Limitations of the Conventional Circular Economy (CE)

Some key definitions and terms necessary to appreciate the criticism leveled at the conventional circular economy approach

A much-used Industrial Circular Economy Definition

Definitions abound. Here I like to quote from Wijkman and Skånberg’s (2016) reference to an early definition by the Ellen MacArthur Foundation [reference to the biological and agricultural part of what I have termed ’a real circular economy’ is discussed elsewhere]:


The first report of the foundation – Towards a Circular Economy, I – was presented in early 2012 and backed up by a group of leading multinationals (..) The report makes a strong pitch for a circular economy and defines the objectives as follows:

“A circular economy is an industrial system that is restorative by intention and design. In a circular economy, products are designed for ease of reuse, disassembly and remanufacturing – or recycling – with the understanding that it is the reuse of vast amounts of material reclaimed from end-of-life products, rather than the extraction of new resources, that is the foundation of economic growth. 

Moreover, the circular economy shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior and innovative design of materials, products, systems, and, within this, business models.”

(..) The calculations in the report were based on the assumption that products and the components involved would only be recycled/reused once. The objective in the future would rather be to add several cycles to a product and its main components. That ought to be made much easier through new technology developments – such as more intelligent design and through the ”Internet of Things”, which, among other things, would help keep track of materials and components and make upgrading much easier.

Hence the main business case to explore would be to preserve the embedded labour, energy and material value in finished products as long as possible.                                                                                                                                                                                                                                                                                                           »

Anders Wijkman and Kristian Skånberg (2016/2017 [this edition published in 2017])):The Circular Economy and Benefits for Society. Jobs and Climate Clear Winners in an Economy Based on Renewable Energy and Resource Efficiency. A study pertaining to Finland, France, the Netherlands, Spain and Sweden. Published by Club of Rome. [emphasize added]


The ‘Decoupling’ Term

According to Wijkman and Skånberg (2016):


We are in urgent need of decoupling, or put in other words, a transition to an inclusive and circular economy (..) Decoupling refers to the ability of an economy to grow without corresponding increases in energy and resource use (source limits) and in environmental pressure (sink limits).  

A decoupled economy should ideally not negatively affect soil fertility and biodiversity, not diminish resource stocks and not lead to increased toxicity of land, water and air. 

While relative decoupling of economic growth from resource use has been happening over the past decades, the gains made so far have been rapidly eaten up by a combination of economic growth and the so-called rebound effect, i.e. that the resources freed up by increased efficiency are used up very soon through increased consumption (..) To obtain “absolute decoupling” concerning both energy and materials (..) specific policy measures will be needed..

[It is also referred to the European Commission which in 2014 stated that] the aim now is a much broader scope, aiming to «promote the circular economy across the whole value chain.» [As noted by Stahel (2019:51), in the linear industrial economy, ‘manufacturers optimize their supply chain [only] up to the point of sale’ ]                                                                                                                                                                                                                                                                                                                                          »

Anders Wijkman and Kristian Skånberg (2016/2017 [this edition published in 2017]):The Circular Economy and Benefits for Society. Jobs and Climate Clear Winners in an Economy Based on Renewable Energy and Resource Efficiency. A study pertaining to Finland, France, the Netherlands, Spain and Sweden. Published by Club of Rome. [emphasize and text in brackets added]


Wijkman and Skånberg 2016 also identifies three routes to decoupling that should be pursued simultaneously:

  1. Enhancing energy efficiency *
  1. Increasing the percentage of renewable energy in the energy mix
  1. A materially-efficient circular/performance-based economy ¤ [referring to]
    • 50% of all virgin materials being replaced by secondary materials
    • doubling the product life of long-lived consumer products compared to today #

* «Energy efficiency encompasses all changes that result in a reduction in the energy used for a given energy service or level of activity (..) The reduction in energy consumption is usually associated with technological changes, but not always since it can also result from better organization and management or improved economic conditions in the sector (“nontechnical factors”)

(..) Avoiding unnecessary consumption is certainly a matter of individual behavior, but it is also often a matter of appropriate equipment: thermal regulation of room temperature and automatic deactivation of lights in unoccupied hotel rooms serve as good examples of how equipment can reduce the influence of individual behavior.» [emphasize added]

# According to Stahel (2019:51): «As a longer use life of goods is equivalent to fewer sales, resulting in smaller production volumes, a lower economy of scale and higher unit costs, this option is poison to most producers’ balance sheets. A shorter service-life of objects is inherently more interesting to manufacturers in today’s policy framework,»  (Walter R. Stahel 2019: Circular Economy-A users guide, emphasize added)

¤ As an alternative to today’s business models, Stahel promotes a ‘Performance Economy’ where services (‘results’) are sold instead of the goods themselves and with the producer retaining ownership and liability, even beyond the life of the original product: «Since responsibility for the materials used in a product remains with the manufacturing company, strong incentives are created to earn revenue on what has already been produced for as long as possible.» (Wijkman and Skånberg, ibid., emphasize added)


Criticism leveled at the conventional circular economy

Let’s start with Sharon Ede (2016):


UN Sustainable Development Goal 8 calls for

  • improving ‘global resource efficiency’ and
  • ‘decoupling economic growth from environmental degradation’.

[But is that possible?] Materials can keep circulating through being designed for disassembly and remanufacturing, or kept in use longer through being designed for durability, but if the ‘circle’ or total demand for materials and energy keeps expanding, we have not solved our civilisation’s challenge [and this can not be solved with] the current development paradigm which dominates both economics and politics globally, that of continuous economic growth into the indefinite future.

Historically, countries have sustained this growth by appropriating carrying capacity (resources, ecological services, waste sinks) from elsewhere on the planet through economic or military power, with waste (particularly CO2) being emitted into the global commons. However this model of dependence on ‘ghost acreage’ ignores one simple reality – globally, not everyone can be a net importer of biocapacity..Globally, we are liquidating natural capital and calling it economic growth. It is like ripping off parts of a house to use as firewood in order to keep warm.  [This is why we need to look at entire supply/value chains. As noted by the economist Kate Raworth: ‘Cities must take on global responsibility for their [own] supply chains’].


Sharon Ede (December 2016): The Real Circular Economy [emphasise, bullets and text in brackets added] 

De Decker (2018) puts forward three main points of criticism:

  1. Too Complex to Recycle. The first dent in the credibility of the circular economy is the fact that the recycling process of modern products is far from 100% efficient. Modern products are composed of a much wider diversity of (new) materials, which are mostly not decomposable and are also not easily recycled.
  1. How to Recycle Energy Sources? The second dent in the credibility of the circular economy is the fact that 20% of total resources used worldwide are fossil fuels. More than 98% of that is burnt as a source of energy and can’t be re-used or recycled. Besides, recycling materials also requires energy, both through the recycling process and the transportation of recycled and to-be-recycled materials. To this, the supporters  of the circular economy have a response: we will shift to 100% renewable energy. But this doesn’t  make the circle round: to build and maintain renewable energy plants and accompanied infrastructures, we also need resources (both energy and materials). 
  1. Input Exceeds Output. The third dent in the credibility of the circular economy is the biggest:  global resource use – both energetic and material – keeps increasing year by year. Growth makes a circular economy impossible, even if all raw materials were recycled and all recycling was 100% efficient. The amount of used material that can be recycled will always be smaller than the material needed for growth. To compensate for that, we have to continuously extract more resources. [Furthermore] A considerable segment of all resources – about a third of the total – are neither recycled, nor incinerated or dumped: they are accumulated in buildings, infrastructure, and consumer goods. [* see insert, below]
 * [Insert: More on resources accumulated in stock

Jonker and Faber (2021) notes that:

«A large percentage of (processed) raw materials is stored in buildings, roads, cars, and so on. All these items have different lifespans. The lifespan of a plastic bottle may be a few weeks, but a cycle tunnel or a block of flats will last for 30 if not 50 years—the materials used are effectively stored as stock. Circularizing as many raw materials, components, and products as possible therefore requires radically different ways of organizing

 Jan Jonker , Niels Faber (2021): Organizing for Sustainability. A Guide to Developing New Business Models

We need a strategy especially for circularising  resources stored in buildings and other infrastructure. This would be needed for a radical reduction of extraction of new raw materials; Jonker and Faber (ibid.) promote the ambition of a substantially reduced use of virgin materials: 50% by 2030 and 100% by 2050. Implementation of such a strategy is sorely missing, but has been proposed by Rau and Oberhuber (2023) (referred in’A  Circular Industrial Economy, Stahel style’).]

A more responsible use of resources is of course an excellent idea. But to achieve that, recycling and re-use alone aren’t enough. Since 71% of all resources cannot be recycled or re-used (44% of  which are energy sources and 27% of which are added to existing stocks), you can only really get better numbers by reducing total use..we need to make less stuff: fewer cars, fewer microchips, fewer buildings. This would result in a double profit: we would need less resources, while the supply of discarded materials available for re-use and recycling would keep growing for many years to come. It seems unlikely that the proponents of the circular economy would accept these additional conditions. The concept of the circular economy is intended to align sustainability with economic growth – in other words, more cars, more microchips, more buildings. For example, the European Union states that the circular economy will ‘foster  sustainable economic growth’.


Kris De Decker (November 7, 2018) in Local How Circular is the Circular Economy? [emphasise, bullets and text in brackets added] 

Mulrow (2015) emphasised the local dimension:

“..There are many ways to fold the concepts of community, teamwork and local action into the Ellen MacArthur Foundation’s principles, but these are not the focus of its work. Only three of the 26 case studies on the foundation’s site make mention of localized material sourcing and impacts…There is need for a new level of nuance — a local circular economy — one, in which materials, ideas and feedback flow cyclically and locally.

John Mulrow, Interim Executive Director, Plant Chicago (2015) The circular economy’s missing ingredient: Local

Carbajal (2020) emphasise the need to slow the circular economy:


Basically, corporations are putting all the responsibility on us. If the planet is getting dirtier, it’s not their fault, it’s ours. Because we’re all not recycling enough. They are also betting against the odds that a technological fix will bail us out of the perpetually polluting and deadly path we’re now on.

.. recycling alone is a grand distraction from the real solution: preventing pollution at the source. 

 Where to start, then?

Let’s start by adding “slow” to the term “circular economy”, because language matters. 

For our economy to be restorative and generative, not just cycling more and more resources around faster and faster, we need to both: slow the flow and close the loop by reducing production and consumption. This means reversing the waste hierarchy and putting “refuse” (as in, “don’t want it”) and “reduce” at the top of the list. This allows us to tackle consumerism, overconsumption and overproduction head-on while questioning the notion of growth altogether.

Yes.. this means consuming less and…rolling-out mindful and ecological designs that enable sustainable ecosystems for all of us (..) [Carbajal here stress the need for] open source information and standards to enable to repair and foster innovation, which is: 

  • FREE – Information freely available for anyone to access.
  • EDITABLE – in formats that allow people to remix, add, build upon, learn and improve.
  • OPEN – share under open licenses to enable legal decentralised collaboration and enable the right to fix and the access to repair tutorials or spare parts.


Paula Tejón Carbajal (2020): Slowing the circular economy [emphasise, bullets and text in brackets added] 

Now, with the above in mind, let’s look at a list of 10 strategies that increasingly help to shape sustainability and circularity (from bottom to top), according to Jonker 2021 :

Overview of R-strategies


10    Refuse: avoid both virgin and processed materials.

9      Reduce: reduce the use of raw and processed virgin materials.

8      Rethink & Redesign: design or redesign of a product or component with sustainability and circularity as starting points.

7      Re-use: Re-use: reusing products, components, or virgin materials (whether or not they have previously been refurbished).

6      Repair: regular maintenance and repair, whether or not combined with redesign and digitisation.

5      Refurbish: refurbish products and parts such that they are ‘like new’.

4      Remanufacture: making new products or parts from previously made products and/or parts.

3      Repurpose: reusing products and/or parts but with a different purpose/function, whether or not combined with Refurbish.

2      Recycle: conversion of products and parts to virgin materials and reuse.

1      Recover: energy recovery from materials (also called thermal upcycling)


Jan Jonker, Niels Faber and Timber Haaker (2021) Quick Scan Circular Business Models Inspiration for organising value retention in loops.  The Hague: Ministry of Economic Affairs and Climate Policy

There is one dimension still missing, however. That is provided by the cradle to cradle model (C2C):

«Damaging practices don’t become positive just because we do them less; they just serve to delay the inevitable. This is where C2C stands apart from conventional thinking around sustainability with its focus on optimising positive impact(Barbara Nabel (2020): The Cradle to Cradle, LCA and Circular Economy: A love triangle)

This 6 (2014) summarizes messages from McDonough & Braungart’s 2002 book Cradle to cradle. Remaking the Way We Make Things. The book is quoted from below:

The typical response to industrial destruction has been to find a ‘less bad approach’…. [namely:]

  • Eco-efficiency
  • [and the environmental] movement’s three R’s -reduce, reuse, recycle

The machines of industry would be refitted with cleaner, faster, quieter engines.. [providing] economic benefits, which can be considerable…Industry would redeem its reputation without significantly changing its structures or compromising its drive for profit.

..Eco-efficiency is an outwardly admirable (..) concept, but it is not a strategy for success over the long term, because it does not reach deep enough. It works within the same system that caused the problem in the first place, merely slowing it down with moral proscriptions and punitive measures. It presents little more than an illusion of change. Relying on eco-efficiency to save the environment will in fact achieve the opposite; it will let industry finish off everything, quietly, persistently, and completely. 

What about an entirely different model? What would it mean to be 100 percent good?  The cradle to cradle production model mimicks nature as the very concept of waste is eliminated by design;

Materials are designed from the outset so that, after their useful lives, they will provide nourishment for something new.” Either in the form of ‘biological’ or ‘technical nutrients’:

  • Biological nutrients’ are those that will ‘easily re-enter the water or soil without depositing synthetic materials and toxins.’
  • Technical nutrients’ will ‘continually circulate as pure and valuable materials within closed-loop industrial cycles, rather than being ‘recycled’ –really, downcycled –into low-grade materials and uses.’                                                                                                                                                                                                                                                                                                                           
[William McDonough & Michael Braungart (2002: 27,45,51,61-62,67 and back-cover): Cradle to  cradle.  Remaking the Way We Make Things. [Emphasise, bullets and text in brackets added] (Related website:

Next, see McDonough’s 2 min video: William McDonough at 2018 Copenhagen Fashion Summit.

References: «Being less bad is not being good, its being bad by definition, but less so. Less is a mathematical relationship, bad is a human value..So the question becomes what is the right thing to do?» The answer was indicated already by William McDonough and Michael Braungart in 2002:

“..triple bottom line accounting tends to focus on economic concerns, with ecological or social benefits sometimes considered as an afterthought..The concept of the triple top line moves accountability to the beginning of the design process, assigning value to a multiplicity of economic, ecological and social questions that enhance product value.

 In our work with corporate clients… we have found that a visual tool, a fractal triangle, helps us apply triple top line thinking throughout the design process.

Typically, meeting the triple bottom line is seen as a balancing act, a series of compromises between competing interests played out in product and process design. The key insights offered by the fractal triangle turn this notion on its head: Intelligent design, rather than balancing economy, ecology and equity can employ their dynamic interplay to generate value.” [see figure]

William McDonough and Michael Braungart (2002): Design for the Triple Top Line: New Tools for Sustainable Commerce [emphasise and text in brackets added]

This was followed up in 2016 in Michael Braungart’s How to celebrate a positive footprint[17 min, but well worth watching].