Formation of the Concept of a Circular Economy1

Mariia A. Gureva

internauka.colab@gmail.com

Industrial University of Tyumen, Tyumen, Russia

Yulia S. Deviatkova

internauka.colab@gmail.com

Industrial University of Tyumen, Tyumen, Russia


ABSTRACT

The article represents a historical survey that describes the emergence and development of the circular economy as an independent concept and its interconnection to the phenomenon of new industrialization. The variety of definitions of the concept “circular economy” given by Russian and foreign scientists are provided in the article; basic approaches to the concept formation are determined. The comparative analysis of basic concepts related to the environmentalism (sustainable development, ecologization, green economy, circular economy) was carried out. The evolutionary development of ecological imperatives that take part in the concept formation is studied; the characteristics of the concept, current state and general development prospects are described. The article is concluded by the clarified definition of “circular economy”. From the author’s point of view, the circular economy concept is a general approach to promote green growth in countries’ development that allows overcoming global ecological problems and, as a result, achieving sustainable state of the planet and saving lives on Earth.

Keywords: industrialization, sustainable development, green economy, circular economy, social and economic development.


INTRODUCTION

The research objective, which is based on the comparative studies methodology, is to conduct Acceleration in modern human development process, demonstrating that the world is speeding up and there is much less time needed for new scientific and technical revolution. This phenomenon has dire consequences. Humanity seems not to be able to transform its ideas on the interaction between human society and nature: the change of daily habits and behaviors to confirm the statements above appears in the thought of O. N. Yanitsky, who says “…biological forms (including ecosystems), that have been formed during evolution have incompatible temporalities with socially constructed forms of modern life…” (Shvab, 2017).

In the era of information accessibility, men with incredible opportunities for continued self-improvement, self-education and self-development, have chosen a different way of life, simplifying their worldview and getting lost in the vast field of information, putting incorrect emphasis on his priorities and interests. All these processes can be summarized by a well-known definition “consumer society”. The paradox is that not only the wasteful lifestyle of the population in developed countries, but also the increased resource intensity of the production of the developing countries has led the climate changes and ecosystems to decline (Melnik; Hens, 2007).

In reality, a “super-consumer” model has rapidly changed into a “super-contaminator” model and caused a series of environmental disasters and catastrophes. Global environmental problems accumulated over the history of civilization’s development have become clear by the beginning of the 21st century and has demanded urgent solution. Due to the need of constant application of primary resources, which has finally become a waste, the existing model of linear economy in terms of industrialization development and the planet population growth appeared to be ineffective, unable to provide the necessary quality of life. Gradually, sometimes without realizing it, society itself has created a trap in the form of scarcity of various types of resources, and the economies of most countries are highly dependent on their volatility (Mashukova, 2016).

The wrong perception and construction of a consumption model that evolved during the industrial revolution in the 19th-20th centuries has become the basis of the linear economic model, based on the principles of the inexhaustibility of natural resources, without concern for waste management. Nowadays resources are considered limited, and most ecosystems, having lost the ability to assimilate, have become unstable (The Ellen MacArthur Foundation, n.d.). Without changes in the developmental trajectory and the review of key approaches to production and consumption; a production crisis and further deterioration in the quality of life are inevitable (Gureva, 2019).

The digital revolution at the beginning of the 21st century, including a number of attempts to create and develop the robotization process, the Internet of things and artificial intelligence has marked the transition to a new stage in the technological development of industrial production, called “Industry 4.0”, whose main driving force is the Internet of things. At the same time, the organization of the production process is characterized by a sharp reduction of energy and material consumption, the design of materials and organisms with predetermined properties. According to Kalabina E.G. (2017), consumer demand serves as the main driver of Industry 4.0, and the general concept is based on the perception of sustainable development as a process for maximizing the consumption of goods and services (Ivanova et al., 2018).

The transition to Industry 4.0 will create a world of virtual and physical unity of production with erased industry boundaries, significantly reducing the technological impact on the environment (Socheeva, 2017).

When considering digitalization as a transformational technology, on the one hand, an increase in public awareness is observed, and on the, the effect of a certain “transparency” of society appears. There is a shift in consumer preferences from the “I want to own” to “I want to use” path; the boundaries of understanding in the field of individual professional and everyday skills, personal concepts of work, leisure and education as a whole, are changing. The new industrial era has a distinctive feature in the perception of labor from the point of social efficiency, when the workplace is considered as a tool for self-realization (the development of E. Toffler's concept of prosumerism) (Nechaeva, 2018).

METHODS

In the middle of 20th century, the world scientific community, based on the analysis of the downward course of the scientific and technical revolution, made a conclusion in terms of the limits for growth opportunities set by linear (industrial) model exploration at a global scale that led to the concept of circular economy as an alternative solution.

In 1972, the United Nations Conference on the Environment was held in Stockholm (Sweden); the United Nations Environment Programme (UNEP) was established as the main UN body in the field of environment. The United Nations Conference on Environment and Development (UNCED), also known as the Rio de Janeiro Earth Summit, was a major United Nations conference held in Rio de Janeiro in 1992. The primary result of the conference was to raise public awareness of the need to integrate environment and development. In June, 2012, the conference “Rio+20” has approved the nonbinding document called “The Future We Want”, a 49-page work paper, including Millennium Development Goals. In it, the heads of state of the 192 governments renewed their political commitment to sustainable development and declared their commitment to the promotion of a sustainable future. The document largely reaffirms previous action plans. The 17 Sustainable Development Goals and 169 targets were announced at the UN document entitled “Transforming our world: the 2030 Agenda for Sustainable Development” in 2015 (The United Nations Environment Programme, n.d.).

Over the past decade, special attention has been paid to the new concept of an economic model development, called the “circular economy”, which is considered to be a new path for the development of society along the path of sustainability (Figure 1).

Figure 1. The path to the formation and popularization of the economics of environmentalism (prepared by the authors based on the works by Batova et al. (2018) and Gureva (2013).

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A study of the considered areas of the economy of environmentalism showed their interdependence and interdetermination, the similarity of the formation approach, confirming that their final global goals are the same – the stable state of the planet and global survival, with differences only in the ways of achieving the goals and main approaches (Batova et al., 2018; Circular Economy Australia, 2000; Reike et al., 2018).

The comparative analysis of the economics of the environmentalism concepts based on the main criteria is shown in Table 1.

Table 1. Comparative analysis of the economics of environmentalism concepts

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Source: Prepared by the authors based on the following references: Batova et al. (2018); Belik et al. (2018); The Ellen MacArthur Foundation (n.d.); The United Nations Environment Programme (n.d.); Circular Economy Australia (2000); Reike et al. (2018); Rudneva & Gureva (2015).

RESULTS

The key difference between the initially accepted concept of sustainable development and the later concept of the circular economy is the expansion of its sphere of concepts, because in the interconnection of environmental and economic spheres, a greater merger occurs through the necessary interaction (Figure 2).

Figure 2. The relationship between the concepts of sustainable development and the circular economy (prepared by the authors based on the work by Murray et al., 2017).

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The transition from industrial to post-industrial society in the 1960s of 20th century based on the technological and further innovative progress caused the appearance of the concept of circular economy in the scientific literature. The circular economy concept was introduced in 1966 by Kenneth Ewart Boulding (an American economist). The concept was mainly rooted in ecological and environmental issues: “a man should find his own place in circular environmental system”. Later the concept has gained more economic character (Homrich et al., 2018).

There are several opinions on the origin of the term “circular economy”; a number of scientists believe that the circular economy is a new stage in the development of the concept of sustainable development and the green economy; on the other hand, much less often, it is considered as an independent direction of the economic theory that appeared in the 1970s of the 20th century (Gureva, 2013; 2019).

The literature search has been performed in Scopus, Elsiver, Elibrary, WOS databases and Google Scholar, using “circular economy” as a keyword in the title, keywords or abstract of the document. The term is widely spread in foreign scientific literature while in Russian academic literature it is much less common. Nevertheless, a number of scientists emphasize that the circular economy is not an analogue of the “green” economy, but acts as an integral part of it, a way to achieve sustainable development (Mashukova, 2016).

The earliest reference to the circular economy belongs to Walter Stahel. In his 1976 research report, he offered the idea of transition from the linear model of resource-dependent economy to an economy in loops (or circular economy) (Gureva, 2019; D’Amato et al., 2017; Reike et al., 2018).

The main definitions of the term “circular economy” given by different studies are represented in Table 2.

Table 2. Main definitions of the term “circular economy”

F F

Source: Prepared by the authors based on the following references: Burger et al. (2019); Kalabina (2017); Kirchherr et al. (2018); Maier (1999); Margaryan (2018); Mishenin & Koblianska (2017); Nikulychev (2017); Prieto-Sandoval et al. (2018); Suárez-Eiroa et al. (2019); The United Nations Environment Programme. (n.d.); The Ellen MacArthur Foundation. (n.d.).; United Nations. (n.d.); Murrayet al. (2017); Circular Economy Australia. (2000); Sauve et al. (2016); Alexandrova (2017); Nechaeva (2018), Yanitskiy (2018).

In general, approaches for “circular economy” definition for the 15-years long period of its development (from 2004 to 2019) may be grouped as follows: a certain model, activity, system, strategy, process, tool, economy, and philosophy. The most commonly used and generally accepted, found in the reviewed papers and the media, is the term proposed by The Ellen MacArthur Foundation in 2012. It is worth noting that at the moment there is no officially approved definition for the term (Figure 3).

Figure 3. Approaches for the definitions of “circular economy”

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Source: prepared by the authors

There are three stages distinguished in the evolution of the circular economy (Table 3).

Table 3. Stages of the evolution of circular economy

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Source: Prepared by the authors based on the work by D’Amato et al. (2017).

The name Ellen MacArthur is closely connected with the concept of a circular economy. She finished her single-handed circumnavigation of the globe in world record time in 2005. Following her retirement from professional sailing in 2010, Ellen MacArthur announced the launch of the Foundation named after her, aiming at the acceleration of the transition to a circular economy. The Ellen MacArthur Foundation works in Education & Training, Business & Government, Insight & Analysis, Systemic Initiatives, and Communications.

The Foundation is now a global leader in applying systems theory and complexity theory to tackling the greatest challenges of our time, as it works with business, government and academia to build a framework for an economy that is restorative and regenerative by design. The Fund is an active participant in the world's leading economic forums and attracts an increasing number of founding partners (Sergienko; Rohn, 2004).

Based on the academic papers analysis, the authors made the conclusion that most scientists use the prefix “re” while describing the principles of the circular economy. The prefix “re”, occurring originally in loanwords from Latin, used with the meaning “again” or “again and again” to indicate repetition, reflects the meaning of the circular economy (D’Amato et al., 2017).

Initially, there were three guiding principles of the circular economy – “3R” principles (reduce, reuse, and recycle) that have been transformed into “9R” principles. It should be noted that their further development is still possible (Figure 4). A detailed characteristic of the 9R principles of circular economy is presented in Figure 5.

The lack of a clear conceptualization of the basic principles, together with an increasing number of additionally emerging areas in the study of R-imperatives, can be explained by the following:

• Many research papers by different authors are devoted to the circular economy concept; that is why a clear area of knowledge can be hardly determined;

• The circular economy is not a strictly isolated field of study; its origin took place at the intersection of different sciences;

• Globalization processes taking place in the scientific environment allow us to identify and present to the world scientific community previously unknown studies, which affects the dynamic perception of the circular economy;

• International organizations use various R-principles in their terminology and official documents; sometimes the principles and terminology of different companies are not mutual responsive (D’Amato et al., 2017; Jiao; Boons, 2014).

According to the studies by The Ellen MacArthur Foundation (the pioneer in promoting the circular economy ideas), its several features are distinguished as follows:

• Maintenance of a sustainable balance of natural resources and monitoring their condition and use in order to avoid the natural capital depletion;

• Development, distribution and widespread implementation of optimized manufacturing processes achieve the maximum level of its reuse;

• Increase of the efficiency of the economic and environmental systems of industrial activity by excluding negative effects (Alexandrova, 2017; Sergienko; Rohn, 2004).

Figure 4. Evolution of the circular economy guiding principles

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Source: prepared by the authors based on the following published works: Batova et al. (2018); Mashukova (2016); Nikitina; Zvonovskiy (2018); Sazonova (2013); Serbulova et al. (2016), Sivolapenko et al. (2017).

Figure 5. Characteristic of the 9R principles of circular economy

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Source: prepared by the authors based on the works by the following authors: D’Amato et al. (2017; Jiao; Boons (2014); Kirchherr et al. (2017); Sauvé et al. (2015).

DISCUSSION

The practical application of the circular economy can be observed at all levels of the global economic activity – from an individual action to the planetary level of interaction of countries representatives, which will make possible the transition from the linear model of the economy (Table 5).

Table 5. Comparative analysis of the linear and circular economy models

F

Source: Prepared by the authors based on the following references: Belik et al. (2018); Esipova et al. (2018); Lieder; Rashid (2016).

There are several challenges faced during the implementation of the circular economy concept:

1) Cultural (companies’ environmental decisions and actions, lack of interest and awareness of consumers, following linear economy principles during operational process, and interest in final value chains);

2) Legislative (limited closed-loop procurement, lack of international consensus, and prohibition of laws and regulations);

3) Market barrier (poor quality materials, standardization, high investment value, and limited financing of circular business models);

4) Technological (the ability to deliver high-quality refurbished products, lack of presentation of project decisions, and lack of environmental impact assessment) (Kirchherr et al., 2017).

A number of authors noted similar prerequisites necessary for an effective transition to a circular economy:

• Necessity to establish a strong legal and policy framework for environmental protection;

• Government support measures for organizations implementing the principles of circular economy;

• Support and stimulation of research activities devoted to the circular economy;

• Popularization and promotion of eco-friendly and environmentally conscious business-ideas among companies;

• Increased environmental awareness and education (Alexandrova, 2017; Larionov, 2018).

CONCLUSION

The circular economy has great potential for optimizing managerial and technological solutions to overcome environmental and economic problems in the resource sphere. The theoretical base of circular economy was influenced by economic theories of the industrialization development of socio-economic systems.

Summarizing the above, it can be assumed that the circular economy is an economic model based on the principles of closed systems of technological and biological cycles, which can be considered a tool of the green economy aimed to achieve sustainable development and fulfill the key Sustainable Development Goals (SDGs).

The concept of circular economy is a universal way of green growth, which allows taking the place of the linear economy model, and thereby minimize the resource dependence of production, overcome the global social and economic inequality, solve environmental problems caused by the global crisis and, finally, overcome the crisis of environmental sustainability and save life on earth.


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[1] The research is made with the financial support of the Grant of the President of the Russian Federation to support young Russian scientists – candidates of Sciences – in terms of the research MK-587.2019.6 “Development of theoretical and methodical aspects of the circular economy concept as a new trend of sustainable social and economic development”.


Received: Jun 30, 2020

Approved: Jun 30, 2020

DOI: 10.20985/1980-5160.2020.v15n2.1656

How to cite: Gureva, M.A., Deviatkova, Y.S. (2020). Formation of the Concept of a Circular Economy. Revista S&G 15, 2, 156-169. https://revistasg.emnuvens.com.br/sg/article/view/1656