What is the Circular Economy?[i]

This was one of the key questions to be answered during the first edition of the Circular Economy Forum of the Americas (CEFA) held in November 2017 in Medellin, Colombia. As co-organizer and participant in the discussions, I returned home with concerns whether we were able to reach a common understanding of what the Circular Economy (CE) is, and how this new paradigm can be implemented to improve our wellbeing in the Americas. This restlessness inspired me to write this article, so I could contribute to the ongoing regional and international dialogue and discussions on defining clearly what CE is and how it has come to be.

Circular Economy has been acknowledged globally as the most promising approach to solve contemporary sustainability issues by decoupling global economic growth from the extraction of natural resources and negative impacts on the environment. A CE proposes to keep products and materials at their highest utility and value in time and to reincorporate them continuously into supply chains eliminating negative externalities such as resources extraction, pollution, soil degradation and climate change among others (Ghisellini et al. 2016). However, as Preston (2012) pointed out, a CE transition at a large scale has been limited by a lack of a unified vision about the concept among governments and industries. Moreover, the work of Kirchherr et al. (2017) has also noted the divergence of the CE understanding among academics and practitioners in time. They found 114 different definitions of CE and highlight the importance of having a common understanding of CE to make its implementation more pragmatic.

To start understanding what CE is, it is important to be aware that different schools of thought have enriched its current holistic and integrated set of principles. The fundamentals of a Circular Economy are tracked to early 1862 with the concept “waste equals food” (Skene & Murray, 2015). Since then, the circular economy concept has been developed through different sustainability schools of thought such as industrial ecology, regenerative design, biomimicry, natural capitalism, cradle to cradle®, blue economy, and performance economy, conducing to the current CE framework popularized nowadays by the Ellen MacArthur Foundation (EMF) and other key international knowledge partners. A brief description of each school of thought is given below:

Industrial Ecology (Frosch & Gallopoulos 1989)

Industrial Ecology has largely contributed with decades of research taking inspiration on biological ecosystems to achieve more efficient industrial systems focusing on materials and energy flows. Industrial ecology adopts a system thinking approach, which means considering the global impact of local interventions. Some of the contributions to circular economy include concepts such as closed-loop processes, eco-industrial parks where companies are co-located so the waste of one process is an input for another, waste elimination and systems thinking.

Regenerative Design (Lyle 1994)

Regenerative design takes the agricultural notion of regeneration and extends it to industrial systems. This school of thought establishes that these systems could be orchestrated in a regenerative manner with a focus on community support systems. The regenerative nature of a CE is inspired by this school of thought.

Biomimicry (Benyus, 1998)

Biomimicry for Benyus (1998) is “a discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems”. Biomimicry considers nature as an infinite source of inspiration to create safe products and technologies for a Circular Economy and, proposes identifying the key principles of chemistry that underlie a function in nature to understand deep patterns of their processes and to create new inventions in chemistry for a CE.

Natural Capitalism (Hawken & Lovins, 1999)

Natural capitalism enacts that sustainability is a good business by reducing the use of natural resources (efficiency), redesigning products and processes to close the loop, regenerating human and natural capital and reinvesting through replenishing stocks of natural capital.

Cradle to Cradle® (McDonough & Braungart, 2002)

This school of thought has largely influenced the current vision of a Circular Economy. The notion of biological and technical nutrients in the CE are taken from the Cradle to Cradle® approach as well as key guiding principles that rely on “rethinking the way we make things”. Cradle to cradle principles require careful attention to product design as well as material health, material reutilization after use, clean energy, water stewardship, social fairness and supply chain management.

Lewis Perkins, President of the Cradle to Cradle Product Innovation Institute, presented a vision for a Circular Economy during CEFA2017 is “A prosperous economy where safe materials are intelligently cycled and manufactured in ways that positively impact people and planet.” He also highlighted that Cradle to Cradle design is more than design for circularity, it is also regenerative design which uses safe materials that can be biologically or technically cycled, eliminates waste and extends product and material use.

Blue Economy (Gunter Pauli, 2010)

Blue Economy is a notion championed by Gunter Pauli, Founder of the ZERI Foundation. According to his manifesto: ‘using the resources available in cascading systems, (…) the waste of one product becomes the input to create a new cash flow’.

Some of the guiding principles presented by Mr. Carlos Bernal, Director of the ZERI Foundation for Latin America during CEFA2017, included:

Learn from nature, this promotes efficiency in industrial processes.
Take advantage of physics and gravity
Everything is interconnected (systems thinking)
Substitute something with nothing (dematerialization)
Work with available resources
Generate multiple benefits
Health is a priority.

Performance Economy (Stahel, 2010)

Stahel suggests that the goods of today could become the “resources of tomorrow … at the prices of yesterday”. He argues that smaller loops preserve more value through the inertia principle: “don’t repair what is not broken; don’t remanufacture what can be repaired; don’t recycle what can be remanufactured”. This will require a shift to services – because then the manufacturer has an incentive to increase the useful life of the product and to secure the ownership of resources when the user no longer requires the product.

Stahel also proposes sustainable taxation - a shift from taxing labor (he calls this a ‘renewable resource’) to non-renewable resources. This would enable jobs generation within a circular economy and avoid resources depletion.

The Ellen MacArthur Foundation vision

The Ellen MacArthur Foundation (EMF) has championed the term Circular Economy since 2011 which has gained traction in the last few years around the world. The EMF explicitly acknowledges the different schools of thought in the Circular Economy principles:

Design out waste: Waste does not exist within a CE. This incentivizes to design products that fit biological or technical cycles to be recirculated infinitely within the economy. Materials are non-toxic and safe.
Build resilience through diversity: Features such as modularity, versatility, and adaptivity are key to face current challenges where uncertainty is predominant.
Renewable energy: “Systems should ultimately aim to run on renewable sources”
Think in ‘systems’: through the ability to understand how parts influence one another within a whole, and the relationship of the whole to the parts, we should think on the global impact of local interventions.
Waste is food: all the materials are cycled in technical or biological cycles.

Is it possible to reach a consensus and take concrete actions towards Sustainable Circularity in the Americas?

As the term CE is still being introduced in the Americas without concentrating on the fundamental guiding principles, it is subject to different interpretations. This leads to a situation where newcomers and even seasoned experts, may fall into many of the usual traps and do not demonstrate a good grasp on what CE is, stands for, and what solutions or quality programs might be useful to promote and share among colleagues throughout the region. Tailoring CE to the region’s realities, needs, and opportunities to ultimately improve the wellbeing of the people of the Americas will increasingly become more complicated or incoherent, if there is no adherence to the guiding principles of CE.

Therefore, I believe it is time to recognize that the guiding principles of Circular Economy have already been developed at a deep level, as demonstrated in this briefing, and that people inspired to engage and to help promote and apply CE, should reach a consensus on how the Circular Economy should be understood in the Americas and adhere to these principles. This will serve as the baseline to implement pragmatic solutions to environmental, economic and social challenges that continue to take hold in our continent.

The Circular Economy Forum of the Americas CEFA2017 was a first step to start gaining this understanding and some interesting reflections arose where social challenges such as inequality and informality present in the region should be addresses in any CE strategy: “Circular Economy is a comprehensive approach which proposes a set of guiding principles to sustainably and beneficially manage resources within the biosphere, the techno-sphere, and the human sphere. Human beings have a central role to play to achieve positive changes of sustainable development” (CEFA,2017)

CEFA2017 set the precedents to begin a dialogue throughout the continent and will continue to be developed annually as the means that will facilitate this understanding with the ultimate goal of proposing concrete actions that involve all the stakeholders. I think that gatherings like CEFA and other events that have emerged in the last two years in the region are fundamental to continue boosting dialogues around CE and expanding a correct understanding of its principles. It is recommended that these meetings promote concrete work agendas for governments, companies and civil society.

The guiding principles of Circular Economy have already been developed at a deep level, now the challenge is to understand them and place them into practice in the local context to generate sustainable circular solutions in the broader sense of the word (achieving economic prosperity, social equity and positive impacts on the environment).

References

Frosch, Robert A. and Nicholas E. Gallopoulos. 1989. Strategies for Manufacturing. Scientific American 189 (3) 152

Ghisellini, P., Cialani, C. & Ulgiati, S., 2016. A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114, pp.11–32. Available at: http://dx.doi.org/10.1016/j.jclepro.2015.09.007.

Kirchherr, J., Reike, D. & Hekkert, M., 2017. Conceptualizing the Circular Economy: An Analysis of 114 Definitions.

Preston, F., 2012. A Global Redesign? Shaping the Circular Economy, London. Available at: http://www.chathamhouse.org/sites/files/chathamhouse/public/Research/Energy, Environment and Development/bp0312_preston.pdf.

Skene, K. & Murray, A., 2015. Sustainable Economics: Context, Challenges and Opportunities for the 21st-Century Practitioner, Sheffield: Greenleaf Pub. Ltd. Available at: http://www.ingentaconnect.com/content/9781783531530.

[i] This article benefited from the review and feedback from Mr. Ken Alston Senior advisor of the Circular Economy Platform of the Americas and Mr. Kevin de Cuba Director of the Americas Sustainable Development Foundation and President of the Circular Economy Platform of the Americas.

[i] Lorena García is Program Manager the Americas Sustainable Development Foundation and currently manages the Circular Economy Platform of the Americas. She holds a bachelor’s degree in chemical engineering and a master’s degree in Innovation and Technology Management from the University of Bath (UK). During her Master's, she performed research on the Circular Economy (CE) tailored to emerging countries, analyzing the opportunities and challenges to transition towards a CE in low and middle-income countries in the American continent.

[i] The Americas Sustainable Development Foundation (ASDF) is an independent advisory foundation focused on linking people, ideas, and action to achieve sustainable development across the American continent. See for more information: www.sustainableamericas.com.