07 Apr 2017

The Circular Economy

A review of definitions, processes and impacts

Vasileios Rizos / Katja Tuokko / Arno Behrens

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Transforming the linear economy, which has remained the dominant model since the onset of the Industrial Revolution, into a circular one is by no means an easy task. Such a radical change entails a major transformation of our current production and consumption patterns, which in turn will have a significant impact on the economy, the environment and society. Understanding these impacts is crucial for researchers as well as for policy-makers engaged in designing future policies in the field. This requires developing an in-depth knowledge of the concept of the circular economy, its processes and their expected effects on sectors and value chains. This paper reviews the growing literature on the circular economy with the aim of improving our understanding of the concept as well as its various dimensions and expected impacts. On the basis of this review, it attempts to map the processes involved and their application in different sectors. The paper suggests that research on the circular economy is currently fragmented across various disciplines and there are often different perspectives and interpretations of the concept and the related aspects that need to be assessed. This fragmentation is also evident in the available studies that adopt different approaches in calculating the impacts, which makes efforts at comparing the results from different sources very challenging. Finally, this paper suggests that there is limited information on the indirect effects on the economy (e.g. impacts on the value chain or changes in consumption spending patterns) as well as the social impacts of the circular economy transition.

Vasileios Rizos is a Research Fellow in the Energy Climate House at CEPS; Katja Tuokko is a Researcher in the CEPS Energy Climate House and Arno Behrens is Head of Sustainable Resources and Senior Research Fellow at CEPS.

This paper was prepared in the context of the Circular Impacts project, which receives funding from the European Union’s Horizon 2020 Research and Innovation Programme under Grant Agreement No. 730316.