Approaches to the Circular Economy

Introduction

The concept of the circular economy which looks to reduce the demand for raw material inputs and natural resources and to recover, reuse and recycle those inputs and resources as an integral part of the production process, is gaining increasing momentum in political and business thinking about the transition to a more sustainable future (Jones and Comfort 2017). The European Commission (2015), for example, argued that “the transition to a more circular economy, where the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste is minimised, is an essential contribution to the European Union’s efforts to develop a sustainable, low carbon, resource efficient and competitive economy”. The circular economy embraces all stages of the product life cycle from both the product design and the production process, through marketing and consumption to waste management, recycling and re-use. Accenture Strategy (2015), for example, suggested “transitioning to the circular economy may be the biggest revolution and opportunity for how we organize production and consumption in our global economy” and that “at its essence, the circular economy represents a new way of looking at the relationships between markets, customers and natural resources”. PricewaterhouseCoopers (2017) argued “ultimately the circular economy is about rethinking everything, including business models themselves, so we can reduce consumption”. In short, a transition to the circular economy will bring major changes for consumers, in patterns of consumption and in the consumption process.

While research work on incorporating pollution and waste in economics (e.g. Leontief 1970; Nakamura 1999; Duchin 1990) can be traced back over fifty years, more recently academic reseachers have taken an increasing interest in the circular economy across a wide range of business sectors. Jones and Comfort (2018a), for example, explored how Europe’s leading retailers have publicly addressed circular economy approaches and offered some general reflections on the application of the concept within the retail sector of the economy. Girard and Norca (2017) proposed a circular economy model to make tourism more sustainable but recognised that circular tourism requires the development of appropriate tools and indicator data, to test the efficiency of this model. Leider et al. (2017) examined the possibilities of circular economy implementation in manufacturing systems using a multi-method simulation system approach to link design and business strategy. Lebre et al. (2017, p. 662) explored the role of the mining industry and suggested, “mines can make significant progress if they apply the circular economy principles at the mine site level” (p. 662). The transition to a circular economy has major implications for the consumption process and for consumers and it seems likely to attract growing research interest within the academy. With this in mind, this chapter outlines the concept and characteristics of the circular economy, offers a review of the nature and variety of academic research literature on the circular economy and, explores some of the challenges facing researchers who look to examine its operation within the business environment.