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1 Circular Economy Introduction
The circular economy is a new buzzword that has caught the attention of a wide
variety of actors within the public and private sector – particularly in the last 4 years
or so. The circular economy has developed as a result of the contributions from various schools of thought (some inter-related). These include ‘biomimicry’, ‘cradle to
cradle’, ‘industrial ecology’, ‘resource effi ciency’ and the ‘performance economy’
(Masuda 2014 ).
Although defi nitions of circular economy seem to be converging, particularly
towards the defi nition put forward by the Ellen MacArthur Foundation (Ellen
MacArthur Foundation & McKinsey Co. 2014 ), a uniformly accepted defi nition is
yet to be reached. In the past, public and private sector, actors have focused on the
idea of resource effi ciency – doing more with less. Eco-effi ciency measures increase
the ratio of units/value of products and services to environmental impact (positive
or negative). According to the World Business Council for Sustainable Development
(Schmidheiny 1992 ), ‘eco effi ciency is achieved by the delivery of competitively
priced goods and services that satisfy human needs and bring quality of life, while
progressively reducing ecological impacts and resource intensity throughout the life
cycle to a level at least in line with the Earth’s estimated carrying capacity. In short,
it is concerned with creating more value with less impact’.
Potentially the starting point of the concept of circular economy comes from the
1966 paper, ‘The economics of the coming spaceship earth’ (Boulding 1966 ),
which put forward the idea of circular material fl ows as a model for the economy.
Boulding called for the need to consider the earth as a closed economic system
where natural resources are limited. Following this industrial ecology made studies
of the material and energy fl ows in industrial systems, using natural eco-systems as
a guide to create sustainable schemes that operate in accordance with local and
global ecological boundaries (Allenby 2006 ). Cradle to cradle thinking seeks to
make the further distinction from eco-effi ciency to ‘eco-effectiveness’; the creation
of ‘cyclical’ fl ows which allow materials to maintain their quality and status as a
resource (up cycling) instead of minimizing cradle to grave material fl ows
(Braungart et al. 2007 ).
There is some discrepancy between the older version of resource effi ciency and
the newer concept of circular economy. The understanding of resource effi ciency
often precludes the important idea of moving from ‘consumers’ to ‘users’ of durable
goods in the economy. Conversely, circular economy can miss the elements of
‘cleaner production’ or ‘eco-effi ciency’ measures. Currently it appears that the circular economy concept is better defi ned at the higher conceptual level, but not at the
practical, operational level. Circular economy must make the shift from conceptual
ambiguity to operational clarity if it is to be widely and uniformly incorporated by
industry and governments (Masuda 2014 ).
What is clear to Hewlett Packard (HP) is the need to innovate in a resource constrained world. The traditional linear economy of ‘take, make, consume, discard’
will not long be viable where planetary resources are being ‘overshot’ earlier and
K. McIntyre and J.A. Ortiz
1 Circular Economy Introduction
The circular economy is a new buzzword that has caught the attention of a wide
variety of actors within the public and private sector – particularly in the last 4 years
or so. The circular economy has developed as a result of the contributions from various schools of thought (some inter-related). These include ‘biomimicry’, ‘cradle to
cradle’, ‘industrial ecology’, ‘resource effi ciency’ and the ‘performance economy’
(Masuda 2014 ).
Although defi nitions of circular economy seem to be converging, particularly
towards the defi nition put forward by the Ellen MacArthur Foundation (Ellen
MacArthur Foundation & McKinsey Co. 2014 ), a uniformly accepted defi nition is
yet to be reached. In the past, public and private sector, actors have focused on the
idea of resource effi ciency – doing more with less. Eco-effi ciency measures increase
the ratio of units/value of products and services to environmental impact (positive
or negative). According to the World Business Council for Sustainable Development
(Schmidheiny 1992 ), ‘eco effi ciency is achieved by the delivery of competitively
priced goods and services that satisfy human needs and bring quality of life, while
progressively reducing ecological impacts and resource intensity throughout the life
cycle to a level at least in line with the Earth’s estimated carrying capacity. In short,
it is concerned with creating more value with less impact’.
Potentially the starting point of the concept of circular economy comes from the
1966 paper, ‘The economics of the coming spaceship earth’ (Boulding 1966 ),
which put forward the idea of circular material fl ows as a model for the economy.
Boulding called for the need to consider the earth as a closed economic system
where natural resources are limited. Following this industrial ecology made studies
of the material and energy fl ows in industrial systems, using natural eco-systems as
a guide to create sustainable schemes that operate in accordance with local and
global ecological boundaries (Allenby 2006 ). Cradle to cradle thinking seeks to
make the further distinction from eco-effi ciency to ‘eco-effectiveness’; the creation
of ‘cyclical’ fl ows which allow materials to maintain their quality and status as a
resource (up cycling) instead of minimizing cradle to grave material fl ows
(Braungart et al. 2007 ).
There is some discrepancy between the older version of resource effi ciency and
the newer concept of circular economy. The understanding of resource effi ciency
often precludes the important idea of moving from ‘consumers’ to ‘users’ of durable
goods in the economy. Conversely, circular economy can miss the elements of
‘cleaner production’ or ‘eco-effi ciency’ measures. Currently it appears that the circular economy concept is better defi ned at the higher conceptual level, but not at the
practical, operational level. Circular economy must make the shift from conceptual
ambiguity to operational clarity if it is to be widely and uniformly incorporated by
industry and governments (Masuda 2014 ).
What is clear to Hewlett Packard (HP) is the need to innovate in a resource constrained world. The traditional linear economy of ‘take, make, consume, discard’
will not long be viable where planetary resources are being ‘overshot’ earlier and
K. McIntyre and J.A. Ortiz