Circular Economy can be implemented by delivering more wealth and prosperity but it can also be achieved driving more inequality and leading to more impoverishment. In a recent post about extensive lead poisoning from battery recycling in India, I wrote that “I do hope that no one considers those practices as part of the Circular Economy discussion, but I am not sure”. I hope the same for the kid that recycles e-waste in this post’s picture. Child labor and slavery for recycling should not be accepted as part of any Circular Economy system. I insist on that, because  the more I discuss and read about circular economy, the more I realize that there is a missing element. Despite the high ambitions and the realistic possibilities for a radical shift, unfortunately, the mainstream thinking about circular economy seems to ignore a well-established fact, that environmental, economic and social problems are interwoven in each and every country, region and community of our world (for those who are not familiar with the concepts, please have a look at the environment – poverty nexus concept and read a representative World Bank paper). As a consequence, each and every intervention in resource management,and especially worldwide interventions related with global supply chains, will result in very specific social and economic impacts. If we want to boost circular economy, we need to dig deeper and discuss more the economic and social impacts.

The economic and social impacts are described in many of the reports related to Circular Economy. As an example, the benefits for EU, according Mc Kinsey, are expected to be almost 2 million new jobs, 2-4% reduction of GHGs and 600 billion euros savings until 2030 (link). But let’s ask some questions. These 2 million new jobs will be part-time activities paid with peanuts or full-time well-paid jobs? These 600 billion euros in savings will make the big and rich bigger and richer or they will provide social benefits for the poorest part of the societies? Is Circular Economy going to create new local supply chains that will provide job opportunities and help communities to manage unemployment? Or it will be realised by corporate robots, as Liam, Apple’s recycling robot?

I strongly believe that Circular Economy, as part of the Fourth Industrial Revolution, represents a huge opportunity for our world. For the first time in human history technology and wealth accumulation are capable to deliver abundance in scarce resources. As Peter Diamantis has said “When I think about creating abundance, it’s not about creating a life of luxury for everybody on this planet; it’s about creating a life of possibility. It is about taking that which was scarce and making it abundant.”  But, as I have written and said many times, this opportunity for abundance is framed by the dominant social paradigm. So, allow me to put some more questions that are not discussed.

But let’s see the reality. The discussion on Circular Economy is stimulated by the big multinational companies that have already developed global supply chains, in one or another way. They have the power, the know-how and the economic interest to control (at least some of) the crucial resources globally and they will do it in their own way. So, will the Circular Economy be utilized as one more brick in the new Iron Curtain of global privatization that restricts access to crucial resources ? Will the countries, especially the poorer ones, keep control of their crucial resources and ensure that citizens will have access to them? Is Circular Economy going to help us to respect the planetary limits or it will be another “green-washing” tool as the Volkswagen case demonstrated?

The new business model of sharing instead of owning goods, or the so-called “Sharing Economy”, is another breakthrough related to Circular Economy. Obviously, there are substantial environmental benefits when you share a car, but, finally, the owner that provides the specific service has full control of your mobility and, in case of monopolies, the owner can terminate the service whenever required according the owner’s interest. How we will ensure that everyone will have access in these services and that they will be affordable? How we will frame the sharing economy with a proper legal framework to avoid overexploitation of the individual, decentralised  labor force, as the recent strike of Uber drivers showed?

What exactly will be the role of Civil Society in the road towards Circular Economy? Is it going to be an active stakeholder as the final beneficiary or simply a consumer of “Big Ideas for Big Money”? Will the Circular Economy be shaped increasing the cohesion and the inclusivity of our societies or it will create more fragmented and polarized continents, regions, cities and neighbourhoods?

Will Circular Economy be implemented reducing the extreme inequality or increasing it? Will it result in a more balanced and better society, where democracy and human rights, especially the ones of the poorest part, will be fully respected or in an economic dictatorship of the ones that will control the crucial resources?

Circular Economy should be an integral part of the efforts to reduce and terminate extreme poverty. However, if people will continue to to be an externality, as it seems now,  Circular Economy will increase marginalization phenomena in a global, regional and local level.

Alexander Lemille, a Valued Circular Economy expert, in his excellent article “Circular Economy 2.0” , has written “…we might have to think beyond just a circular economy as it is designed today: with the same corporate powerful actors, in the same financial paradigm, replicating current human interactions and power relation. In a sea of challenges, building a circular economy with “profit maximization” as – again – the same narrow-minded corporate objective and, without putting the people at its core first, might not deliver the intended gigantesque intentions that we say it will have on our planet.”

Once more, it’s about People, not Waste

1 Comment
  1. Great article. Obviously, as the boy in the pic tells us, exploitive CE is not really CE. The bigger question is about strategy. How to shift one paradigm (resource flows) when there are other interlocked paradigm shifts that remain neglected? One part of the answer, as you suggest, is to guide CE in ways that enable rather than obstruct the other shifts. A good start with this is for CE professionals to stop defining CE in terms of buying services (with resource owners retaining ownership). The other part of the answer is to recognise and advance all the other paradigm shifts, rather than hoping CE will be the heroic saviour of everything. This research for nato is an overview of the apparent range of paradigms and how to shift them. CE is number 3 of 7.

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