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

20 2 Theoretical Foundations

process. Furthermore, products shall be used to their maximum capability, e.g.

through regular and professional maintenance (Naustdalslid 2014; Yong 2007).

In China the circular economy is implemented in of a three-layer approach

as described in chapter 2.3.6. The layers are: (I) corporate (micro), (II) inter-firm

(meso), and (III) societal (macro) level (Geng and Doberstein 2008). On a corporate

level (I), organizations are encouraged to develop environmental friendly products

and implement technologies for cleaner production. On the inter-firm-level (II),

organizations aim to develop networks so that they can benefit e.g. through ex-

change of by-products, recycling of wastes, sharing of infrastructure and energy

cascading (Yuan et al. 2006). Consequently, these two levels tend to concentrate

mainly on the production side while the societal level (III) includes both production

and consumption activities as key elements. This level describes cities or municipal

areas in which recycling and other eco-friendly processes are promoted through

economic and administrative incentives (Mathews and Tan 2011).

In September 2010 the Ellen MacArthur Foundation was launched with the

objective of spreading the idea of the circular economy as well as to promote a tran-

sition to this type of economy. The Ellen MacArthur Foundation released reports

examining the potential of circular economy and initiated the ‘Circular Economy

100’, a platform for leading companies and innovators from regions around the

world to exchange ideas as well as best practices. Today the foundation is viewed

as a thought leader in the circular economy environment. Hence the definition

of circular economy according to the foundation plays an important role when

attempting to gain a deeper understanding of the concept.

The Ellen MacArthur Foundation bases its definition of circular economy on

five characteristics:

1. Design out waste,


2. Build resilience trough diversity,


3. Work towards using energy from renewable resources,


4. Think in systems, and


5. Think in cascades.

In the following paragraph a comprehensive overview of the five characteristics

whilst also outlining how they differentiate from one another is provided.

1. In their definition of the circular economy the Ellen MacArthur Foundation

differentiates between two product types: consumables and durables. This means

products are either designed in a way that at the end of their lifecycle they return

into the technical (durables) or into the biological cycle (consumables). The