It could be argued that our civilisation was mostly a circular economy until quite recently. All that changed when civilisation became more and more industrialised. But at least the stuff we bought were used until they could no longer be used. In some places, the items were repurposed and only when nothing could be done were they disposed of. Presently, the convenience of supermarket goods, fast fashion, cheaper technology and whatever the latest shopping trend I’m missing out on TikTok, these all share the same model of take-make-dispose. And more often than not, the disposal is done 1. after a short use period and 2. in a not-so-pretty way.
Beforehand, everyday items were made to last and were usually of higher quality. That meant people paid more for them, but they also lasted long and had a repair and maintenance system in place. Think cars made in the 80-90’s*, older clothes, kitchen items etc. Now you have electronics, cars and clothes which have a shorter lifespan and the waste, more often than not, gets sent to some “Global South” country to be disposed of. Here they get taken apart to harness whatever material they can, sometimes in dangerous ways.
These days, we’re talking about circularity of products the circular economy. It’s all the rage in the sustainability sphere and there’s a lot of investment in such initiatives. Here in the EU, we have the Circular Economy Action Plan as part of the 2050 Climate Neutrality goals. Amsterdam even wants to be “fully circular” by 2050 while having its focus on the value chains: food and organic waste streams; consumer goods and the built environment. So where did this circular economy idea originate from? Is there a connection to circularity and economics? How “circular” can we get and is “fully circular” even achievable? Well I did some digging to answer these questions.
Regarding economics, I stumbled upon the article “The Economics of Natural Resources”. In 1988, this study by Kneese pointed out some key flaws of the linear economy. I’ve narrowed down 3 of them. 1. that the factors of production are labour and capital. Natural resources were not considered as a factor because 2. It assumes that these resources can be infinitely substituted by capital or labour. This is because, in a free market, scarcity sends price signals which results in substitution on the production side or a change in demand from the consumption side. 3. It assumes that higher the capital investment, the higher the productivity. However, this disregards the fact that there are physical limits - resource limits, mass and energy limits to substitution. A constant and sustained production cannot be possible unless the material is recovered with 100% efficiency.
The last point serves as a vital linkage made in this study. The link of economics to thermodynamics. This link was heavily advocated by Nicholas Georgescu-Roegen. Like the First Law of thermodynamics, mass and energy flows must be balanced in an economy. Like the Second Law of thermodynamics, resources and energy will end up as a low-grade byproduct. This is because 100% of the material cannot be recovered without expending sufficient energy and resources. This Second Law also explains why a fully circular economy cannot be realised since it is simply not worth investing the energy in recovering certain low-grade waste. Think about trying to recover all the tiny bits of gold, plastic and copper in your mobile phones. There’s bound to be some losses.
But how can we get the most out of the circular economy? How can we ensure that we move in the right direction? It’s one thing to take what is wasted today and turn it into tomorrow’s resources. But this is nothing but a band aid solution. Waste will continue to grow. This further necessitates the linear economy of today to fuel this sort of stop-gap circularity. If we need change, it has to start from the top. That’s where design comes into play. By producers leading from the front and designing their products to be longer lasting, material efficient, reparable or easy to recover materials from. Or all of the above of course! That means stuff like longer lasting car components, phone batteries which you can easily take off and remove and putting the phone charger back in the box! We are sort of trying to go in reverse gear in a way. Back to “how they used to make stuff”.
After Kneese’s work came “Economics of Natural Resources and the Environment” by Pearce and Turner. Here they outlined a framework for a closed economic system. 1. There should be balanced use of renewable resources. In other words, they should not be overly exploited like razing rainforests to grown palm trees or for pastures. They need to be replenished, either by human means (like afforestation or mangrove replenishment) or by natural means. 2. There has to be careful harvesting of exhaustible or non-renewable resources. 3. Controlled waste disposal of material we cannot extract back into the system in a way that nature’s natural assimilative capacity isn’t hindered. A visual representation of this system can be seen below.
The initials are as follows:
R - Resources
P - Production
C - Consumer goods
U - Utility
ER- Exhaustible resources
RR - Renewable resources
W - Waste
A - Assimilative Capacity of environment
r - recycling
h - harvest rate
y - yield of resource
So, it seems like we’ve had a pretty darn good framework of circularity all this time. I’m surprised I didn’t come across a lot of modern academic articles talking about this.
In 2002, Braungart and McDonough wrote “Cradle to Cradle: Remaking the Way We Make Things” which put forward the idea of design for circularity. This book had a design framework which was based on 3 principles of nature. Waste as a resource, clean energy and diversity in design.
In 2010, the Ellen MacArthur Foundation got off the ground and has since then been a driving force in the circular economy. To me, this was the first instance where I came across the term “circular economy”. And this was pretty recent. But I feel like it was this organisation that lit the fire which carried onto what is the circular economy agenda right now. Maybe I’m wrong? Maybe I’m missing some key developments in circular economy between 2010 and now? Oh, I missed Kate Raworth did I? I think that calls for an entire blog post about that.
Do you know more about the developments of the circular economy in the recent years? Feel free to leave a comment. Share something new with the community. After all, I can’t be the only one who questioned where this term originated from am I right?
*Check out this video from the YouTube channel “driving 4 answers” about planned obsolescence in cars. https://youtu.be/SeMZGICNSMg
Sources:
The Economics of Natural Resources Author(s): Allen V. Kneese Source: Population and Development Review, Vol. 14, Supplement: Population and Resources in Western Intellectual Traditions (1988), pp. 281-309 Published by: Population
Economics of Natural Resources and the Environment - David W. Pearce, R. Kerry Turner - Google Books
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