — Food, the Built Environment, Plastics and Fashion — and shares compelling ways for business and policymakers to accelerate the shift towards a circular economy and a nature-positive system.

The EMF study points to a growing number of circular solutions already being used to help the public and private sector meet biodiversity and climate ambitions. But a team of researchers from Lancaster University Management School, Lund University and the Royal Institute of Technology (RIT) in Sweden warns the definition of a circular economy is unclear and lacks substance.

Their new study, published in the Journal of Industrial Ecology, says a circular economy risks becoming counterproductive unless we stop looking to it as a panacea for all kinds of environmental problems.

While circular models and ambitions are being embraced by businesses, regions, cities and NGOs worldwide — from China and Latin America to the EU and the US — criticism of the model from both practitioners and researchers has received less attention.

Among their criticisms, the academics from Lancaster, Lund and the RIT say:

• The concept of a circular economy is so diffuse and sprawling that it is not possible to measure its impact. It includes everything from recycling systems, renting, and replacing products with services to developing apps for the sharing economy, etc.

• Advocates of a circular economy tend to ignore the vast amount of materials and products that people have already accumulated. The concept is reduced to a question of choosing between linear and circular products, and disregards physical laws about the physical limitations of materials and the complexity of the waste; even though these issues are crucial if a circular economy is to become a reality.

• Some businesses only develop circular activities for parts of their operations. This may be due to the difficulty of scaling up pilot projects; often it is only a small part of the operation that is characterized by a circular economy, while the core activities continue as usual.

• Contrary to what the advocates say, we know little about how a circular economy will affect the utilization of resources and growth. This makes it difficult to measure the environmental impacts, especially in the long term and over larger geographical scales. Some claim that a circular economy only delays, rather than eliminates, the negative environmental impact of the linear economy.

• Although advocates of a circular economy claim it contributes to a socially sustainable future for all, the concept tends to be reduced to a debate about resource consumption. There is no connection to how the concept would lead to greater social equality.

• Some critics argue that the circular economy depoliticizes industrial and environmental policies while advancing the power of the market and businesses. It is an enticing concept that promises that everyone will benefit from its implementation. It enables discussions about synergies, win-win and possibilities rather than about compromises, problems and limitations.

But Hervé Corvellec, principal author of the study, is quick to point out:

“Criticism of the circular economy does not challenge the concept of circularity. Rather, it is a case of how the supposed benefits are based on inconsistencies, an incomplete picture, hidden assumptions, agendas and unclear consequences. These are the questions we have to ask ourselves: How do we know that a circular solution is good for the environment? Who benefits from it and who does not? Will it phase out the linear economy? Clarity is required regarding precisely what type of circularity it applies and what the conflicting objectives are.”

Within the paper, the team of researchers propose a more modest circular economy, which is not presented as a panacea but as a real solution to concrete problems.

Co-author Dr Alison Stowell, from Lancaster University Management School, said: “We recognise that the circular economy agenda has made significant impact; and this study aims to highlight the areas in need of research, policy and managerial attention to drive further progress.

“We hope it will assist in the development of a more modest pathway to circularity that is concrete, transparent and inclusive.”