Circular economy

CHAPTER TWO

Circular economy: here and now 2.1 Introduction The current fossil-based linear economic (LE) model is largely based on mass production and consumption patterns, briefly and justly summarized by “take-make-use-dispose” label. After many decades of application on a global scale, LE revealed its serious conceptual and structural limitations, and thus was evidenced by economists, ecologists and other scientists to be an unsustainable paradigm that needs to be quickly and attentively replaced [1e3]. The main challenge in this transition phase is the necessity for the alternative CE model to design and execute sustainable productionconsumption systems, equally effective as the linear systems, while gradually remediating the heavy legacy of the LE, especially in the environmental and societal sectors. Such a goal is indeed very challenging, but it is believed to be the only foreseeable scenario to ensure the global implementation of a genuinely sustainable economic model. Experts from around the world have been raising their voices to alert decision makers, industrialists, and the general public about the obvious issues with LE, related to the wasteful management of valuable resources (mostly fossil) and the continuous pressure on those raw materials from highly effective industrial complexes and an increasing world population. Such pressures are further accentuated by polluting activities during the extraction/cultivation of raw materials and/or the industrial processing, utilization, and disposal of products [4e6]. In short, LE is governed by the destructive principle of producing more products from cheaply available resources, and with short lifespans (to produce even more). This was (or still, to be accurate) a highly effective approach to produce and use/consume commodities, where the fate of products after their “useful life” is neglected, to say the least, as most items are either landfilled or incinerated [7]. Even, modern waste management schemes aiming at producing heat and electricity from incineration, and biogas and compost in landfills [8], are conceptually linked to the linear model as they tend to “encourage” the generation of wastes and not to The Circular Economy ISBN: 978-0-12-815267-6 https://doi.org/10.1016/B978-0-12-815267-6.00002-5

© 2019 Elsevier Inc. All rights reserved.

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reduce it in the first place. Besides, such tentative valorizations, although reducing the amount of wastes to be disposed, are also reducing the embedded value of many wastes (“wasted” resources to be correct) [9], which is in direct opposition with the CE principle of increasing value and reducing waste [10,11]. Thus, despite numerous scientific and technological breakthroughs in the linear economy model, enabling the production of more food, more clothes, and more cars, the price paid (and to be paid by future generations) is already too high. This includes the loss of valuable and scarce resources, release of harmful emissions, and the generation of amounts of waste through the entire supply and value chains [12e14]. Considering the urgency and seriousness of this matter, to explain why CE is needed now, the environmental, societal, and geopolitical legacy of the linear economic model is briefly described in the following section.

2.2 Why now? The linear economy concept, and throughout decades of unsustainable mass production/mass consumption schemes and reckless resources/ wastes management strategies (with some expectations of course), helped in producing more food and goods (although not equally distributed) and did generate economic growth. But, it also led to the formation and accentuation of various environmental, societal, and geopolitical issues.

2.2.1 Environmental issues One of the main traits of LE is the reliance on fossil resources as feedstock and/or energy input for many key industrial sectors worldwide. This includes the extensive use of fossil fuels to produce transportation fuels, electricity, chemicals, materials, and many other commodities [15], and the reliance on mined resources such as phosphate rocks to produce fertilizers for the agricultural sector [16]. The involved extraction and refining processes, involving both fossil resources, was proved by scientists to have a long-term harmful impact on the environment, and in some cases leading to the irreversible deterioration of exposed ecosystems [17,18]. The global environmental situation became so alarming that scientists from around the world, led by Johan Rockstr€ om from the Stockholm Resilience Center, deemed it timely and necessary to exploring the safe operating space for Humanity by proposing the concept of “Planetary Boundaries” [19].

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Considering the wide range of products and industrial activities conducted according to the LE concept, we will focus on the two key sectors of coal mining and petroleum industry, along with the related refining, utilization, and waste disposal patterns, to illustrate their negative impacts on the environment, exclusively based on published scientific results, and data for international authoritative sources. 2.2.1.1 Soil degradation and water pollution ➢ Coal mining activities around the world did make a substantial contribution to the national economic growth of many countries, most notably China, where coal is the principal primary energy source [20]. Nonetheless, many studies reported the damaging impact of coal mining on the environment, especially the contamination of surface and ground waters during the extraction stage or through the surface disposal of waste rock, due to solubilization and release of inorganic contaminants, including toxic heavy metals [21]. Acid mine drainage, radically altering the properties of exposed surface and ground waters was also closely monitored [22]. The environmental situation in and around coal mines was more pronounced because of the expensive costs related to the implementation of reclamation, mitigation, and monitoring activities of improperly controlled and abandoned mining sites [23]. The issue with coal mining continues even after the exploitation of this fossil resource. Indeed, after the coal is mined, the mining companies are required to “restore” the ecological functions to the post-mining landscape [24]. The widely applied soil reconstruction scheme involve reallocating of the original soil layers over the craters, stabilizing of the soil chemical properties and reestablishing the vegetation. The issue with such a plan is the high levels of acidification in those reconstructed soil due to the presence of pyrite (FeS2) which is easily oxidized into sulfuric acid (H2SO4) in the presence of water or air [25]. Other serious environmental problems, including the loss of soil structure, decrease of organic matter, low rate of water infiltration, and soil erosion, were also reported [26,27]. The same environmental issues of soil and water contamination were also extensively reported for minerals extraction, which, according to many scientists, did inflict serious environmental damage mainly through heavy metal pollution [28e30].

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➢ Petroleum: There are two possible soil and groundwater contamination routes by petroleum and derived petrochemical products. The first scenario is the most spectacular one caused by spills and leaks from petroleum wells, pipelines, and underground storage tanks [31]. The latest infamous accident is BP’s Deepwater Horizon oil spill in the Gulf of Mexico, with an estimated leak of 4.9 million barrels [32] and a heavy impact on the marine and coastal environments, and the fishing industry in the affected area [33]. The second scenario, and by far the most damaging one, is the contamination occurring in municipal landfills and industrial waste disposal sites, then propagating horizontally and vertically, to further contaminate surface and ground water, particularly, if the aquifer is shallow and not naturally sealed with a layer of low permeability material such as clay. Either way, the release of toxic and/or persistent petrochemical compounds into the environment can damage large terrains, thus altering the chemical properties and fertility of soils and making them unfit for agricultural activities [34]. Contaminating water sources, on the other hand, makes them undrinkable and could cause serious and widely spread health problems to exposed living organisms [35]. Besides, the treatment of soils and groundwater contaminated by petroleum or its derivates is an expensive and highly challenging endeavor because related remediation actions need to be taken quickly and efficiently to avoid the migration of toxic hydrocarbons and the pollution of larger areas. Another major source of soil and water contamination is the intensive and extended use of petrochemical compounds in the agricultural sector, especially chemical fertilizers, pesticides, and herbicides [36,37]. 2.2.1.2 Air pollution ➢ Coal: several environmental issues were reported in the coal sector, involving the strategic industrial activities of mining and energy production. The coal-related environmental problems affecting the air quality are mainly occurring during the extraction of this fossil resource (drilling and blasting), its conditioning (crushing to the desired size), handling (loading and unloading), transportation, and combustion [38]. The combustion of coal processing wastes is also an important source for air pollution [39]. The various pollution routes in the conventional, and linear, coal supply chain (from mines to power plants) includes the fugitive emissions of gas

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from mining via ventilation air which contribute toward the global greenhouse gas (GHG) inventory [40]. In this concept, the problem of the methane fraction in those emissions is twofold, first, because methane is a potent greenhouse gas, and second, because of the lost business opportunity to valorize such a valuable side stream [41]. Along with well-known carbon dioxide (CO2) gas, coal combustion processes also emit toxic gases such as sulfur dioxide (SO2), a major contributor to acid rain, and nitrogen oxides (NOx), active contributors in photochemical smog and acid rain [42]. Other serious air pollution scenarios from coal combustion include the emissions of toxic heavy metals [43], and fine, ultrafine, and nano-sized particulate matter, easily accessible to the lungs, which leads to serious health complications, especially if enriched with heavy metals [44,45]. In order to accurately assess and predict the extent of the menace posed by linear-based industrial activities involving fossil coal, Fig. 2.1 illustrates the global map of coal-fired plants, and highlight the alarming 100% amplification of CO2 emissions between 1973 and 2014, and the fact that around 46% of the overall emissions of CO2 is from coal combustion. ➢ Petroleum: From the extraction of petroleum, its refining, the utilization of its various products, and to the disposal of its related wastes, several toxic gases are contaminating the air. The petrochemical and other industries, transportation, and agricultural sectors are significantly contributing to the global degradation of air quality, through the toxic emissions

Figure 2.1 Global map of coal-fired plants and installed capacity of selected countries [39].

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and/or greenhouse gases into the atmosphere [46e48]. The U.S. Environmental Protection Agency (EPA) established the National Ambient Air Quality Standards (NAAQS) in order to normalize the assessment of air quality. The six “criteria air pollutants” include ground-level ozone (O3), particulate matter (dust, dirt, soot, or smoke), carbon monoxide (CO), lead, SO2, and NOx [49]. Contamination scenarios include the release of SO2 in the petroleum refining emissions, which reacts (along with NOx) with the water molecules in the atmosphere to form acid rain, which could be harmful to living organisms, and corrosive to buildings and other infrastructure [50]. The incomplete combustion of petroleum is also responsible for emitting a mixture of toxic gases (CO, CO2, NOx .), as well as fine particulate matter. These fine particles are also continuously being emitted by vehicle exhausts, along with other gases [51]. In the fuel transportation sector, the use of lead as an additive to gasoline to boost the octane ratings, contributed in increasing the lead levels in the atmosphere, and links between this pollution case and child health issues were reported [52]. Furthermore, several scientific studies reported that many hazardous compounds in petroleum and its derived products are suspected of inducing severe health problems in case of acute exposure (concentration wise) or for long periods of time. These health issues include increased respiratory complications (decreased lung function, aggravated asthma, development of chronic bronchitis from the inhalation of SO2, NOx or fine particulate matter), and serious effects on the functions of vital organs (heart and the brain), and on maternal and perinatal health (increased risk of preterm delivery) [53e55]. 2.2.1.3 Global warming and climate change ➢ Coal: Notwithstanding the objectives stated in international treaties such as the Kyoto Protocol, and despite the declared goals made by numerous industrialized countries and international bodies such as the United Nations Framework Convention on Climate Change (UNFCCC) to reduce the anthropogenic emissions of GHGs, and to prevent dangerous impacts on the climate system [56], the global reliance on fossil coal substantially increased. The situation was too paradoxical to many scientists and experts that this global trend was labeled as the “renaissance of coal.” Key factors leading to this odd phenomenon are the fact that coal is the

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most carbon-intensive fossil fuel, and that its reserves are by far the leastused, in comparison with petroleum and natural gas [57,58]. The issue is being further aggravated by the large scale utilization of coal to fulfill the energy demand of developing and newly industrializing countries, thus repeating the same mistake of “fueling” economic growth using fossil resources. Overall, from these alarming assessments, another serious issue needs to be highlighted, which is the fracture between the scientific and the industrial world when it comes to fossil fuels. In this context, the fifth assessment report, published in 2014 by the Intergovernmental Panel on Climate Change (IPCC) recommended the replacement of coalfired power plants by less carbon-intensive energy technologies in order to reduce global emissions [59]. An article published in Nature in 2015, recommended that more than 80% of current coal reserves should remain unused between 2010 and 2050 in order to meet the target of 2 C (the average global temperature rise caused by GHG emissions) [60]. Despite these and many other recommendations from scientists to reverse course and start relying on renewable energy sources, the balance of power is still heavily tilted toward fossil fuels, and for decades to come. If petroleum is expected to be depleted in 30e40 years, fossil coal will still be available until 2112 [61]. ➢ Petroleum: Based on the assessments made by the scientists of the IPCC, the increase in anthropogenic greenhouse gas emissions is causing global warming. This includes a “cocktail” of GHGs gases such as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), along with perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), and chlorofluorocarbons (CFCs). IPCC experts also proved that the total annual GHG emissions from anthropogenic activities have continued to increase from 1970 to 2010, with larger absolute increases between 2000 and 2010 [62]. Over the course of the previous 50 years or so, fossil fuels used in the transportation sector, along with coal used in power plants, have been the primary causes of global warming as the principal sources of CO2 emissions [60,63]. In this regard, it was reported that around 26% of the global emissions of CO2 are coming from vehicle exhausts [64]. Furthermore, methane, a GHG 21 times more potent than CO2 [65], could be generated by the petroleum industry (extraction,

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transportation, refining, and storage) as fugitive emissions [66], although usually associated with natural gas. Global warming and climate change are still subjects of debates even among scientists, with conflicting assessments; either way, severe climatic fluctuations, and extreme events are already witnessed by most residents on this planet. Indeed, storms are becoming stronger, heat waves more intense and droughts more severe [67]. Ice caps are melting, oceans and sea levels are rising, threatening the ecological equilibrium of many marine ecosystems mainly through the contamination of groundwater supplies in coastal aquifers, which could endanger human populations living near the coasts, and especially in islands [68]. Thus, keeping business “linear” as usual is not an option anymore, and replacing the current economic model, heavily relying on fossil resources, unsustainable management schemes and highly polluting and wastegenerating production procedures (and irresponsible consumption behavior and waste disposal), is obviously an urgent necessity that need to be dealt with without further ado.

2.2.2 Societal and geopolitical issues In this section, the focus will also be on the coal mining and petroleum industry, to have a brief but highly representative assessment of the various societal and geopolitical impacts of those strategic industrial sectors in the current LE concept. 2.2.2.1 Issues with the coal sector In the coal industry, mining activities are often reported to be the leading industry causing fatal injuries, either due to disastrous collapsing or explosion accidents or following chronic respiratory complications [43,69]. Furthermore, the communities living nearby coal mines are also adversely affected by toxic emissions and the mining operations including blasting, the collapse of abandoned mines, and the dispersal of dust from coal trucks [70]. Many reports showed that coal mining has a consistent inverse association with socioeconomic indicators related to population growth, local labor markets, entrepreneurship, which pose a real threat to future economic growth [71,72]. Overall, the scientific literature addressing the impacts of the coal sector (mining industry and coal combustion) is clearly divided. In many studies, the focus is on the economic and societal benefits of this sector, while ignoring the negative long-term consequences. Most of these studies are

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mining industry-sponsored reports. Few exceptions do exist such as the research study funded by a mining company in central Queensland (Australia) to assess the social impacts of its mining activities in the Coppabella coal mine between 2002 and 2007 [73]. Several issues comprising demographic changes, housing and accommodation, social integration, traffic and fatigue, business opportunities and constraints, cultural heritage, and opportunities for indigenous people were investigated. The conclusions reached by the Australian researchers and other scientists, which are also valid for other mining industries around the world, include the failure by the mining companies and the involved communities to capture positive benefits (mainly economic development) and increased dependence on mining for local employment and income. Over time, the problems generated a new set of acute issues such as [73,74]: - lack of skilled labor in other industries. - reduced availability and affordability of accommodations. - increased traffic and fatigue-related road accidents. - increased pressure on emergency services. - increases in criminal and other antisocial behavior, and - Undermined communities’ institutional power. After decades of assessment studies conducted in various mining sites around the world, many research-related studies focusing on the environmental impacts, and to a lesser extent the societal factor, agreed that the exclusively economic short-term gains from the mining activities (if any in despotic countries) are quickly dissipated by the immediately following severe, expensive, and long-lasting repercussions on the economic, environmental, and social fronts. Such fate is typical of most industrial activities implemented according to the linear economy model. In a 2004 article, insightfully entitled “The Political Economy of Coal Mine Disasters in China: Your Rice Bowl or Your Life” [75], the author gives a valid condition to overcome or mitigate the coal-related issues, which is increasing family incomes in rural regions so that they have the “option to refuse to risk their lives.” Within a global perspective, this recommendation could be converted into creating local opportunities for increased, and more importantly, sustained incomes for families from profitable, eco-friendly, and socially beneficial industrial activities. We shall develop this point in the next Section 2.3, and throughout this book, to show and prove how CE could meet such global challenges.

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2.2.2.2 Issues with the petroleum sector The current linear and market-based economic model is heavily relying on fossil fuels (petroleum, gas, and coal) to, supposedly, bring prosperity and welfare. For the few countries, most notably Norway [76], it did so by escaping the “resource curse” (slow or reverse growth) and the “Dutch disease” (significant contraction of the traded goods sector). But, for most of the rest, it triggered geopolitical tensions and even wars, incited social injustice, provoked famine, and caused environmental disasters [15]. One of the key issues reinforcing the seriousness of the impact of petroleum on economies and societies is its price volatility. Indeed, many studies proved that oil price volatility could have profound impacts by influencing strategic investment decisions [77] and even affect nonenergy commodity markets [78]. In this context, various analytical tools were applied to investigate the fluctuation patterns of oil price, while considering the involved geopolitical, societal, and economic connections [79]. Another major issue related to the petroleum sector, and many other valuable resources, is corruption. Over the last couple of decades, transparency and corruption monitoring have become key topics in the global development agenda, especially with respect to the management of natural resource wealth in the resource-rich, but still developing countries. Although these strategic and highly sought resources were believed to have solid and inherent potential to lift those countries to the rank of developed ones, nonetheless many of those countries showed quite the opposite trend with slow or stagnating economic growth (compared to developed countries with limited resources), along with poor performance against human development indicators, and economic and social instability frequently leading to violent and even armed conflicts [80]. A quick look at Transparency International’s corruption perceptions index of 2017 [81] unequivocally shows that many developed countries with limited resources are ranking high on the list (e.g., Denmark second, Finland and Switzerland third, and Singapore sixth), while resource-rich countries are plagued with corruption and mismanagement including Nigeria (148th), Uganda (151th), Angola (167th), Iraq and Venezuela (169th) and Libya (171th). The same list also shows why Norway, an oil-rich country ranking third in this transparency list, was successful in handling its petroleum bonanza through a zero-tolerance policy to corruption and vast savings in a sovereign wealth fund [82]. The latest strange case of “resource curse” is oil-rich South Sudan, where the latest reports are sadly warning against another famine in the country,

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and ironically predicting a fuel shortage crisis [83,84]. In general, corruption cases in resource-rich countries takes two main schemes: rent-seeking and patronage [85]. In the former, huge resource rents make rent-seeking an “easy” and highly profitable strategy for the involved parties (sometimes only the despot and his family). In the second scheme, part of the huge revenues for resources are used to prompt political patronage as the ruling body (despot or unique party) pays off supporters to remain in power and to intimate or prosecute the opposition, which results in reduced accountability, systemic corruption, and mismanagement with the public funds [86]. This “resource curse” phenomenon and its links with corruption were heavily debated, and many opinions and arguments were proposed including a continuation of the colonial era objectives and practices, and even the predisposition of certain cultures to corruption, clientelism, favoritism for family members, etc. [87,88]. In the petroleum-based linear economy, markets are flooded with numerous affordable commodities from plastic items, heating fuels, paints, and pesticides, to clothes, footwear, shampoos, detergents, and many other cheap, but unsustainably produced, petrochemical commodities. This mass production strategy, typical of the LE concept, not only dissipated valuable raw resources, generated enormous amounts of wastes, and caused serious pollution problems, but also conditioned and fostered people to the culture/ideology of mass consumerism [89], through appealing (sometimes deceptive) marketing and advertising strategies. New waves of ethical, responsible and engaged consumption approaches were developed and promoted, respectively, including ethically green and political consumerisms [90,91], to counter this selfish and “enforced” behavior,. At the end of this section, including a brief account on the environmental, societal, and geopolitical issues related to the linear fossil-based economic model, it is clear that accomplishing global SDGs with this linear concept is mission impossible, and that there is an urgent need to replace it, first to avoid further harm to us, the environment and the next generations, and to benefit for this “transition phase” to implement a sustainable economic model for long times ahead. In this context, and based on the analyses of an extensive array of economic indicators conducted by many scientists around the world, it was confirmed that the extraction of fossil resources, and the related linear-based production and consumption patterns, although generating a short-term economic boom, are in most cases responsible for hampering long-term economic growth [92,93].

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For instance, it was reported that the 1980s energy boom in the U.S. West (from petroleum and natural gas), enabling a strong short-term positive impact on employment and income, had negative long-term effects on income growth and other indicators of social welfare, such as increased crime level and decreased educational attainment [94]. For many decades, the main question regarding this serious global challenge was: where is the way out? Circular economy, although a still maturing concept as we shall see in Section 2.4 of this chapter, is already showing the road toward a sustainable and thriving future, and is candidly and confidently telling us to “take the high road and enjoy the journey,” a journey that needs to be started now and from everywhere.

2.3 Circular economy: here and there 2.3.1 Here, local CE The economic benefits from the local implementation of the CE principles are evident. Indeed, in most cases, locally sourced raw materials are cheaper than exported ones and less prone to volatility problems, which helps in shortening the supply chains, increasing the profitability and further securing the entire value chain of industrial, agricultural, or any other profitgenerating activity adopting the CE concept. As well, locally managed reverse logistics are also susceptible to increasing profits via operating more fluent and much less destructive recovery and recycling schemes of resources or materials. Along with the economic advantages, locally implementing CE was also reported to have interesting and long-term social and environmental benefits. Before detailing those aspects, the local dimension (CE here) needs to be specified. Considering the various administrative divisions in countries, we mean by “local” any national government entity including common names such as city, town, province, region, district, county, prefecture, department, municipality, etc. By extrapolation, the global dimension (CE there) involved international relationships and multinational corporation schemes. 2.3.1.1 Locally sourced raw materials Raw materials, locally extracted, cultivated, or harvested are able to induce substantial cost reductions in the production process with direct support to regional economies. Along with the obvious benefits from the reduction of shipping costs for transportation and handling, and the linked emissions,

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sourcing raw materials locally, is a strategic decision for countries and companies alike. For instance, importing valuable resources from conflict zones, although from a short-sighted economic outlook, considered as a “cost-effective raw material sourcing,” is widely being condemned as unethical behavior [95], with severe global repercussions including aggravating the violence and instability in those resource-rich authoritarian countries, either in the form of civil war or foreign occupation [96,97]. Past and current related cases in Africa, the Middle East, Asia, and South America are too well known to be reiterated. On the other hand, countries or companies economically affected by this unethical competitive edge might be “tempted” to do the same if no regulating penalties are enforced on transgressors. In the geopolitical arena, this issue is much more complicated since, in practice, the “balance of power” amid countries or corporations (and sometimes between countries and corporations) is the main driving force for “regulation,” with the outcome frequently favoring the most powerful entity. Local sourcing, along with other cost-innovative strategies, such as low labor costs and standardized components, were proven to be highly profitable endeavors, most notably in the emerging market firms based in China and India. Indeed, these firms gained highly competitive advantages through their ability to substantially reduce the procurement and production costs by locally implementing innovative and disruptive business models [98]. In this context, “good-enough innovation” is a new approach to development aimed at providing solutions to a range of resource constraints beyond capital limitations. Like in cost innovations, and through various disruptive technological innovations and business models (especially companies aiming at “capturing” new markets), the objective of achieving low price points needs to include the favorable aspects related to improved local sourcing conditions [99]. In Africa, the issue of local sourcing is of strategic significance and a key enabling factor for the implementation of the CE concept, continent-wise. This issue will be further developed in Chapter 5, but the conclusions from some research investigations conducted in resources-rich Nigeria briefly, but insightfully, illustrate the importance of this matter. In these studies, focusing on the iron, steel, petroleum, and natural gas industries, the authors reached the fact that a direct link exists between harnessing local raw materials and the economic development of the country. In addition, supporting the R&D effort targeting these strategic sectors was deemed necessary to

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promote the local extraction and transformation of resources, and limit the drawbacks-related importation. The need for effective and well-targeted legislations and policies to promote the local harnessing of raw materials and the development or enhancement of indigenous technologies was also stressed upon [100,101]. Overall, several advantageous features are related to local sourcing. Nonetheless, such strategic procurement decision could face some challenges when applied on the ground. In this regard, the UK-based Chartered Institute of Procurement & Supply (CIPS) reported some of those benefits and limitations associated with local sourcing, in comparison with global procurement schemes [102]: - Benefits: • Easier and cheaper logistics to suppliers for development, management, and periodic site inspections. • Shorter supply chains and reduced associated risks, and thus lower procurement costs and more predictability of delivery times. • Good for public relations since related investments will be highly visible for the local community. - Limitations: • Possible resistance to change, especially if the long-term benefits from local sourcing are overshadowed by the short-term gains from external procurement routes. • The supplier/buyer relationship could become too interdependent, leading to complacency. • Local suppliers that are small businesses may be less efficient with restricted economies of scale. 2.3.1.2 Short supply chains and integrated reverse logistics Although cost-efficient, most of today’s supply chain strategies are structurally complex and involving several geographically dispersed organizations. This makes the entire supply chain vulnerable to natural catastrophes or unexpected geopolitical events, affecting even one of the suppliers. This complex and dispersed character of current supply chains tends to increase the risk levels for multinational businesses, making the transparency of the entire procedure, both critical and complex [103,104]. Supply risk and the probability of supply disruptions is a key issue to supply chain management, and identifying which supplier has greater disruption potential is a critical first step in managing the frequency and impact of these disruptions in the supply chain. Thus, managing and mitigating disruption

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risks related to the supply chains of critical raw materials is of paramount importance to reduce serious negative repercussions on the involved and affected companies, consumers, and economies [105,106]. In local supply chains, resources tend to “flow” in short, horizontal structures formed by a network of a few tiers, which allows an easier and more efficient control of the entire supply chain and makes the supplying process less prone to disruption. Several local and short supply chain management schemes will be discussed and analyzed throughout this book, especially with respect to the vital food sector and rural development strategies [107], and in humanitarian aid logistics [108]. On the other hand, although such supply chains are “locally dedicated” (municipality, city or region), their implementation on the ground will generate a network of “delocalized” supplying platforms, if looked upon as a whole from larger scales (i.e., region or nationwide). Such a network could provide valuable supply alternatives, enable more resilient procurement schemes, and mitigate potential issues with local sourcing. From a decision-making perspective, this issue is converted into the managerial choice regarding the level of centralization/decentralization in the companies’ SCM strategy. Each strategy has it owns pros and cons as illustrated in many scientific publications [109,110], and adopting either one is the outcome of rigorous economic and impact assessment analyses. Overall, and in compliance with the concept of CE, such local, short and decentralized supply chain schemes could form reliable and resilient platforms to establish mutually beneficial relationships in the “cautious” and pragmatic business world, build long-term strategic alliances between the small core group of suppliers [111], and thus, leading to beneficial global impacts as we shall see in Section 2.3.2. As for the integration of reverse logistics in local/short supply chains, the CE concept aims at promoting designs and planning decisions enabling the simultaneous integrating reverse logistics activities to the supply chain management schemes in order to develop closed-loop patterns. Thus, when CE is implemented at a local scale, the reverse logistics could generate several favorable “returns” in term of savings related to reduced transportation and handling costs for the collection, recovery, and reprocessing of spent resources and materials [112], along with the creation of new jobs and the substantial reduction of the wastes to be increased or landfilled, and the various soil-, air-, and water-related pollution issues. Other societal and environmental advantages prompted by the local implementation of the CE concept, and benefiting local communities and

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preserving indigenous ecosystems, are presented in the following section on one of the CE concepts prone to local implementation: Eco-industrial parks. 2.3.1.3 Eco-industrial parks: locally implementing CE Circular economy was confirmed to have substantial potential to deliver economic, environmental, and social benefits. Enabling and promoting sustainable development via the adoption of CE principles is more relevant for local economies. One key manifestation of the CE concept at the local scale is the establishment of eco-industrial parks. In most cases, the gradual formation of such parks occurs at a regional scale with the gradual evolution of industrial symbiosis and by-products exchange networks between several local companies, fully or partly adopting the CE principles throughout their supply chains. Marian Chertow, a leading expert in the field of industrial ecology, highlighted the importance of the local dimension of industrial symbiosis in her definition of this concept, which reads as follows: “Industrial symbiosis engages traditionally separate industries in a collective approach to competitive advantage involving physical exchange of materials, energy, water, and/or by-products. The keys to industrial symbiosis are collaboration and the synergistic possibilities offered by geographic proximity” [113]. Several economic benefits arising from such symbiotic industrial clusters, insightfully labeled back in the late 1990s as “islands of sustainability” [114], were highlighted in the related literature [115,116], including: - Additional revenues from selling by-products, and the simultaneous reduction in discharge fees or disposal costs. - Reduced reliance of external sources for energy and materials, subject to fluctuating prices and vulnerable procurement routes, and the simultaneous reduction in related transportation costs. The alternative energetic sources and raw materials being locally generated or “by-produced” (depending on the advanced level of symbiosis in EIPs). Thus, the logical trend in an evolving EIP is the establishment of a symbiotic partnerships, enabling the formation of an autonomous network with increased economic benefits, reduced environmental footprints and improved social conditions for the local community directly or indirectly linked with the EIP. - Other related advantages include avoiding large investments, enabling agile and secure supply chains, promoting operational resiliency and innovations, and attracting/retaining a skilled workforce.

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From an environmental perspective, it was reported that the net environmental improvements enabled through the local implementation of a circular-based industrial symbiosis involved in the production of heat and electricity for the local town were averaging between 5% and 20%. Furthermore, since such a cooperative scheme reduced the need for heat and electricity from external sources, less greenhouse gas emissions were generated [117]. Considering the importance of the environmental factor within sustainable development schemes in general, and CE and EIPs in specific, a European project entitled “Eco-Industrial Park Environmental Support System (EPESUS)” was conducted between 2009 and 2012 to help “industrial facilities in reducing their environmental impact” and “identify costefficient measures for environmental improvement” [118]. The main objectives of this project, which are valid EIPs, and any other circular industrial cluster or activity, include: - Assessing the environmental impact of the involved industries through the monitoring of material and energy process flows. - Establishing a management guide for waste and energy to provide executive managers with a tool putting forward potential development opportunities through a better inclusion of the environment in the overall management strategy. - Identifying the environmental footprints of the production procedures, products, or services. - Locating (or better anticipating) environmental issues in this sector to quickly enable the setting (or better the pre-planning) of environmental solutions. As for the societal benefits from eco-industrial parks, several scientists are emphasizing the substantial impact of the business location and local collaboration and partnership on the company’s productivity and profitability on the one hand, and the well-being of local communities on the other hand [119,120]. In this regard, some scientists are stating that firms can create economic value by creating societal value, especially by establishing symbiotic industry clusters around its location [121]. Although this assumption was contested, nonetheless the societal advantages from the implementation of EIPs were widely reported including the creation of new job opportunities in cleaner industries, better wages, improved quality of life in the neighborhood, pollution prevention and reduced waste to the local landfill [122,123]. EIPs could also be involved in sponsoring various cultural activities and events, and building recreation

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facilities, and to promote and sustain communal activities [124]. In this regard, local governments should have a key role in promoting cluster development and firm competitiveness by setting clear and measurable social goals, which can promote social development and business sustainability including energy use, health and safety considerations, and infrastructure improvement) [125]. Throughout this book, and especially in Chapters 4 and 5, several successful and inspiring cases of EIPs in different countries will be presented and analyzed, for economic, environmental, and societal perspectives.

2.3.2 There, global CE 2.3.2.1 CE is a global concept The basic manifestation of the resilience CE concept is that circularity could be adopted and implemented throughout the entire supply and value changes at a local scale, as well as broader, national, and international scales. Nonetheless, in an era of a globalized economy, where most supply chains are of global aspect because involving either scarce or low-cost resources and considering the fact that the environmental and societal issues are occurring all over the world, the CE principles have to be implemented globally. Several studies analyzed and confirmed the worldwide dimension of CE by assessing the global flows of materials (from extraction to disposal), waste production, recycling, and the extent to which the resources are globally processed in cycles, either by society or by biogeochemical processes [126,127]. Thus, while some CE principles such as reuse, repair, and remanufacturing, tend to have a local or regional dimension, other CE concepts such as recycling and resources recovery have a global dimension. In this context, Walter Stahel, a leading figure in CE, warns that circular principles that are destined to be operated globally, such as recycling, could be “badly” influenced by the current global “principles of industrial production, such as economies of scale, specialization and employing the cheapest labor” [128]. Although the current global situation is still being dominated by “linear principles,” CE is increasingly being regarded by world business leaders, policy makers, and scientists as the most reliable alternative economic model, able to generate economic growth and solve the wide array of global economic and environmental challenges [129], through pragmatic raw material shift to gradually decouple economic growth for resources of fossil origin or from conflict zones (to be developed and discussed in Section 3 of the third chapter), and to create closed loops to recover resources and values on a global scale.

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Even with the global expansion of recycling during the last decades, no real breakthroughs were achieved within the linear economic model to establish globally extended networks to secure constant and reliable flows of recycled supplies, in compliance with local and international regulations. Why was that? Because, conceptually, recycling in the linear economy mindset is, in most cases, perceived as a business strategy primarily aimed at minimizing waste, and thus, avoiding disposal fees and pollution taxes, and building a “green” reputation. To a much lesser extent, recycling was perceived and adopted as a business strategy to recover resources and retain value. In practice, recycling is an efficient procedure to deal with wastes such as metals, paper, and glass. However, this is not the case for many composite materials, which entitle more effort from the industrial or academic R&D departments to increase recycling rates [130] or explore other circular recovery options. In all cases, to be operated according to the “philosophy” of CE, recycling, along with the rest of “loop-closing” concepts, needs to be designed to enable products’ longer useful lives (through maintenance, reuse, refurbishment or remanufacture), and resilient supply management schemes to recover resources. In this regard, related concepts need to be optimized to allow simultaneous materials recovery and values preservation. 2.3.2.2 Global supply and value loops In the 2014 WEF report “Toward the Circular Economy: Accelerating the scale-up across global supply chains,” prepared in collaboration with the Ellen MacArthur Foundation and McKinsey & Company, it was stated that the analysis of most advanced business cases confirm the fact that “a supply chain management approach that balances the forward and reverse loops and ensures uniform materials quality is critical to maximizing resource productivity globally” [131]. Worldwide, CE principles involving the recovery of valuable resources throughout the entire supply chain, could “lift” developing countries to the rank of industrialized nations, and enable developed and industrialized countries to reduce the vulnerability of their current supply chains, promote environmental preservation and, increase societal well-being [105]. For corporations, it can enable sustainable growth and give a competitive edge in a world sill, to a large extent, “exploited” and “governed” by unsustainable and sometimes risky procedures and decisions. For many decades, waste management strategies were basically searching for ways to “get rid” of wastes. In the linear economy model, wastes are

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being generated worldwide to be either landfilled or incinerated. Both measures are still the most dominant disposal procedures around the world, which leads to the continued loss of valuable resources (especially nonrenewables), and the unrelenting deterioration of the environment (soil, air, and water) due to toxic emissions from landfills and incinerators. CE is providing new alternatives to these unsustainable waste management schemes enabling the recovery of “to-be-lost” resources and their embedded values, the preservation of the environment, and the promotion of the well-being of people (less pollution, more jobs,). In this context, the concept of “zero waste” is being promoted in the literature as one of the most visionary concepts for solving waste problems [132], and a zero waste index is being proposed to measure the performances of waste management systems and to help cities in reaching this goal [133]. Thus, the key factors supporting the implementation of the CE principles on the global scale include the exchange of designs and technologies to optimize the recovery of resources throughout the entire supply chain, often involving and necessitating “cross-borders” cooperation. Overall, the major endeavor enabling and facilitating the global expansion of CE is the development of global resources’ closed loops, including sharing and exchanging waste materials. In the previous Section 2.3.1, geographical proximity was emphasized by many scientists as a catalyzing factor for the successful establishment of industrial symbiosis (IS) clusters at a regional level. Recently, many reports are highlighting the fact that CE is a resilient concept that could equally be implemented at broader levels, including international and complex business environments [105]. In the IS sector, for instance, new trends are revealing interesting prospects and opportunities for “long-distance” exchanges of wastes. Exploring this option, away from one of the fundamental conceptions of IS (i.e., proximity) was mainly trigged by the failure of many EIPs [134] and the obvious fact that the supply/demand of waste is often geographically scattered. Selected advantageous features to IS from long distance and even crossborder exchanges of resources include [135e137]: - improving the company’s attitude to adopt CE principles by acquiring resources from various circular routes. - Stretching geographical limits may allow companies to engage and partner with multiple suppliers. - Such long-distance exchanges will help in increasing the volume of reused materials, thus making IS-related processes more appealing to investments.

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Nonetheless, it has also to be mentioned that, in most cases, longdistance exchanges would require more complex and costly reverse logistics, which would lead to globally “dispersed” footprints, thus complicating the assessment of the environmental and societal impact of circular-based supply chains and manufacturing processes. Recently, the research field linked to the supply chains in CE started focusing on developing models and network designs for global closedloop supply chains, including “global factors” such as distance from markets, access to resources, exchange and tax rates, import tariffs, and trade regulations [138,139]. In this context, and in order to further optimize global supply chains, it was recommended that smart infrastructure and tracking technology need to widely spread, especially across emerging economies and other developing countries [105]. 2.3.2.3 Global societal and environmental benefits Although the economic benefits and prospects of CE were made visible to stakeholders and decision makers (e.g., CE has a global market value of at least USD 1000 billion [140]), debates over CE from an economic perspective are still going on in governmental, business and academic circles, as we shall develop in the next chapter’s Section 3.2.2. However, considering the undeniable fact that the current environmental and societal situations are too alarming in many parts of this world, and it will continue to deteriorate if we continue business as usual, the awareness and promotion of the societal and environmental benefits from the global implementation of CE seem to be more easier to be perceived and defended. Indeed, in the related literature, clear and unmistakable links between CE and sustainable societal development were reported [141,142]. Ideally, and through various innovative business patterns, CE is expected to “help society reach increased sustainability and wellbeing at low or no material, energy and environmental costs” [116]. From an environmental perspective, one of the global targets of CE is the protection and preservation of the environment with less recourse to pristine resources in general and finite ones in specific, minimized use of the environment as a sink for residuals, reduced wastes and emissions, and more renewables (energy and materials) throughout the entire value chain, etc. Nonetheless, the “relationship” between CE and the environment is fundamentally deeper. Indeed, experts in the field of environmental economics are emphasizing that the environmental profits within the CE concept should be observed not only for a physical perspective (visible impacts

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such as reduced amounts of wastes going to landfills or reduced use of water resources, etc.) but also from an economic angle [143]. In layman’s terms, CE enables profits for and from the environment. Thus, several publications in the field of environmental economics, including the book “Economics of Natural Resources and the Environment” published in 1990 by British scientists David W. Pearce, and R. Kerry Turner clearly emphasized the fact that the environment has values on its own by providing removable and nonrenewable resources as feedstocks for our economic activities and by acting as a sink for toxic waterborne, airborne or solid residuals from those activities [144]. In most cases, these economic, environmental, and societal factors are interlinked. For instance, more resources will be recycled and recovered in CE, thus risky jobs in the mining sector, for example, could be avoided, and more safer green job opportunities will be made available, which will promote the social well-being of the involved workforce, their families and communities. The environment will also benefit from reduced polluting activities during the extraction, transportation, and transformation of pristine resources. The resulting improvement in the environmental conditions (water, air, soil, landscape, etc.) will also promote welfare in societies. For this reason, it is important to rely on tools monitoring socioeconomic and environmental factors in order to rationally evaluate the potential net benefits provided by the CE. In this context, analytical tools from the scientific field of environmental economics can be of great help to this effort by identifying which component or procedure in both forward and reverse supply chains can provide the highest benefits to the economy [143]. Sound feedbacks from such analyses are also valuable in the policy and decisionmaking processes, since an integrated understanding of the consequences of those decisions (especially strategic ones related to the energy, water, and food sectors), is a key endeavor to ensure their successful implementation and achieve the expected outcomes, mutually benefiting the economy, society, and the environment. To illustrate the importance of acquiring a holistic perception of the decision-related subject and reliable impact assessments, the on-going dilemma about the persistent use of fossil fuels in various economic sectors is a relevant example. Indeed, in spite of recurring scientific proofs that “burning” fossil fuels is contributing to the worsening of the global phenomena of global warming and climate change, and despite binding international commitments such as the Kyoto Protocol and the Paris Agreement [145,146], the major global tendency is the continued use of

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“still cheap” fossil fuels, especially, fossil coal which will remain available up until the year 2112 [61]. Thus, from a purely economic perspective, coal is still highly available and cheap, and using it to “fuel” economic growth makes total sense. Putting the environmental, societal, and geopolitical factors on the table makes the decision making more complicated, but also more balanced, responsible, and far-sighted. How complicated is this decision? Well, we are the decision makers, and we are genuinely willing to decouple economic growth for fossil fuels. First, based on some scientists’ recommendations, and in order to avoid the large and negative environmental footprints of fossil fuels, we have to keep fossil fuels buried underground [60]. In this case, and regardless of the readiness of renewable energy sources to fill this “energy gap,” on a global scale, other scientists are very concerned about the risk of these buried reserves becoming “stranded assets” and creating a dangerous “carbon bubble” with large impacts on global financial markets [147]. So, should we use coal or not? We will get back to this dilemma in the next chapter (Section 3.3.2.1).

2.4 Conclusions After making the case for the CE concept by illustrating the heavy legacy of the current unsustainable fossil-based linear economy on the one hand, and briefly presenting the beneficial outcomes of implementing circular principles on the economy, society, and environment at local and global scales, on the other hand, it is very important to emphasize the following point: Embracing the CE principles “here” by a company or a city is a prerequisite for success, but it is not enough. Undeniably, in order to fully and genuinely embrace circularity, we need to promote it “elsewhere” too by helping others in implementing CE principles in their companies, regions, or countries. This proposal might be confusing for some of us and not even make sense for others, which is quite understandable in current times, overwhelmingly governed by self-centeredness and competitiveness. So, to better illustrate the philosophy behind CE, the importance of promoting and establishing partnerships and symbiosis connections (locally and globally), and the far-sightedness and benefits from helping “others” in adopting the CE concept, let us read and contemplate the following insightful story:

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A farmer growing corn is well known in his village for working very hard throughout the whole season and for taking care of his land and crop in an exemplary manner. Each year, his plantation produces the highest corn yield of the village, which did not please some of his neighboring farmers who tried to “sabotage” him in vain. Years went by, and at the end of one season, he was blessed with a record yield of corn in his entire region. Soon after, regional officials invited the devoted farmer, and as a token of appreciation for his achievement, a sponsoring company gifted him the best corn seeds available on the market for the coming season. In this local gathering, the farmer was eagerly asked: What are you going to do with those super seeds? He directly replied: I will share them with my neighboring farmers. The entire audience, including the jealous farmers, remained astonished by the reply until one of them spontaneously shouted: Are you crazy man, why do that? The wise farmer calmly explained: If I was going to cultivate these super seeds in my land alone, inevitably a fraction of the crop will be pollinized by the pollen coming from nearby farms cultivating low-yielding corn varieties. So, sharing those seeds with my neighbors, along with my expertize and dedication, is the only recipe to beat my own record, and remain ahead for years to come.

Back to the real world, adopting, implementing, and promoting CE principles on a global scale will enable economies to benefit from substantial net material savings, mitigation of volatility and supply risks, potential employment benefits, reduced externalities, and long-term resilience of the economy [148]. To reach those sustainable goals, we need to start moving toward CE at an accelerated pace, and the keyword in this crucial and timely endeavor is “CHANGE,” as we shall see in detail in the following chapter.

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