Coming Full Circle: Why Social and Institutional Dimensions Matter for the Circular Economy

Abstract

In light of the environmental consequences of linear production and consumption processes, the circular economy (CE) is gaining momentum as a concept and practice, promoting closed material cycles by focusing on multiple strategies from material recycling to product reuse, as well as rethinking production and consumption chains toward increased resource efficiency. Yet, by considering mainly cost-effective opportunities within the realm of economic competitiveness, it stops short of grappling with the institutional and social predispositions necessary for societal transitions to a CE. The distinction of noncompetitive and not-for-profit activities remains to be addressed, along with other societal questions relating to labor conditions, wealth distribution, and governance systems. In this article, we recall some underlying biophysical aspects to explain the limits to current CE approaches. We examine the CE from a biophysical and social perspective to show that the concept lacks the social and institutional dimensions to address the current material and energy throughput in the economy. We show that reconsidering labor is essential to tackling the large share of dissipated material and energy flows that cannot be recovered economically. Institutional conditions have an essential role to play in setting the rules that differentiate profitable from nonprofitable activities. In this context, the social and solidarity economy, with its focus on equity with respect to labor and governance, provides an instructive and practical example that defies the constraints related to current institutional conditions and economic efficiency. We show how insights from the principles of the social and solidarity economy can contribute to the development of a CE by further defining who bears the costs of economic activities. Keywords:circular economy flow fund model industrial ecology institutional economics labor social and solidarity economy Conflict of interest statement: The authors have no conflict to declare.

Conceptualizing the Circular Economy: An Analysis of 114 Definitions

“…Several authors such as Sauvé et al (2016, p.54), Murray et al (2017, p.369) and Moreau et al (2017) claim that the CE concept largely neglects social equity. This is confirmed by our coding with social equity only considered in 18%-20% of definitions.…”

“…Yet it is employed -besides by Ellen MacArthur Foundation (2012) and sometimes in abridged form -only eleven times, namely by Charonis (2012), Ellen MacArthur Foundation (2014), EUKN (2015), Schut et al (2015), Hobson (2016), Cullen (2017) Goldberg (2017), Moreau et al (2017), Niero et al (2017) and Skene (2017). Only three other definitions in our sample are used more than once: The (expanded) definition by Ellen MacArthur Foundation (2013a) (used three more times), the definition by Preston (2012) (used one more time) and Li et al (2010) (used one more time).…”

Supply Chain Configurations in the Circular Economy: A Systematic Literature Review

“…The fourth goal aims to create and preserve economic, social, and ecological value to maximize ecosystem function and human well-being [1,2,6,15,55,64,68,79,80]. Authors [2,6,15] therefore argue for an integration of the three in the CE and Geng et al [44] claim that the "CE aims for simultaneous positive outcomes for the Chinese economy, society, and the environment" (p. 997) while in reality economic growth and environmental protection might often be conflicting [54].…”

“…Authors [2,6,15] therefore argue for an integration of the three in the CE and Geng et al [44] claim that the "CE aims for simultaneous positive outcomes for the Chinese economy, society, and the environment" (p. 997) while in reality economic growth and environmental protection might often be conflicting [54]. Three aspects are especially prominent; social justice in the global economy [2,15,79], declining human health because of pollution and environment degradation-an issue that is particularly prominent in Chinese CE research [16,47,68], and inter-generational justice and human development taking a future perspective [1,2,13,14,80].…”

“…Two contributions are concerned with business model research [73,74]. More abstract studies seek to define the CE more clearly and assess its future challenges [75][76][77][78] or highlight the social [2,15,79,80] or economic aspects of the concept further [1,18]. Lastly, two studies explore the interchanges between the CE and information technology (IT) and waste [81] and the CE and global waste streams [82].…”