18 2 Theoretical Foundations
(I) Increase the productivity of natural resources, (II) change to biologically
inspired production processes, (III) incorporate a solution-based business model
in which value is delivered instead of a product and (IV) reinvest in natural
capital (Lovins et al. 1999).• ‘Industrial Ecology’ is another concept dealing with material and energy flows in
product development. The systems view which is a key feature of this approach
attempts to understand processes of industrial production and their impact on
the biosphere (Erkman 1997). What distinguishes this concept from the previous
two is that nature is not only the inspiration for the design of the product and
the product lifecycle but also the integration of the production process into the
local environment (Kagawa et al. 2015).• The concept of the ‘Blue Economy’ was introduced by Pauli (2010) in a report
to the Club of Rome in 2010. Pauli chose to use a waterfall as a visual metaphor
to illustrate the flow of nutrients drawn largely by the force of gravity and very
little external energy.In a service economy the consumption pattern changes from buying products to
buying a particular service. The consumer becomes a user, who pays for using a
specific product instead of owning it. The term refers to an economic model where
the importance is placed on services and the majority of jobs are in service activities.
By changing this economic pattern, the service provider not only has an incentive
to cut down the resource expenditure but also to reduce the energy consumption
in the production process (Stahel 1997).
The circular economy contains aspects of all three alternative economic modelsmentioned above. However, the concept distinguishes itself by focusing on the
circularity of resources and the avoidance of waste. The models above have helped
to refine and further develop the concept of circular economy.
2.3.2 Fundamentals of Circular Economy
While the concept circular economy emerged as a political objective only a few
years ago its origins have a longer history. It was formulated during the 1960s by
academic scholars in ecological and environmental economics. Concerns regarding
the limits of growth and resource scarcity, raised by R. Carson and K. Boulding
laid the foundation for the concept of circular economy (Boulding 1966; Carson
1962). Boulding, (1966) in his article titled “The Economics of the Coming Spaceship
Earth” argued that as an answer to the planet’s finite supply of resources, water and
energy, it is crucial for the survival of humankind to re-use and recycle.