Can the circular economy design out inequality as well as waste?

Published on 19 March 2018

Image of Patrick Schröder

Patrick Schröder

Research Fellow

The current linear economic system of “take-make-throw away” is known to be the cause of environmental degradation, resource depletion, waste and pollution. Another issue with the current linear economic system is that it has created extreme forms of inequality. The United Nations Industrial Development Organisation (UNIDO) recently pointed out that current circular economy approaches focusing solely on environmental and economic performances risk leaving out an essential third pillar: inclusiveness. There are a number of building blocks for an inclusive circular economy that we need to consider to ensure existing inequalities are reduced, and not exacerbated.

Waste pickers on top of a large waste dump in Brazil, collecting plastic bottles for recycling.

Blind spots in circular economy research and practice

In contrast to the linear economy, the circular economy is a system where resources are kept in use for as long as possible, by repairing, rebuilding or recycling products or materials rather than throwing them away. A recent comprehensive review of the academic literature on the circular economy has pointed out an important research gap: current academic discourses focus primarily on business models, cleaner production approaches and optimising performance and efficiency, but only marginally consider social and institutional implications.

The mainstream industrial circular economy has been critiqued on the grounds that it does not sufficiently consider parallel socio-cultural transformations and the diversity of CE practices, which is required for sustainability transitions. Some initial discussions about the benefits and guiding principles of an inclusive circular economy are beginning to emerge, highlighting the need for a Circular Economy 2.0 that integrates the end of inequality and financial exclusion.

I want to expand on this discussion by laying out six building blocks for the transition to an inclusive circular economy, which can be created through policy interventions, international development cooperation, business models and consumer behaviour change. The suggested building blocks are:

1. Applying circular economy practices as a “toolbox” to help achieve the SDGs

There are many opportunities for the circular economy to contribute to the Sustainable Development Goals, as I have outlined in a recent research paper “The Relevance of Circular Economy Practices to the Sustainable Development Goals”. Whether they are one of the 15-20 million informal waste pickers and recyclers or one of the two billion people who have no basic waste removal services, people in low and middle-income countries are affected everyday by waste. A circular economy that improves the working conditions of waste pickers and provides better waste management services could significantly benefit their health and quality of life. Beyond waste, there are practical circular economy applications for a range of sectors and SDGs including water and sanitation, clean energy, food production and urban development.

2. Use education and training to mitigate impacts on global supply chains

While the circular economy offers real opportunities for developing countries, there is also the real risk that the circular economy and closed loop supply chains could cut poorer countries out of the global supply chains they’ve worked so hard to enter. An example is 3D printing which could make assembly processes in light manufacturing sectors almost entirely obsolete. It could also have extremely disruptive impacts on the textile industries with impacts especially felt by female textile workers. The knowledge and skills required to benefit from the transition to the circular economy can mitigate potential negative impacts and needs to reach people in all countries. Special focus should be placed on educating young people in developing countries, who could potentially miss out on opportunities the circular economy has to offer. This can be partly achieved through Open Source online platforms such as OSCEdays with learning materials, hackathons, courses and manuals. In the context of the Sustainable Development Goals, this will require including circular economy related education programmes in activities under SDG 4 (Quality Education).

3. Ensure the ‘right to repair’

Repair is an important element of the circular economy to prevent waste of resources and re-capture the economic value of products. However, repairing is becoming increasingly difficult and exclusive – monopolised by powerful companies – due to design standards and lack of repairability due to planned obsolescence. Ensuring the “right to repair” of products, especially electronics such as mobile phones, computers and other digital technologies, requiring firms in all industries to provide consumers and independent repair shops with the same service documentation, tools and spare parts that they make available to authorised service providers products, has become a bipartisan issue in the United States. Ensuring the “right to repair” will be an important building block for an inclusive circular economy.

4. Actively involve people as active citizens, not just as consumers

As the circular economy will shift to new business models such as sustainable product service systems (SPPS), and consumers become users, the questions about ownership, consumer rights, data privacy and intellectual property need to be taken seriously. The re-use of products and secondary materials requires new standards and regulation on health, hygiene and safety of products to ensure consumer protection and acceptance. Moreover, an inclusive circular economy will be as much about changing social practices and behaviour, and actively involve citizens as it is about changing products. So far citizens have only marginally been involved in the public conversations and academic discourse on circular economy. What does the transition to a circular economy mean for local communities and how can citizens contribute?

5. Data transparency and consumer protection

As digital technologies, big data, artificial intelligence and blockchain will play a major role in the circular economy, it is important to ensure both transparency and data protection. New digital technologies can provide the relevant data on resources such as water, land, forests, waste, to enable accurate tracking of stocks and flows. To make the circular economy inclusive and provide equal opportunities, it will be necessary to provide open access to these data. Also, industrial symbiosis approaches can only work if stakeholders trust each other and are willing to share data. On the other hand, the increasing amounts of information and data collected by companies about consumers compels new approaches to corporate accountability and the need for public scrutiny on how big data is being used.

6. Move from resource extraction to resource leasing

The so-called ‘resource curse’ has long been an issue in development and many resource-rich developing countries have so far have not benefitted from the linear economy. Could a leasing model of resources and raw materials, similar to corporate leasing models of SPPS which facilitate closed loop value chains, be developed and implemented to ensure that developing countries will have long-term benefits of their resources? An inclusive circular economy would enable resource abundant countries to utilise their natural resources to promote development, retain long-term ownership over them and address issues such as conflict metals and exploitation. The implementation of such a model would require new forms of resource governance which need to be coordinated through intergovernmental cooperation.

Coming back to the initial question, yes, the circular economy can become more inclusive than the linear economy, but this will not happen automatically and requires additional efforts. As we are re-shaping the current economic system to design out waste, let’s also take the opportunity to design out poverty and inequality at the same time.

Photo: Waste pickers in Brazil. Credit: Marcello Casal Jr./Agência Brasil [CC BY 2.5 br ], via Wikimedia Commons


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