Coming Full Circle: Why Social and Institutional Dimensions Matter for the Circular Economy

Vincent Moreau,Pascal Van Griethuysen,François Vuille,Marlyne Sahakian

doi:10.1111/jiec.12598

Abstract

SummaryIn light of the environmental consequences of linear production and consumption processes, the circular economy (CE) is gaining momentum as a concept and practice, promoting closed material cycles by focusing on multiple strategies from material recycling to product reuse, as well as rethinking production and consumption chains toward increased resource efficiency. Yet, by considering mainly cost‐effective opportunities within the realm of economic competitiveness, it stops short of grappling with the institutional and social predispositions necessary for societal transitions to a CE. The distinction of noncompetitive and not‐for‐profit activities remains to be addressed, along with other societal questions relating to labor conditions, wealth distribution, and governance systems. In this article, we recall some underlying biophysical aspects to explain the limits to current CE approaches. We examine the CE from a biophysical and social perspective to show that the concept lacks the social and institutional dimensions to address the current material and energy throughput in the economy. We show that reconsidering labor is essential to tackling the large share of dissipated material and energy flows that cannot be recovered economically. Institutional conditions have an essential role to play in setting the rules that differentiate profitable from nonprofitable activities. In this context, the social and solidarity economy, with its focus on equity with respect to labor and governance, provides an instructive and practical example that defies the constraints related to current institutional conditions and economic efficiency. We show how insights from the principles of the social and solidarity economy can contribute to the development of a CE by further defining who bears the costs of economic activities.

Highlights

The concept of the circular economy (CE) has received increasing attention over the last decade as shown by recent reviews (e.g., Ghisellini et al 2016; Sauveet al. 2016)
We argue that the principles and values put forward in the social and solidarity economy may enable the necessary social and institutional conditions to allow for higher material recovery, toward the desired transition illustrated in figure 1
Whereas accounting for social and solidarity economy (SSE) activities differs in varying contexts, the percentage of jobs involved in the SSE has been estimated to approximately 10% both in France and the City of Geneva (INSEE 2013; Dunand 2010; Utting et al 2014)

Summary

In light of the environmental consequences of linear production and consumption processes, the circular economy (CE) is gaining momentum as a concept and practice, promoting closed material cycles by focusing on multiple strategies from material recycling to product reuse, as well as rethinking production and consumption chains toward increased resource efficiency. The distinction of noncompetitive and not-for-profit activities remains to be addressed, along with other societal questions relating to labor conditions, wealth distribution, and governance systems. We examine the CE from a biophysical and social perspective to show that the concept lacks the social and institutional dimensions to address the current material and energy throughput in the economy. Institutional conditions have an essential role to play in setting the rules that differentiate profitable from nonprofitable activities. In this context, the social and solidarity economy, with its focus on equity with respect to labor and governance, provides an instructive and practical example that defies the constraints related to current institutional conditions and economic efficiency. We show how insights from the principles of the social and solidarity economy can contribute to the development of a CE by further defining who bears the costs of economic activities

Introduction

Findings

Conclusions