Circular? Or economy ? (the last one…)

For a while I am trying to understand what the initiatives for a Circular Economy imply. And when I look at the two words , they are in contradiction, from whatever angle I observe this.

First of all what is meant by economy in this verb? If money, as in “ financial economy” , its not much helpful. The prime target of that is earning money, or even more: making profit. And making profit in terms of money has nothing to do with environmental performance. The current financial economy is based on exploiting resources, and creating scarcity and debt, which makes prices an interest income go up . It profits from the fact that many resources are not valued in their raw form. Besides, the current functioning of the financial economy has proven to develop in the wrong direction, its responsible for our current problems. And you cant improve a system using the same way of thinking that caused the problems ( Einstein). I would like to put it more bluntly: If you can make a profit, it cant be sustainable. Or in even other words: if a sustainable solution is too expensive, its not the solution which is wrong, but the financial valuing system. Without changing economy, no environmental progress is possible.

But lets give this the benefit of the doubt,, and assume economy is about economical management of resources, which would make sense , and forget about financial economy and focus on ‘ circular’ .

Or : how circular is interpreted. To analyze this I use the internationally  much cited document from the macArthur foundation: towards the Circular economy 2013.

In the summary of the main report the macArthur foundation states: “any system based on consumption rather than on the restorative use of non-renewable resources entails significant losses of value and negative effects all along the material chain. “

Its sounds ok, but in fact in one of the first sentences the reader is put on the wrong leg: based on consumption rather then on restorative use of non renewables…? It suggests and misleads the reader assuming you can consume anything, its just how we treat resources is wrong. Now thats wrong in my view, the problems starts with unlimited resource consumption. At best you could say its both: reduce consumption and treat resources well.

A circular economy is an industrial system that is restorative or regenerative by intention and design”

Huh? Why should it be an industrial system? There are many solutions that do not require a “ industrial” system. There are many local organizational solutions, like sharing stuff. This way these are sidetracked, and its only about production. But closing cycles should start from providing functions in the best possible way. And if no product or less products are needed, its just that , Whatever efficient that product is made is secondary . This is kept out of view in many so called sustainable strategies , not only in circular economy: they all try to maintain what we do, only somewhat more “ efficient” . Same with the shift for renewable energy. We still want all the energy, only now renewable. But this is skyrocketing materials use . [1]

Further reading does not reveal any word about less materials, only about replacement and more effective use , again by shifting for renewable (energy) and “ restorative” use of resources . Restorative literally means to restore the original stock or quality in the system. but here its used not to restore the stock but to re-use once depleted stock better .

Im am not trying to look for all of the smallest “ errors” to comment on. Circular economy sounds great, and undoubtedly the intentions of many are good, but there are inherent flaws in the approach, which can lead to the wrong interpretations and solutions.

As for instance the announcement of a “ circular carpet” , by DSM, and the CEO gets the “ Fortune Award for Circular Economy Leadership “ at the world economic forum in Davos : what the heck is circular here? Its just a carpet made from 1 material, and easy to recycle. Nothing more. Its not that we can cover the whole planet with carpet now…

In fact its a lot about recycling and re-use, and introducing renewable energy. Nothing wrong about that , but still far away from closing cycles. Closing cycles involves in general 4 issues to address, that are directly related to any “ flow” : Besides the kind of resource used , and the volume involved, its also has to include two other key aspects: speed of use and energy to drive the cycle.

With regard to speed, the best solution is not that its recycled and “ returns in use” as the report writes, but that the original product remains in use. For as long as possible or functional: This is illustrated by the brilliant example given by Kenis and Lievens 2012 [2] about replacing a car for a more thrifty one ( economical….): even if the new car is twice as efficient with petrol, the energy spent in producing the new car will never be paid back: only after 14 years or so. And cars are normally dumped between 7-10 years. ( and we did not even included the material depletion, and eventual energy to recycle the old one .) Its better to maintain and continue driving the old car… ( and see also my blogs on recycling …..)

A similar example is what I use for students to show that improving existing technology is not the solution: You can make a laundry machine A+ or A+++. But you still need laundry machines. The better option is laundry shops, with a good pick up and delivery service in small urban districts. Its more social and creates employment as well. Thats what helps create a circular functioning society !

The report and many other circular economy proponents come with arguments about reduced labor and costs. I would say those plea against a circular economy: Labor is a very sustainable way of energy supply, ( people live and eat anyhow) and reducing costs does not lead anywhere: it creates a rebound effect. The money will be spent anyhow, and increase environmental pressure.

But the deeper I dig, my hope it was about resource economy in stead of financial economy turns out to be wishful thinking. Its about “business that “feels the risks”:higher prices and supply disruptions” writes the macArthur report. So what? Circular economy is not about saving business, is it? Higher prices and supply disruptions could in fact correct the market and phase out disrupting resource use. Even within the current (financial) economical framework, it could partially help reduce our impacts! But thats what seems to be avoided…

The report estimates that “ the circular economy represents a net material cost saving opportunity of USD 340 to 380 billion p.a. at EU level for a ‘transition scenario’ and USD 520 to 630 billion p.a. for an ‘advanced scenario’: Again: the rebound threat…

Anyway, I could go on like this. At best the Circular economy trend focuses on parts of circular resource management, and for the main part its just what it says: a circular return on investments,

It would make much more sense to launch a initiative like “ circular society” : products cannot be sustainable, by definition, only the use can. By communities and societies. And that requires a change of economy, in both senses of the (use of) the word.


[1] Materials and energy : a story of linkages René Kleijn, 2012,

[2] The Green economy myth ( only in Dutch), De mythe van de groene economie, Anneleen Kenis en Matthias Lievens 2012


Author: ronald rovers