Encyclopedia
Please note this is a comparison between Version 1 by Lukasz Nazarko and Version 2 by Jason Zhu.
The term circular economy (CE) has existed in the literature since the 1960s. In recent years, it gained significant notability in Europe with the introduction of the circular economy concept into the policy and strategy of the European Union (EU) in 2014 (COM/2014/0398) and the launch of the first Circular Economy Action Plan of the European Commission (COM/2015/0614 Final) in 2015 continued by a new Circular Economy Action Plan: For a cleaner and more competitive Europe (COM(2020)0098). One important step towards CE mainstreaming is the development of suitable indicators that would help measure the state of transition in both absolute and relative/comparative terms. Assessing countries’ performance in achieving the goals of the circular economy is a challenge due to the lack of a generally accepted methodology, the multitude of indicators, and the insufficient data. Countries may be compared in a narrow way, according to single indicators, but a more holistic synthetic assessment of countries is also needed to determine their position against each other.
- Data Envelopment Analysis (DEA)
- circular economy (CE)
- sustainability
1. Introduction
The growing impact of human activities on the environment makes the search for viable modes of sustainable development especially urgent [1]. The term circular economy (CE) has existed in the literature since the 1960s [2]. In recent years, it gained significant notability in Europe with the introduction of the circular economy concept into the policy and strategy of the European Union (EU) in 2014 (COM/2014/0398) [3] and the launch of the first Circular Economy Action Plan of the European Commission (COM/2015/0614 Final) in 2015 [4] continued by a new Circular Economy Action Plan: For a cleaner and more competitive Europe (COM(2020)0098) [5]. The growing interest in CE is also reflected by the rapid increase in the number of scientific aresearchticles and reports [6].
Transition towards the circular economy demands a whole new logic of designing economic processes and running businesses. In the traditional linear model of production and consumption, resources are mined or grown, then transformed into goods which are then used and finally turned into waste (the so called ‘produce-use-dispose’, ‘make-take-dispose’, or ‘take-make-waste’ paradigms). In the circular economy, materials are repeatedly recovered and recycled—they remain in circulation for as long as possible.
Despite a noticeable change in the political discourse, academic discussion, and the public awareness, the current globally dominant economic model essentially remains focused on the efforts to increase consumption constantly, which until now was always related to the increase in production and further depletion of Earth’s resources. Improvement in welfare is typically associated with an increased production and consumption. Especially now, as the world is trying to cope with the economic consequences of the coronavirus pandemic and with the unfolding geopolitical crisis, it is not easy to win the public’s heart by calling for the fundamental rethinking of lifestyles, and for efforts to reconcile profitability with sustainability [7][8][7,8]. As Kirchherr notes, discussions between business practitioners, policy makers, and scholars rest upon the CE’s promise to reconcile sustainability and growth [9]. At the same time, there is no consensus, neither among scholars nor among practitioners, that the CE paradigm guarantees social well-being for this generation and the future ones [10][11][10,11]. The European Union would need to cut off its ideological roots in the trade union for coal and steel and to prioritise long-term environmental sustainability [12].
Even though a completely circular economy is not possible in complex advanced economies [13][14][13,14], some researcheuthors view the CE as the most comprehensive and mature model capable of reconciling economic growth with sustainability and even boost the competitiveness of countries and enterprises by protecting businesses against scarcity of resources [15]. It remains to be seen, however, to what extent the paradigm shift actually occurs. As long as the old linear paradigm shapes the national economic policies (in real terms, not in rhetoric figures), there will be no single country that could come close to the ideal of a truly circular economy. Transition towards a CE must go hand in hand with the shift of the innovation paradigm [16][17][16,17] towards models such as Responsible Research and Innovation [18][19][20][21][22][18,19,20,21,22], Restorative Innovation [23], or Future-Oriented Technology Analysis [24][25][24,25], focusing not only on what is marketable but what is socially desirable and environmentally viable.
A common and widely accepted framework and the standard set of indicators measuring the CE maturity are not established yet. Assessment of the transition towards a CE based on selected indicators is the content of numerous publications that include simple and complex comparisons, qualitative and quantitative evaluation approaches [26]. One of the most exploited methods to assess sustainability, comparing the ability to transform labour, capital, and energy (including from renewable energy sources) and taking into account pollutants (e.g., greenhouse gas emissions) into the GDP, is Data Envelopment Analysis (DEA) [27]. Assessment of the state of development of the circular economy is also carried out using DEA.
