The circular economy is a potential new sustainability paradigm; it is a policy approach and business strategy that ultimately aims to promote sustainable consumption and production, and improve resource productivity while reducing environmental impacts (Schröder, Anantharaman, Anggraeni, & Foxon, 2019). Circular economies have systems in place that allow them to achieve a more sustainable economy, including principles and operational visions for the city. The principles and systems put in place focus on changing a city’s linear model into a regenerative and restorative model fuelled by design. The linear model is most easily understood as a global economic system that is based on the linear “take-make-dispose” model, which is hugely wasteful (Ellen MacArthur Foundation, 2015). Some aspects of circular models are achieved by redirecting energy and material flows to be circular rather than linear; using waste to produce inputs, and reducing pollution and greenhouse gasses.

 

To successfully achieve a circular economy, the government must:

• Create a new system of thinking about the economics of the city

• Question our values and approaches to production

• Reorganize our systems of distribution

• Reduce our consumption

• Redirect investment

Circular economies are meant to operate on all aspects of the city and may be considered at multiple scales (Schröder et al., 2019). 

 

Circular economies are designed to provide for human needs and improve the quality of life for residents and visitors, while also reducing social and environmental harm (Schröder et al., 2019). A circular economy is designed to create energy and material loops, preserve products, parts, material, and maximize use (Zink & Geyer, 2017). A circular economy pays significant attention to the to reuse, recycling and recovery, three of the 4R’s (reduction is the fourth, although important in the circular economy, is not the primary concern).

 

“Circular economy is all about a framework for an economy that is restorative and regenerative by design. Unlike in today's linear economy, in a circular economy, we see everything as a resource for something else – waste doesn’t exist. How do business models need to change to suit a circular economy? What does this new way of thinking mean for the business community? How can profitable business models be combined with social and environmental responsibility? How can we design products right from the beginning, and do things even better, instead of just less bad?” (Smart City Sweden, n.d.).

 

To understand circular economies, it is important to understand the different sectors and concepts that contribute to the overall concept. The term circular economy is one that is not strictly defined, as there are many different schools of thought that have evolved over the years. Some people associate circular economies with cradle-to-cradle design, industrial ecology, performance economy, regenerative design, and biomimicry. However, all of these concepts bring us to the root of the idea of circular economies, which was conceived by classical political economists that saw a need for circular processes of production and consumption (Schröder et al., 2019). Ultimately, circular economies are described often as a vision of a re-designed economy, a concept coined by the Ellen MacArthur Foundation in 2010. Circular economies are understood by the foundation as non-linear living systems such as industrial economies which is restorative by design (Schröder et al., 2019). ‘Restorative by design’ can mean that it relies on renewable energies, understands and tries to minimize the use of toxic chemicals, and gets rid of waste through comprehensive design.

 

The circular economy approach often attempts to imitate living systems, which optimize entire systems rather than a system’s components. The main focus for circular economies is often relating to material and energy flows, which is sometimes classified into biological nutrients and technical nutrients. Biological nutrients are used by the biosphere, whereas technical nutrients are used by the technosphere, such as the effects of industrial production (Schröder et al., 2019).  The reason why circular economies have become such a talked-about concept in the past decade is that people are starting to realize that sustainable economic growth is not feasible on this planet which has finite resources and a limited capacity to absorb wastes (Suárez-Eiroa, Fernández, Méndez-Martínez, & Soto-Oñate, 2019). Because of our finite resources, the model of circular economy aims to activate important policy objectives such as creating jobs, reducing environmental impacts (such as carbon emissions), and generating economic growth (Suárez-Eiroa et al., 2019).

 

In the past decade, the concept of the circular economy is becoming more of interest to large companies, and policy-makers, especially in European countries and China. China has been considered a new national development model since 2008, because they have been looking at circular economies and how the concept can help them broaden the legislation about recycling and reusing (Suárez-Eiroa et al., 2019). Experimenting with technological advances, and design and recovery processes has allowed China to create the Circular Economy Promotion Law. A consensus has not been reached on the definite theoretical framework of the concept, or practical strategies of implementation (Suárez-Eiroa et al., 2019). Some find the research content and science behind circular economies to be superficial and unorganized, claiming that it collects vague concepts from many different fields. For the power of circular economies to attract businesses and policy-makers, there needs to be scientific research that highlights the environmental impacts of circular economies (Korhonen, Honkasalo, & Seppälä, 2018).

 

Circular economies are gaining attention and popularity in cities that are trying to become more sustainable. The United Nations made a prediction in 2015 that 66% of the world’s population will live in cities by 2050, causing an increase to the already high percentage of greenhouse gasses that cities produce (Petit-Boix & Leipold, 2018). In response to these trends, global policy-makers have been encouraging the application of new circular systems in cities, however, the actual impact that these new systems will have on the environment is still unknown. Researchers have been trying to understand how cities can become more circular through case study work of circular economy initiatives around the world. Some researchers in particular have been studying urban circularity, by analyzing aspects and indicators such as resource consumption, waste recycling rates, and more (Petit-Boix & Leipold, 2018). 

 

There is significant debate about whether or not circular models actually prevent primary production when considering the closing of material and product loops. It is argued that circular economies tend to have increased amounts of overall production, which ultimately would partially or wholly offset their benefits (Zink & Geyer, 2017). This can be thought about in terms of energy efficiency, where the concept of ‘circular economy rebound’ arises, which explains that circular economy strategies increase the level of production while maintaining lower per-unit-production impacts, which ultimately reduces their benefits. “For instance, material circulation is known to produce a degradation of the material quality and quantity, requiring additional energy and resource inputs that are often disregarded… If [circular economies are] supposed to alleviate the environmental burdens of our current systems, there is a need to make sure that the most environmentally friendly initiatives are realized” (Petit-Boix & Leipold, 2018). There are potential strategies that exist that attempt to avoid circular economy rebound, but researchers have found that these are often found unattractive to for-profit firms (Zink & Geyer, 2017). Researchers have also realized that although implementing circular economy strategies can have many potential benefits, there are also many possible environmental risks.