The three elements of a system's change

A circular economy is an economic system of closed loops in which raw materials, components and products lose their value as little as possible, renewable energy sources are used and thiknking over new systems’ design or systems’ redesign/re-definition is at the core.

More than 100 different definitions of circular economy are used in scientific literature and professional journals. The plurality of definitions in use comes as result of the fact that the concept is applied by a diverse group of researchers and professionals (Kirchherr, Reike & Hekkert 2017). A philosopher of science for example, emphasizes a different aspect of the concept than a financial analyst. The diversity of definitions also makes it difficult to render circularity measurable.

Definitions often focus on the use of raw materials or on system change. Definitions that focus on resource use often follow the 3-R approach:

  • Reduce (minimum use of raw materials)

  • Reuse (maximum reuse of products and components)

  • Recycle (high quality reuse of raw materials)

Mobility can serve as a good example. Sharing cars, from entities that would offer such a service to the public, mean that fewer people have to buy their own cars. This reduces the use of raw materials (reduce). If the engine of a car is damaged, it can be repaired or the chassis and interior of the car can be used to make or refurbish another car (reuse). When these parts can no longer be reused, the metal, textile and plastic of the parts can be melted down so that a new car can be made by them (recycling).

According to (Korhonen, Nuur, Feldmann & Birkie, 2018), definitions that focus on system change often emphasize three elements:

  • Closed cycles

  • Renewable energy

  • Systems thinking (re-definition)

Some researchers argue that social inclusiveness is also a necessary part of the circular economy (Korhonen, Honkasalo and Seppälä, 2018).

Closed cycles

In a circular economy, material cycles are closed following the example of an ecosystem. There is no such thing as waste, because every residual stream can be used to make a new product. Toxic substances are eliminated and residual flows are separated into a biological and a technical cycle. Producers take back their products after use and repair them for a new useful life. In this system, it is therefore not only important that materials are recycled properly, but also that products, components and raw materials remain of high quality in these cycles.

Renewable energy

Just like raw materials and products, energy also lasts as long as possible in a circular economy. The circular economic system is fed by renewable energy sources. Because it is not possible to recycle energy, there no reference is made of “energy cycles”, but, instead of “cascade type energy flows”. An example of this is the co-production of heat and power.

Systems thinking (re-definition)

The circular economy does not only require closed material cycles and renewable energy, but also systems thinking. Every actor in the economy (company, person, organism) is connected to other actors. Together, this forms a network in which the actions of one player influence other players. To take this into account, the short and long term consequences must be taken into account in choices, as well as the impact of the entire value chain.