For some, a circular economy is a renaming of some very familiar activities, like recycling, going to zero waste or making something useful from waste. That all seems pretty easy to grasp, and once people realise this must be about closing the loop then they get busy with marketing the new label. Unfortunately this interpretation is incomplete, and misses out on the most powerful aspects of the circular economy and its potential to transform the way our economy works. Here are a few of the most tempting misconceptions to avoid.

Misconception 1: It’s recycling on steroids

The first misconception is that a circular economy is a better form of recycling or waste management. It happens when we focus down or zoom too far into the detail of how a business might ‘go circular’, but let’s face it, would we really need ‘circular economy’ as a term if all we were talking about was just materials recovery?

The circular economy: a dynamic, complex system, it’s full of feedback, exchange, building up and breaking down. Read our recent interview with Ken Webster What is systems thinking? for more on this topic.

In fact, in the revival of the term circular economy around 2009 in the West, even a cursory look reveals an idea based on intellectual streams coalescing around designing effective systems, especially in work from ‘cradle to cradle’, biomimicry, performance economy and natural capitalism. As a result, circular economy is one of those inconvenient big picture ideas: it’s about seeing the way the world really works; it’s a dynamic, complex system, it’s full of feedback, exchange, building up and breaking down. It has stocks and flows of resources that are interdependent. In it materials cycle around while energy flows through and can be lost as heat to space. And of course, it is interesting economically.

Misconception 2: It’s a perfect circle

So if it’s all about systems, why call it circular? Some might say that’s too good to be true, a bit too neat and tidy, or even a bit unsophisticated. How about ‘spiral’, ‘fractal’, ‘non-linear’? This is where the immediacy of the term ‘circular’ wins out. The idea is to suggest that this is not a linear economy. If it’s not take, make, and dispose then the opposite sounds better and is recognisable: we are embedded in cycles. In a crude way, it’s ‘how stuff gets done’ in the biosphere, the atmosphere, from the Earth’s crust to the deep blue oceans.

Even plastic will degrade, eventually. But you’d hardly call it ‘circular’. Materials and products should be designed to fit within the wider system.

If we’re going to get fastidious about terminology, even a linear economy is not entirely or mostly linear, since so much stuff loops back in a chaotic, polluting, badly designed way, eventually. You could even say a linear economy is still ‘circular’, just not as you’d want it, and with significant negative impacts at every stage of the process. So it’s a characterisation: ‘circular’ is a word meant to invoke the notion that by intention and design the feedback loops work to enrich, nourish, and add value. They therefore enable regeneration and restoration instead of lead to degeneration and consumption. It fits the economy to nature, not nature to the economy. The economy works better that way, and for much longer.

Misconception 3: It’s all about closed loops

Like the circular flow of income, a circular economy based ‘closed loop’ alone looks good on paper, but is unrealistic in the real world.

This common misconception of the circular economy as a perfect recycling machine can lead to the image of a closed loop plumbing system, like the circular flow of income and expenditure seen in economic textbooks (but now with widgets rather than income and expenditure). It’s an understandable temptation, but the pipe analogy is faulty. It’s a version of a linear, mechanistic approach. It’s understandable, and it looks ‘circular’ on paper but it’s unrealistic once the boundaries are extended and we appreciate that the economy is embedded in wider systems.

This pipe image assumes tightly controlled closed loops, but such control is something of an illusion in wider, real world systems. It’s a long way from the ideas of Janine Benyus – a significant influence on the circular economy concept – and others who speak of ‘feeding the forest to feed the trees’ of ‘leaky but nutritious’ loops and the notion ‘be generous’, of making everything into food for another part of the system. This way of thinking understands that if the system thrives, so does the individual. It’s about working against big planetary boundaries with an open, systems approach in mind.

One reason for the popularity of this simplistic misconception might be down to the fact that it can be operationalised – a business can get some of their stuff back, chop the materials up and put them to use.  

But even if this interpretation of a circular economy works well with the existing playbook, for the most part it ‘fixes’ resource questions but nothing much else, and leaves the economy suboptimal. The issue deep down lies in trying to fix just one thing, and bringing materials and products into the economic pipework has unintended consequences. If we are charitable this could be seen as a starting point, a way of working out how to make circularity work, but the essential challenge is closed loop vs open loop thinking and that’s pretty fundamental. It’s not transition but transformation which is being attempted.

Misconception 4: It doesn’t account for energy

Where do we get all the energy we’d need to actually power this new system? The aforementioned ‘pipe’ analogy can lead to the criticism of circular economy as a perpetual motion machine which has, like textbook economics, assumed abundant sources of energy and makes impossible assumptions about ‘endless cycles’; about economic growth magicked from within the closed system. This is a common criticism from the side of those who see a declining surplus of energy and with it declining economic growth.

It’s a serious question, and echoing Michael Braungart, possibly one of investing what energy surplus we have now in new infrastructure while we can. However, the idea here is that if we can redesign the system along the lines of a devolved, multi-layered circular economy, this energy question becomes easier to address. Knowledge, digital and other tools, and energy harvesting resources like wind and solar, are becoming cheaper to match needs with opportunities. Building an economy from the bottom up, using what is available as well as recognising the top down brings different questions about how to generate, distribute and use energy. Gunter Pauli, a pioneer in this respect, works around the notion “respond to basic needs of all with what you have, introducing innovations inspired by nature, generating multiple benefits, including jobs and social capital, offering more with less.”

Misconception 4.5: it’ll happen instantly

There was a hint of a half of a misconception about circular economy. It’s the supermarket ‘off the shelf’ fallacy and the illusion of choice. Too much is expected by way of instant gratification. ‘I want a new economy and I want it now – that circular economy didn’t come ready to use so I am hacked off.’ Yeah, right…change takes time. More like evolution than shopping perhaps? We are more participant than consumer in all of this.

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