The circular economy is not the same as ecological economics

Emil Urhammer

It is our impression that similarities are often made between circular economy and ecological economics. However, this is a mistake as the two are related, but nevertheless very different approaches. In brief, the difference between the two is that circular economy is a strategy for sustainable production and consumption, while ecological economics is a transdiscipinary scientific field. Given this difference, it makes sense to look at circular economy with ecological economic glasses. When this is done, it illustrates that the circular economy is an attempt to keep raw materials in the metabolic organism of the economy for as long as possible before new raw materials are extracted and the old are emitted as waste or are included as components in the biological cycle. In this way, circular economy can be seen as a strategy to limit the size of the economy’s metabolism without reducing the production of goods and services.

Having said that, one may ask what progress has been made with regards to this ambition. How circular is the global economy? A group of researchers consisting of Willi Haas and Fridolin Krausmann, amongst others, have investigated this in an article from 2015. They conclude that we are far from achieving a circular global economy. They find that only six percent of the total amount of raw materials that the global economy uses and processes is recycled, thus contributing to closing the circle. The two biggest challenges in this regard are that: 1) a very large share of the materials that are used in the economy are used for energy production, which means they can no longer be included in the cycle, and: 2) a large share of the materials is trapped in buildings and other infrastructure, which means that it can not be freed for new productive purposes. Therefore, with regards to energy, in order to achieve a circular economy it is important that the transition from fossil to renewable energy sources continues at a high pace. Overcoming the second challenge requires completely new ways of building and producing, where it is easy to dismantle things into their various separate components so that they can be included in new buildings and products.

One can also ask whether the circular economy is a strategy to achieve sustainability in general. In this connection, ecological economists would probably be sceptical. It is a little complicated to explain as it requires knowledge of some of the fundamental laws of physics, but part of the scepticism towards circular economy is that the laws of thermodynamics limit the amount of materials that can be recycled. In this way, some people think that the laws of nature still set limits and that the circular economy is not a recipe for infinite green growth. In line with this, it has also been stated that the circular economy is in no way a guarantee for the conservation of biodiversity and ecosystem services. Materials that are circulating in the cycle also take up space so a growing circular economy would also pose major challenges in terms of the conservation of habitats and ecosystems.