Exploratory Study on Circular Economy Approaches A Comparative Analysis of Theory and Practice

2.3 Circular Economy 19

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In the context of ecological economics, two distinct principles were developed and

continue to be developed that exemplify the circular economy: industrial ecology

and lifecycle assessment and extension (Gregson et al. 2015).

Industrial ecology as briefly described in the previous chapter describes the

analogy between material and energy flows in natural ecosystems and argues that

closed-loop systems are required to pursue sustainable development (Frosch and

Gallopoulos 1989). By exchanging by-products and waste from production the ma-

terial loop can be closed and resource efficiency improved. This results in a change

from a linear to a circular economy (Frosch and Gallopoulos 1989).

The concept of lifecycle assessment and extension became more prominent for

researchers in early 1980s. One reason leading to this increased attention is the added

benefit which was seen in the waste reduction as well as reduced expenditures for

production of new products (Bras and McIntosh 1999). The first scholars to conduct

further research into this topic were R. Lund and D. Skeels (Lund and Skeels 1983).

The idea behind this concept is simple: extending a product’s lifetime by repairing

or remanufacturing it (Bras and McIntosh 1999). Hence, lifecycle thinking begins

early in the manufacturing process. It is a crucial element in the design phase to

develop the product in a way that it is repairable and can be remanufactured.

Environmental economists employ, in comparison to ecological economists,

a neoclassical analytical approach to investigate the connection between the so-

cio-economic system and the environment. D.W. Pearce and R.K. Turner advanced

the concept of the circular economy in 1990 in their book “Economics of Natural

Resources and the Environment” (Pearce and Turner 1990). They described the

traditional economy as an open-ended one that treated the environment as a waste

reservoir. Confronted with environmental problems, they concluded that the econ-

omy had to move towards a circular system regarding resource consumption and

waste residuals (Pearce and Turner 1990). The development of the concept of circular

economy has been a critical strategy in China. This has led to the establishment

of principles that aided China’s practice of circular economy and made the rather

vague descriptions from ecological and environmental economics more concrete.

The Chinese approach to implementing the circular economy is commonly

described as the 3 R principle: Reduce, recycle and reuse. Reduction is the leading

principle of the circular economy system (Su et al. 2013). It focuses on reducing

resource consumption and waste produced through increased production efficiency

(Su et al. 2013). The principle of recycling means that potential waste even if it is

biodegradable should be used in other areas of application before putting it into a

landfill. Reusing stands for the lifecycle extension through e.g. reselling of discard-

ed products or using by-products of other firms as input into the manufacturing