Updated on January 29, 2018
8 Domains of Circularity
There are many sides to the circular economy. Even though many people consider resource usage and economic growth as indicators of the circular economy, there aren’t any generally acknowledged aspects. The various academic papers that discuss indicator systems for example all consider their own specific elements. The choice for them is often unsubstantiated with any reasoning. So the question is whether we can define any general aspects or are they dependent on the context. If so, measuring and comparing circularity between organisation, regions and countries will become rather difficult. Yet I would like to make an attempt.
Domains of Circular Economy
Anyhow, to get the discussion started, let’s create an inventory of aspects or domains of circularity. Which elements are found to be important in literature? Impacts on these domains are, depending on your definition of the Circular Economy, either cause or effect. For example, from a resource scarcity perspective, the resource domain is the cause and financial benefits are an effect. In other cases a new business model is necessary for new financial benefits; that causes a reducition in resource usage and is therefore the effect.
These are the physical resources that are being used for products and services. Because there’s only a limited amount of each raw material available on Earth, one of the main premises is avoiding loss and destruction of materials.
This category considers the energy being used such as electricity, heat and fuels. It is important to distinguish between energy from finite and renewable resources. Especially because energy from finite resources are generally generated through incineration causing a loss of these resources.
Emissions, especially CO2 and CO2-equivalent emissions, are at the top of political and environmental agenda due to the eminent climate change. We want to make climate change occur as slowly as possible such that humans and nature can adapt and protect themselves timely and properly against the consequences.
The ecology is a source from which all raw materials can be mined. A healthy ecological system can generate enough resources to meet our demand. Supply is therefore leading and demand should henced be matched to what can be mined maximally without harming the ecology.
The footprint is a term that often deals with resources (environmental footprint) and emissions (CO2 footprint). However, both footprints are very different in meaning, and it can be argued that the emission footprint is an incorrect term. The footprint is a term that defines the space needed to accommodate some or someone’s effect. In the case of environmental footprint it is the reduced, or affected space because of some industrial or economic activity that was needed to support the regenerative capacity of natural resources. If everyone or any industrial activity would behave the same way, it can be calculated whether the Earth provides enough space to accommodate it, if not, how many extra Earths would we theoretically need?
A CO2 footprint is not about space but measures the amount of emissions exhausted. It does not directly affect the regenerative capacity of the Earth except for indirect effects such as climate change. A volume or weight of CO2 emissions is therefore not a footprint itself. A better measure would be environmental impact.
The economic effect of the circular economy is important for companies to close their business cases. Besides, economic mechanisms are an inherent factor in making a circular economy happen.
The social impact is only sporadically included in the circular economy thinking. Although, it is clear that many new business models, which aim for the circular economy, have a certain social impact: a shift of jobs, more service-based, but also the transition from ownership to usage that causes people to value other things. When aiming for an holistic sustainable circular economy, ecological and economical aspects are equally important as the social aspect.
Knowledge and science is an important domain within the circular economy. Currently learning by doing (design science) is one of the main ways in which circular models, processes and products are created. It is not found to be easy to make the entire leap to a fully circular economy at once. Every step made is one closer to what people aim for, and the knowledge gained from each of these steps is found to be very important. But to keep development going and quicken the transition to a circular society, all knowledge that is developed should be shared with other practitioners. Only that way entire value and supply chains can work together in the same direction.
What about water usage?
A last domain that often is being named is water usage. The use of fresh water is often explicitly measured in discussions on sustainability because alike energy, fresh water is a scarce resource in large parts of the world. A resource that is essential for production of many different products shipped to the West. But it is just as essential for sustaining local ecosystems. By taking water usage separately, our impact in these regions can be made more explicit. However, I would plead to take fresh water usage initially together with the general resource usage because there are many other resources that are essential and scarce. For example phosphates and nitrates. Eventually all materials are scarce on this Earth, some more than others, but in the light of the discussion we can’t keep focussing on all these resources separately. They should all be taken care of.
Depending on your perspective and motives, you goals and therefore KPI’s will differ. With that, measuring circularity, or circular performance, also differs for everyone. From a resource perspective, measuring circularity will be very different from an economic perspective, or if your aim is to include social impact. Because of the many different takes on the circular economy, there is a large variety of indicator sets to be found. The graph below shows which domains are most common within these indicator sets.
Measuring circularity is therefore a complex topic and not always unambiguous. More than enough to write about for a next blog post!