Circular economy is not the panacea many hoped for says Lancaster University Management School


A study undertaken by Lancaster University Management School has suggested that the circular economy risks becoming counterproductive unless it stops being referred to as a panacea for all sorts of environmental issues.

Along with colleagues from Lund University and the Royal Institute of Technology in Sweden, the researchers warned in a paper in the Journal of Industrial Ecology that the definition of the circular economy is unclear and lacks substance.


In particular, they warned:

  • The concept of a circular economy is so diffuse and sprawling that it is not possible to measure its impact. It includes everything from recycling systems, renting, replacing products with services, to developing apps for the sharing economy, etc. 
  • Advocates of a circular economy tend to ignore the vast amount of materials and products that people have already accumulated. The concept is reduced to a question of choosing between linear and circular products and disregards physical laws about the physical limitations of materials and the complexity of the waste; even though these issues are crucial if a circular economy is to become a reality.
  • Some businesses only develop circular activities for parts of their operations. This may be due to the difficulty of scaling up pilot projects; often it is only a small part of the operation that is characterised by a circular economy, while the core activities continue as usual.
  • Contrary to what the advocates say, there is poor knowledge about how a circular economy will affect the utilisation of resources and growth. This makes it difficult to measure the environmental impact, especially in the long term and over larger geographical scales. Some claim that a circular economy only delays, rather than eliminates, the negative environmental impact of the linear economy.
  • Although advocates of a circular economy claim to contribute to a socially sustainable future for all, the concept tends to be reduced to a debate about resource consumption. There is no connection to how the concept would lead to greater social equality.
  • Some critics argue that the circular economy depoliticises industrial and environmental policies while advancing the power of the market and businesses. It is an enticing concept which promises that everyone will benefit from its implementation. It enables discussions about synergies, win-win and possibilities rather than about compromises, problems and limitations.

Study co-author Alison Stowell from Lancaster University Management School said: “We recognise that the circular economy agenda has made significant impact, and this study aims to highlight the areas in need of research, policy and managerial attention to drive further progress.

“We hope it will assist in the development of a more modest pathway to circularity that is concrete, transparent and inclusive.”

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