The rebound effect of circular economy: Definitions, mechanisms and a research agenda

Abstract

Circular economy (CE) is an umbrella concept for closing material loops towards enhanced environmental performance. Despite the recognized benefits of CE, the intended outcomes are not always achieved due to the occurrence of rebound effects. The lack of consideration of potential rebound effects triggered by CE is delaying the achievement of CE's full potential. This paper aims to further evolve the concept and mechanisms of circular rebound effects by means of a systematic literature review. In this context, this paper proposes a conceptual framework which brings together the main characteristics and mechanisms (incl. the initiating, developer, and mitigating mechanisms) of a rebound effect in the CE context. The four major lessons learned from research on the circular rebound effect were discussed, including its contextual dependencies, the need for new forms of governance, and how direct effects can overshadow the indirect effects of circularity, indicating a need for early-detection instruments. In addition to proposing six avenues of future research, the research provides clarification and a basis for integrating rebound effect concepts into the CE practice, with important implications for a successful CE transition.