Monday Aug 18, 2025
Monday Aug 18, 2025
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Circular economy is a global movement today. Its success will depend on the acceptance of its core principles
Need for putting resources to the maximum use
The core principle of circular economy underlies the need for putting the scarce and limited resources to the maximum use by people. It requires people to recycle what is being used on one side and establish a production model that would use the output of one economic activity as inputs for another economic activity, on the other. This differs from the existing linear economic model in which resources are converted to outputs for use by people. Once used, they disappear from the system leading to the accumulation of waste-matter in environment. Thus, in the circular system, resources are put to the maximum use before they disappear from the system.
Poverty: driver of recycling
At the individual level, it is driven by a lack of sufficient income to meet ends or conscious efforts to attain the same through cultivated disciplines. In 1950s and 1960s, students coming from low-income families in Sri Lanka were guided by their parents and teachers to use the textbooks carefully, sell to bookstores at half the listed price at the end of the school year and buy the textbooks needed for the next grade at a discount by using the sales proceeds. Thus, used textbooks were eternally recycled till such time they are being prescribed for schools.
Recycling in the Buddha’s time
This is not a new discipline acquired by students in the 20th century. According to a story in the Dhammapadatthakatha, it has happened even at the time of the Buddha in the 6th century BCE.1 The story says that when Elder Ananda, personal aide to the Buddha, and 500 of his supportive bhikkus had been offered expensive silk robes by Samavati, chief consort of King Udena, an issue had arisen whether they had accepted those robes out of greed, a defilement which Buddha’s disciples should have eradicated within them. On inquiry by the king, Elder Ananda had replied that the robes which they had been wearing had been given to other bhikkus whose robes had been partly worn out.
Then, what had they done to the robes which those other Bhikkus had been wearing? They had been given to those bhikkus whose robes had been fully worn out. What had they done to their robes? They had been used as bedsheets. To the bedsheets? They had been used as carpets. To the carpets? They had been converted to doormats. To the doormats? They had been cut into small pieces, mixed with soil, and used to fill the holes in the walls so that during the winter, they had been insulated from the cold air blowing from outside. This is what is known as zero-waste strategy, and it had been cultivated through carefully acquired discipline.
Producing a global public good
But inculcating this discipline at national levels and global levels is far more complex and difficult. Since it produces a common benefit to mankind and all other species, it is equivalent to producing a national or global public good with the participation of all the people in a single country and all countries in the globe. It requires the satisfaction of three Cs, collaboration, commitment, and continuity. Global studies conducted from time to time have warned of its necessity. Individual studies conducted by intellectuals have provided the path to attain it. Global people-based organisations have begun international political action to attain it.
Warning by Club of Rome
A study done by the Club of Rome under the leadership of Dennis L Meadows in 1972 drew the attention of the global community that the economic advancement being undertaken by many nations cannot be continued because of the growing scarcity of non-renewable resources.2 Therefore, there is a limit to presently pursuing exponential growth-that is, continuous growth on growth at a given rate-and once that limit is reached, the modern economies will collapse on themselves. The timeline given by them for the limit to growth to be reached is about 100 years from 1970s implying that the planet will face this problem by about 2070s.3
However, the advancements in science and technology since the release of this report and new discoveries as well as substitutes found for non-renewable resources have put this timeline further forward. It seems that those who occupy this planet have got a brief breathing space. Therefore, the warning given by the Club of Rome is still looming over us and conscious efforts should be made at the individual, family, community, regional, national, and global levels to put the resources to the maximum use before they completely disappear from the system.
North-South dialogue
Another global attempt for using scarce resources economically was made by the Independent Commission on International Development Issues which released its report in 1980 under the title ‘North-South: A Programme for Survival’.4 This commission was chaired by Wily Brandt, an ex-Chancellor of Germany, and served by academic and political leaders drawn from both the rich and the poor countries. The commission in its report drew the attention of the world nations not only to the problem of depleting non-renewable resources but also to the fast disappearance of the renewable resources like ocean resources and fish stocks due to the disruption caused to the biosphere in which such resources were growing.5
Theus, the pursuit of fast economic growth by all nations to provide prosperity to their citizens has overtaxed environment. In the case of deforestation, the commission cited that about 11 million Ha of forest lands-an important renewable resource helping biodiversity as well as human livelihood-are lost every year due to the combined demand for firewood, farmland, and export of forest products by developing countries. Hence, according to the commission, protecting environment is a must.
Our Common Future
Unlike the independent commission headed by Wily Brandt, the United Nations appointed the World Commission on Environment and Development in early 1980s made-up of Gro Harlem Brundtland-an ex-Norwegian Prime Minister-as Chairperson and several other global leaders as members. Its report under the title ‘Our Common Future’ was released in 1987.6 Sustainable development, an important goal of the circular economy, was defined by the Commission as ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’.7 It also focused on productivity in which more should be produced by using less.8 Both these underlie the need for the effective use of resources for meeting the requirements of people without endangering their availability by conserving the available resources and putting them to the maximum use.
Need for balanced development
All these three reports – Limits to Growth, North-South Dialogue, and Our Common Future – were attempts made by the interested parties in 1970s and 1980s to draw the attention of the global community to the need for securing a balanced development without harming environment and the underlying biosphere. Except the UN report, the other two were informal reports for the attention of the global community. But they all highlighted the imminent danger which the world was facing if common action is not taken. Yet, the global community was very slow to respond positively to these calls by global leaders. Therefore, while they provided the materials for the development of the concept now known as the circular economy, they did not directly contribute to it.
Academics into the foray
In the modern era, thinking behind circular economy was influenced by the writings of four academics and it was popularised by one foundation. The academics were Kenneth Boulding who presented the concept of Spaceship Earth,9 Walter Stahel who talked about the performance economy,10 and William McDonough and Michael Braungart who presented the idea of cradle-to-cradle design.11 The foundation that popularised the circular economy was created by Ellen MacArthur and therefore it is known as Ellen MacArthur Foundation.12
Kenneth Boulding’s Spaceship economy
The American economist Kenneth Boulding, around the time the Club of Rome was formed to reassess the resource availability for world nations to pursue exponential economic growth in 1960s, expressed a similar view by making a distinction between what he defined as the cowboy economy and the spaceman economy. A cowboy economy which is being pursued by all the countries in the world is open, exploitative, and linear-i.e., resource use, production, consumption, and waste accumulation taking place without turning back-in its direction. There is no resource limitation for the cowboy who directs the economy. In the gigantic world space, he is a small figure and, therefore, could exploit the available resources to his advantage without facing a limitation problem.
In contrast, a spaceman economy is small, closed, cycle-like and constrained by the resource availability. A spaceman has no choice but to use the available resources frugally and prudently avoiding waste and recycling the waste as well as the output produced within a spaceship. In other words, earth is a single spaceship with no unlimited reservoirs for extraction or dumping of waste-matter to the environment. People should work or operate within a cycle-like ecological system. This requires all to rethink production and consumption to fit the available boundaries on the earth. Regeneration of resources used for production or recycling of the outputs produced through the active participation of people are a must in a spaceman economy.
Therefore, new economic principles should be designed to operate the economy. This philosophical underlining sowed the seeds for the subsequent development of the principles of the circular economy that we know of today. Hence, Boulding was the trailblazer of the circular economy.
Performance economy
The performance economy developed by Walter Stahel, an architect by profession, in 2010 was concerned with the models for using technology and knowledge to improve performance, create jobs, and increase income. It outlined the skills needed to produce and sell performance, manage it over time and the contribution of both manual and skilled jobs to reduce the use of non-renewable resources. Therefore, businesses should sell performance rather than products. In this venture, four key principles should be adhered to. The first is the development of a functional service economy in which businesses provide services like heating or mobility rather than products. Second, they should focus on sufficiency over efficiency. Third, businesses should extend product life through reuse, remanufacturing, and upgrading.
Fourth, producer responsibility is not merely to retain ownership, but to give incentives for durability and efficient use of resources. The success of business should be measured by assessing the value in terms of money per weight, that is, kilogram, of resources used. Manhours should be measured not on the output produced but on the per unit of resources used. It requires more to be produced by using less. The ultimate sustainability impact of the performance economy is the reduction of waste, emission, and resource depletion. These objectives can be attained by moving away from the linear economic model and sticking to a circular economic model.
Product cycles involving cradle to cradle
William McDonough and Michael Braungart revolutionised the way we make things by developing biomimetic design philosophy that fits human activity to Nature’s regenerative cycles. Biomimetic design is an innovative approach drawing inspiration from Nature to solve human design challenges. It involves studying the forms, processes, and ecosystems of Nature to create more efficient, sustainable, and effective solutions for various fields, including architecture, engineering, and product design. Essentially, it is about learning from the “genius” of nature, which has spent billions of years perfecting its designs through evolution. Since nature does not waste anything, it involves getting more without wasting resources.
Thus, McDonough and Braungart contributed to the existing knowledge on the principles of circular economy by proposing eco-effective designs over mere efficiency which should be associated with ‘Cradle-to-Cradle Certified’ product standards. Cradle-to-cradle refers to always having a new life through reuse and recycling rather than the existing cradle-to-death systems in which product cycle ends with waste that will accumulate in environment. In this sense, it is a new corporate social responsibility parameter suggested for businesses.
Marketing of circular economy
These philosophical underpinnings of circular economies were put to practice by the UK based Ellen MacArthur Foundation created by the retired English sailor and charity founder, Ellen MacArthur. Her foundation which dismisses the ‘linear take-make-dispose model’ of production and promotes circularity in production works with governments, businesses, and academia redesign systems of production to ensure sustainability. This was presented by the Foundation in the form of its famous Butterfly Diagram given in Figure I. It promotes a global system of production in which waste and pollution are eliminated, products and materials circulate at their highest value, and Nature is regenerated. This will feed on itself continuously if no disturbance in the form of hostile government policies is made. This diagram has captured all important aspects of the working of a circular economy.
The impact of the Foundation as a thought leader of circular economy is rising every day and it has been able to engage more than 1000 companies globally to its cause and get more than 75 sovereign governments to recognise circular economy as an ingredient in their national roadmaps. It is committed to generating a system of production which will deliver better outcomes for people and the environment.13 However, a single non-governmental organisation cannot attain this goal unless and until the whole global community sees it as its goal and objective too.
Community financing of costs of circular economy
Circular economy is therefore a global movement today. Its success will depend on the acceptance of its core principles by individuals, communities, governments and global organisations. Since it contributes to the global wellbeing, it should be promoted as a global public good to be financed and supplied by the global community.
Footnotes:
1Dhammapadatthakatha, A P Buddhadatta Thero translation, 1952, M D Gunasena & Com, Colombo, p 151.
2Meadows, Dennis L, et al, 1972, The Limits to Growth, The New American Library
3Ibid, p 29
4North-South: A Programme for Survival, 1980, Pan Books, London.
5Ibid, pp 113-4.
6World Commission on Environment and Development, 1987, Our Common Future, Oxford University Press, Oxford.
7Ibid, p 8.
8Ibid, Chapter 8.
9Boulding, Kenneth E, 1965, Earth as a Space Ship, available at http://www.economia.unam.mx/cedrus/descargas/Boulding-EARTH%20AS%20A%20SPACE%20SHIP1965.pdf
10Stahel, Walter R, 2010, The Performance Economy, Palgrave Macmillan, London.
11McDonough, William and Braungart, Michael, 2010, Cradle to Cradle: Remaking the Way We Make Things, Farrar, Straus and Giroux.
12https://www.ellenmacarthurfoundation.org/
13https://www.ellenmacarthurfoundation.org/about-us/what-we-do
Part I can be seen at https://www.ft.lk/columns/Environment-and-how-its-issues-should-be-tackled-through-public-policy/4-779827 and Part II at https://www.ft.lk/w-a-wijewardena-columns/Environment-and-how-its-issues-should-be-tackled-through-public-policy/885-780080
(The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at [email protected].)
