Getting hold of the circular economy concept

CHAPTER ONE

Getting hold of the circular economy concept 1.1 Historical background 1.1.1 Roots of CE In the last couple of decades, Circular Economy (CE) emerged as a reliable alternative economic concept able to cope with the imminent global sustainability issues, created by the current unidirectional economic model, Linear Economy (LE). The former is often referred to as the “take, make, and dispose” triptych by many scientists and authors discussing or promoting the concept of CE [1e4]. Suh designation, although summarizing the main features of the current production/consumption schemes, is missing key elements in the whole process, which are equally important in generating unsustainable activities such as transportation of resources or goods and the distribution of the end products. We will develop and discuss this matter in Chapter 3 (the “conceptual change” section). Historically, although the term circular economy is relatively new, the concept itself is well known to humanity for centuries, if not millennia, and it was instinctively and naturally implemented during times when humans and human societies lived in full synergy with nature. Back then, we considered ourselves as part of nature, and we used our curiosity and genius to live better, with the rest. Then, with the sedentary way of life, the fabric and state of mind of human societies profoundly changed, especially with respect to nature. Indeed, we started thinking of domesticating those beasts around us, then why not taming nature altogether. Thus, we started developing new tools and processes for that end, and the more we tamed nature, the more civilized we thought of ourselves. From that point, we became the masters and nature our subject, and since the second half of the 18th century onwards, humanity reached a new level of “virtual” mastership over nature through successive industrial, agricultural, and technological revolutions. The emergence of new political and economic philosophies, along with new societal aspirations (slowly being adopted as global standards of living), further deteriorated, not only our affiliation with nature but also the The Circular Economy ISBN: 978-0-12-815267-6 https://doi.org/10.1016/B978-0-12-815267-6.00001-3

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relationship between humans. Indeed, with the “almost holy” pursuit of happiness for oneself, the tribe, the country, etc., serious animosities started to emerge around the world as groups of humans thought that they have the right to control the resources of other groups (not without pretexts and brutal force if necessary). Thus, in recent times, the pursuit of one’s happiness, notwithstanding the inflicted misery on others, humans and the environment alike seems to be the best recipe for economic development. Such a brief historical account might sound a bit dark and biased (more on the negative side of the story, often mediatized as a success story), but if we analyze the course of human history and its relation with nature (mining, intensive agricultural practices, various pollution incidents, landfills, overfishing, and overexploitation of resources in general) and between humans themselves (slavery, colonialism, armed conflicts, etc.), we can agree that the damaging impacts of such economic development schemes, on the environment and societies alike, are too obvious to be ignored and will seriously compromise the survival of future generations on earth if we continue implementing the current economic model, especially in the energetic, industrial, and agricultural sections. We frequently and purposely have used the personal pronoun “we” throughout this section and if one still wonders who we are? We are humanity as a whole. In response to this alarming global sustainability issue, sporadic wake-up calls tried to alert decisions makers, industrialists, and the general public about the dark side of the story and the urgent need to tackle the serious and, back then, the emerging, economic, and environmental issues related to the various industrial and agricultural activities conducted in their times (mainly, related resources availability, and soil, air, and water contamination by anthropological activities). Such wake-up calls include: • Rachel Carson’s Silent Spring (1962), in which the American scientist and writer concluded that DDT and other pesticides had irrevocably harmed animals and had contaminated the world’s food supply, and accused the chemical industry of spreading disinformation and public officials of acting indifferently, despite the seriousness of the matter [5]. • The Limits to Growth, published in 1972 by MIT’s Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III [6]. In this book, the authors tried to build a model to investigate the consequences of five major trends of global concern including accelerating industrialization, rapid population growth, widespread malnutrition, depletion of nonrenewable resources, and a deteriorating environment.

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• In 1983, former Norwegian Prime Minister and Director-General of the World Health Organization, Gro Harlem Brundtland headed a commission with the main objective of exploring long-term strategies to achieve sustainable development by the year 2000 and beyond. The official mission of the Brundtland Commission ended officially in December 1987 after publishing its report “Our Common Future” (released in October 1987) [7]. After many decades of these, and much more, wake up calls, many scientists are still far from being satisfied with the global movement toward sustainability. Some of them even believe that the already precarious situation back then was further aggravated by insisting on relying on unsustainable mass production and consumption schemes. The reasons for such “odd behavior” are often related to side effects of global phenomena such as the globalization of markets, the emergence of highly populated nations, which is causing an increasing pressure on resources, the deregulation in the financial sector, the development of new and highly efficient extraction and processing technologies, the increasing trend of offshoring to reduce production costs (and sometimes to escape environmental regulations which, although being enforced to promote sustainability, are often perceived as impediments to competitiveness), etc. [8e11]. Overall, the abovementioned pioneering effort was conducted in times when economic growth, national pride, and most of all greed, seemed to have blinded humanity for a while (a century and a half or so), which was enough to cause serious global environmental and societal repercussions (externalities in the economic terminology). Even the main objective, for which such “sacrifice” was made, was not achieved, as global and recurrent economic crises still occur. The same is the observation for armed conflicts fueled by animosities and rivalries (mainly over monopolizing their extraction and/or trading of resources).

1.1.2 Founding fathers of modern circular economy Many scientists from various backgrounds, environmental activists, architects, politicians are proclaimed to be the instigators of the modern circular economy concept. Why modern? Because, stating that someone developed or originated the concept of CE is simply not possible, considering the short historical account developed earlier. Thus, it is more correct and fair to say that these respected scientists or other professionals developed the “term” of CE or the “modern” concept.

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The science of Environmental Economics is the real incubator of the CE concept. Indeed, since the early 1960s, this subdiscipline of economics combines conventional studies in the field of welfare economics and the theory of economic growth with more prominent input from the philosophy of sustainable development [12]. In practice, the scientific research effort in Environmental Economics deals with issues such as the various ways to dispose wastes, the quality of air, water and soil resulting from industrial and agricultural activities, the conservation of natural capital and biodiversity, and the promotion of sustainability. Other fields such as industrial ecology, chemistry, architecture, forestry, and agriculture captured the concept in its infancy and contributed to its development and emergence. Based on the related publications and activities, several personalities from various backgrounds could be considered as the founding fathers of modem circular economy. The far from extensive list includes: • The English-born American economist Kenneth E. Boulding, who published in 1966 his famous article entitled “The Economics of the Coming Spaceship Earth” [13], in which planet earth became a single spaceship with only limited resources, to be continuously reproduced or recycled. • The Swedish economist Karl-G€ oran M€aler, who focused his scientific work on the economics of nonlinear, nonconvex dynamics of ecosystems, within the general field of Ecological Economics. In 1974, he published a book entitled “Environmental Economics: A Theoretical Inquiry” [14], in which he discussed the relationships between economic growth, the quality of the environment, consumption, and welfare. • Timothy O’Riordan, the prominent British geographer, writer, and thinker actively contributed to the environmental governance and policy analysis, and the development of sustainability science. In his book “Environmentalism” published in 1981 [15], he developed the green ideology of environmentalism, thus providing policy and decision makers with a valuable reference on environmental planning, resources management, and pollution control. • Tom Tietenberg, an American Professor of Economics, who made a sustainable contribution in the field of environmental economics with his book entitled “Environmental and Natural Resource Economics” [16]. The first edition was published in 1984, and the book was reedited many times since. In these volumes, the author correlated economics to environmental issues by addressing basic theoretical economics and their application to global challenges such as the increasing population,

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depletable and nonrecyclable resources (mainly energy and mineral resources), waste disposal, and water and air pollution. The Swiss architect Walter R. Stahel had raised fundamental questions about the unsustainability of the current linear economic model under growing waste volumes and limitations in resources’ availability in his piece entitled “Product life as a variable: the notion of utilization” published in 1986 [17]. He advocated the need to develop new “spiral-loops that minimizes matter and energy flow, and environmental deterioration without restricting economic growth or social and technical progress” such as the servicelife extension of goods, and reuse, repair, and remanufacture. Stahel’s work on the notion of “cradle to cradle” and the concept of “performance economy” (to be detailed later in Section 1.2.), made a substantial contribution in the emerging field of circular economy. The American scientists Robert A. Frosch and Nicholas E. Gallopoulos, then working at the General Motors (GM) Research Department, with their article entitled “Strategies for Manufacturing” published in the Scientific American in 1989 [18]. In their paper, the authors advocated the urgent necessity to develop and implement an alternative integrated manufacturing system, termed as the industrial ecosystem. In such model “the consumption of energy and materials is optimized, waste generation is minimized and the effluents of one process . serve as the raw material for another process.” Robert Frosch, fifth administrator of NASA and later the vice president for research at GM, is often referred to as the father of industrial ecology [19], especially after the publication of his 1992 article “Industrial ecology: a philosophical introduction” [20]. The British scientists David W. Pearce and R. Kerry Turner with their book “Economics of Natural Resources and the Environment” [21], in which they gave a detailed description of the interactions between economics and the environment, including the need to account for environmental services, and the economics of pollution and depleting natural resources. The second chapter of this book published in 1990 was explicitly entitled “circular economy.” In 1992, American economist and ecologist Herman E. Daly published his paper “Allocation, distribution and scale: toward an economics that is efficient, just, and sustainable” to express his worries about inefficient, unjust and unsustainable economics [22], using the metaphor of a boat which would sink if it is overloaded, no matter how well the cargo is balanced.

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• the American environmental scientist Braden R. Allenby contributed to the development of the concept of industrial ecology through the publication of his two articles “Achieving sustainable development through industrial ecology” [23] and “Industrial ecology: The materials scientist in an environmentally constrained world” [24], both published in 1992. Two years later, he coedited a book with fellow Yale professor Deanna J. Richards entitled “The Greening of Industrial Ecosystems” [25]. • John T. Lyle, an American professor of landscape architecture who developed the concept of regenerative design with the publication, in 1994, of his book “Regenerative design for sustainable development” [26], in which he advocates the recourse to proven regenerative theories, practices, and strategies for the utilization of water, land, and energy resources, and waste valorization. The faculty, staff, and students of the Lyle Center for Regenerative Studies in California State Polytechnic University’s Pomona campus are following the footsteps of the Late Dr. Lyle toward “a future in which all people live with dignity in safe, healthy, and sustainable environments” [27]. • More recently, the coordinated work of the American architect William A. McDonough and The German chemist Michael Braungart gave a real momentum to the CE movement with the publication, in 2002, of their first book on the subject entitled “Cradle to Cradle:Remaking the Way We Make Things” [28]. In this book, they developed several circular principles and came about with the catchy notion of “waste equals food” referring to the need to design and manufacture products so that they would remain valuable after their primary useful life by providing either “biological nutrients” which could be safely reincorporated by nature, or as “technical nutrients” able to be recirculated within closedloop industrial cycles without being “downcycled” into low-grade utilization schemes. McDonough and Braungart also formed the McDonough Braungart Design Chemistry, a company closely working with businesses and governments to “design products which eliminate the concept of waste, use clean energy, value clean water and celebrate diversity” [29]. It has to be noted that the cradle to cradle designation is believed to be first coined by Walter Stahel during the 1970s [30,31]. The genuine effort made by Ellen Macarthur, the former English sailor, has to be also mentioned in this section. Indeed, although she is not among the modern founders of CE, the initiatives and joint actions conducted by her Foundation, the Ellen MacArthur Foundation (EMF) [32], to

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promote, popularize and accelerate the transition to CE are globally appreciated as expressed by many participants of the World Economic Forum session entitled “Toward the circular economy: Accelerating the scale-up across global supply chains,” held in Switzerland in 2014 [33]. Many reports where published by the foundation starting with the first volume published in 2012 and entitled “Toward the Circular Economy Vol. 1: an economic and business rationale for an accelerated transition” [34], followed by volume 2 “opportunities for the consumer goods sector” in 2013 [35] and volume 3 “Accelerating the scale-up across global supply chains” in 2014 [36]. The foundation also published several books such as Ken Webster’s “The Circular Economy: A Wealth of Flows” (first edition in 2015 [37] and second edition in 2017 [38]) and the book “A New Dynamic: Effective Business in a Circular Economy” [39], which is a compilation of contributions made by prominent authors such as Amory Lovins, Michael Braungart and Walter Stahel. A new edition of this book was published in 2016, entitled “A New Dynamic 2: Effective systems in a Circular Economy” [40]. All the reports published by EMF are downloadable for free [41]. One of the most utilized presentation to illustrate the CE concept is the EMF’s butterfly diagram depicting the continuous flow of technical and biological materials through the “value circle”’ [42].

1.2 Defining circular economy Before presenting, analyzing, and discussing the concept of CE and its implementation in many case studies, the notion itself should be defined. The importance of this first and fundamental step is mainly related to the fact that this emerging concept will be globally applied to deal with urgent and very challenging issues such as worldwide population growth, depleting fossil raw materials, climate change, and many environmental problems. In the related literature, many perceptions and viewpoints about CE were formulated into various definitions, since originating from various scientists, professionals, governmental bodies and international institutions, echoing their specific aspirations from such concept, which could be grouped into the economic, environmental, and social dimensions. The critical aspect of defining CE is the fact that legislations, development strategies, and policies will be developed and later implemented based on those definitions. The challenge at this point is that CE is a holistic and multidimensional concept, and its definition basically depends on who’s defining it.

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Economists, industrialists, chemists, farmers, strategists, ecologists will have distinct definitions of CE. Imagine government officials enforcing specific legislations and adopting action plans for years ahead based on the “official” definition of CE, but industrialists, on the other hand, will develop another vision of the whole concept. The implementation, in this case, will be very difficult, especially within an international network involving players from various nations, scientific or professional backgrounds and, more importantly, with various objectives (sometimes conflicting ones). In the following section, several definitions of CE will be presented and evaluated, along with the ones on related concepts such as bioeconomy, green economy, industrial ecology etc. The linear economic model will also be defined since the notion is always used on CE lexicon as the antonym of CE.

1.2.1 How to define circular economy? In this key segment, we will present and evaluate the various proposed definition of CE from selected official bodies, nongovernmental organisms, as well as scientists and professionals focusing their research studies and business activities on the CE concept. We will also discuss some missing aspects in those definitions (especially the social factor) and the need to reach a consensus on a globally accepted definition of CE. 1.2.1.1 Definitions from official and nonofficial bodies The selected definitions were taken from authoritative sources on CE from both official (governments, parliaments or independent public) institutions and nonofficial (nongovernmental, nonprofit, etc.) organizations and associations. - On 2 December 2015, the European Commission put forward a package to support the EU’s transition to a circular economy entitled “closing the loop - An EU action plan for the Circular Economy” [43]. As a document of legislative proposals for action plans on matters such as raw materials and wastes, no clear definition of CE was proposed in this report. Most of the discourse was on the benefits generated from the transition to CE, including economic gains, energy savings, environmental benefits, local jobs, and opportunities for social integration. In other EU official documents, some “practical” definitions of CE were provided including the one used in the EU parliament publications stating that CE is “a production and consumption model which involves reusing, repairing, refurbishing and recycling existing materials and products to keep materials within the economy

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wherever possible . waste will itself become a resource, consequently minimising the actual amount of waste. It is generally opposed to a traditional, linear economic model, which is based on a ‘take-make-consume-throw away’ pattern” [44,45]. Since 2015, the U.S. Chamber of Commerce Foundation is focusing its Sustainability Forum on the concept of CE to explore “the powerful impact of the circular economy . how to make the circular economy work for businesses, examine how innovative business models can accelerate cost savings, and explore new advances in cradle-to-cradle design.” In the 2015 forum entitled The Circular Economy: Unleashing New Business Value,” CE was defined as “a model that focuses on careful management of material flows through product design, reverse logistics, business model innovation, and cross-sector collaboration” [46]. Since 2017, the organizers changed the title of their annual event from Sustainability Forum to Sustainability and Circular Economy Summit [47], which echoes the growing interest in CE in the United States. In the report “Toward the Circular Economy - Economic and Business Rationale for an Accelerated Transition,” the Ellen MacArthur Foundation proposed the following definition of the concept of CE: “an industrial system that is restorative or regenerative by intention and design. It replaces the endof-life concept with restoration, shifts toward the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior design of materials, products, systems and business models” [34]. In a report published in 2014, the World Economic Forum used this definition developed by EMF [33]. Circular Economy European Summit is an annual gathering of scientists, industry experts, and professionals from different backgrounds to debate the global challenges related to sustainability and the role of CE to address those global challenges. The first congress was held in Barcelona in 2016. The organizers of this summit are defining CE as a “conceptual framework of sustainable development. Its goal is the production of goods and services while at the same time reducing the consumption and wastage of raw materials, water and energy sources” [48]. The Finnish Innovation Fund Sitra is an independent public foundation aiming at promoting sustainability in Finland and around the world. One of its pioneering effort related to CE is the organization of the first-ever World Circular Economy Forum in Helsinki on June 2017. In one of its publications, Sitra stated that CE “is based on the sustainable use of resources. This means monitoring, minimising and eliminating waste flows by circulating, rather than just consuming, materials. In practice, this could mean not adding substances to raw materials that could

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prevent recycling at the end of the product life cycle, or product design that facilitates the efficient end-of-life sorting of constituent materials. The circular economy seeks to base itself on renewable energy. It goes further than the production and consumption of goods or services” [49]. - WRAP (Waste and Resources Action Program) was set up in the United Kingdom in 2000, to promote sustainable waste management in the United Kingdom, and to accelerate the move to a sustainable, resourceefficient economy. For WRAP, CE “is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life” [50]. 1.2.1.2 Definitions from scientists and professionals The increasing interest in CE from the academic and professional spheres generated several proposals to define this emerging and highly anticipated economic model, including: - A team of Finnish researchers, in their article “Circular Economy: The Concept and its Limitations” [51], proposed the following definition: “Circular economy is an economy constructed from societal productionconsumption systems that maximizes the service produced from the linear nature-society-nature material and energy throughput flow. This is done by using cyclical materials flows, renewable energy sources and cascading1-type energy flows. Successful circular economy contributes to all the three dimensions of sustainable development. Circular economy limits the throughput flow to a level that nature tolerates and utilises ecosystem cycles in economic cycles by respecting their natural reproduction rates.” - According to the Dutch Council for the Environment and Infrastructure, an independent strategic advisory board for the government and parliament on sustainable development issues, CE “stresses the following focal points: reducing the consumption of raw materials, designing products in such a manner that they can easily be taken apart and reused after use (eco-design), prolonging the lifespan of products through maintenance and repair, and the use of recyclables in products and recovering raw materials from waste flows. A circular economy aims for the creation of economic value (the economic value of materials or products increases), the creation of social value (minimization of social value destruction throughout the entire system, such as the prevention of unhealthy working conditions in the extraction of raw materials and reuse) as well as value creation in terms of the environment (resilience of natural resources) ” [52].

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- UK researchers and scientists from different business schools suggested a definition which reads: “The Circular Economy is an economic model wherein planning, resourcing, procurement, production and reprocessing are designed and managed, as both process and output, to maximize ecosystem functioning and human well-being”[8]. - Other scientists from manufacturing and industrial design backgrounds defined CE as “a regenerative system in which resource input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing material and energy loops. This can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling” [53]. - Researchers from the Swedish KTH Royal Institute of Technology, demonstrated that CE is an essentially contested concept, and defined it as “a sustainable development initiative with the objective of reducing the societal production-consumption systems” linear material and energy throughput flows by applying materials cycles, renewable and cascade-type energy flows to the linear system. CE promotes high value material cycles alongside more traditional recycling and develops systems approaches to the cooperation of producers, consumers and other societal actors in sustainable development work” [54]. The authors objectively and justly stated that “the definition that we give here is only a ‘build-up’ for what comes after, i.e., it is not intended as a universal and absolute definition.” This is only a small account of the numerous proposals to define CE from the academic and professional worlds. Such prolific effort is mainly due to the recent emergence of the concept on the one hand, and the high expectations from its implementation on the other hand (economic growth, sustainability, environmental preservation, social well-being, etc.). Recently, many research and reviews papers focused on analyzing and evaluating the various CE definitions. In the following sections, we will detail this interesting endeavor. 1.2.1.3 Evaluating the current definitions Several articles were published in the last decade to examine how scientists, industrialists, and governmental bodies are perceiving the concept of CE through their proposed or adopted definitions. In their article entitled “Conceptualizing the circular economy: An analysis of 114 definitions” [55], the Utrecht University’s Innovation Studies Group overviewed an extensive number of definitions from published materials including the special issue “Exploring the Circular Economy,” published by the Journal of Industrial Ecology in June 2017 [56]. The authors

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found that 73% of those definitions dated from 2012 onward and important fractions was published in nonpeer-reviewed journals (32%). In another related study, and after an extensive literature review, researchers from the Spanish University of Navarro reached the conclusion that for defining CE, four main components need to be systematically included in order to reach a consensus on CE [57]. The components are: i) The recirculation of resources and energy, the minimization of resources demand, and the recovery of value from waste, ii) A multilevel approach, iii) Its importance as a path to achieve sustainable development, and iv) Its close relationship with the way society innovates. In this paper, the authors also generated an interesting knowledge map of CE, depicted in Fig. 1.1. It is clear from the proposed definitions that we speak about the same thing. However, when we want to describe it, it is another matter. CE is indeed a multidisciplinary concept, which makes its definition a challenging endeavor. The main issue is how to develop a comprehensive definition that covers a holistic concept like CE without generating either a too restrained or too loose a description. Analyzing the various proposed definitions reveals that most of them are compilations of ideas and/or objectives emerging from various scientific and industrial disciplines. Furthermore, as a key enabler of sustainability, CE needs to be defined so that it echoes the tridimensional aspect of sustainable development (economy, environment, and society). The current definitions tend to be more on the economic side (how to generate growth from circularity while

Figure 1.1 Circular economy knowledge map proposed by Prieto-Sandoval et al. Data source Prieto-Sandoval V, Jaca C, Ormazabal M. Towards a consensus on the circular economy. Journal of Cleaner Production 2017;179:605e615.

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preserving the environment). In this case, the proposed definitions are too technical, which overshadow the other dimensions of CE, often promoted as a “conceptual framework of sustainable development” [48]. The social dimension is rarely integrated into these definitions. Although being acknowledged in the rhetoric around CE, the social factor is still perceived as a mere side effect of CE implementation. Recently, many scientists are pushing toward including this pillar of sustainability in the CE definition to fully and earnestly recognize it alongside the economic and environmental sides. For instance, Murray et al. [8] focused on this matter and, in a section on the tensions and limitations within CE, the authors reported other aspects missing from the definitions such as confusion with semantics and the inclusions on potentially unintended consequences and oversimplistic goals. It has to be noted that in their effort to emphasize on the need to include the social factor, the authors proposed a definition (Cf. Section 1.2.1.2) and made the same inaccuracy as in the other definitions by limiting the outcome from CE to “maximize ecosystem functioning and human well-being.” Overall, CE is still an emerging concept, and it will be the best platform to, finally, reunite the economic, environmental and societal pillars of sustainability in the globally applicable and highly anticipated CE concept. Putting aside political inclinations, nationalistic tones, and ideological stances will help in reaching a consensus on CE definition quickly and empower a worldwide momentum toward the achievement of the UN’s sustainable development goals (SDGs) [58]. 1.2.1.4 Our interpretation? In this book, we decided not to propose a definition of CE. Adding another one to the already extensive catalog of definitions is not important. We all know that individual or group initiatives from scientists, industrialists, or any third party involved in CE, will remain valid and useful only within the closed circles of the originating group. Thus, we deem crucial and urgent, for the future of CE, that international bodies with a well-established authoritative status (precisely the United Nations) need to get heavily involved in this effort and invite world-class scientists, leading industrialists, and decision-makers. The objective is to jointly develop and agree upon a clear and comprehensive definition of CE, which could later be adopted on a global scale. Such a significant endeavor will help in harmonizing and synchronizing the efforts of all

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possible contributors for worldwide implementation of this new economic model, thus laying a solid ground for CE to quickly mature and thrive.

1.2.2 Defining other related green concepts As a holistic and multisectoral concept, CE is by nature inclusive, which is why numerous studies investigated its relationship with other green concepts [59], including industrial symbiosis [60], industrial ecology or eco-industry [61,62], and green economy and bioeconomy [63]. The other notions frequently investigated alongside CE are definitely sustainability and sustainable development [53,64,65]. In the following section, these green concepts are briefly presented. 1.2.2.1 Bioeconomy Bioeconomy is also an emerging concept promoted and implemented for its sustainability and numerous economic, environmental, and societal benefits [66]. According to the European Commission, bioeconomy “encompasses the production of renewable biological resources and their conversion into food, feed, biobased products and bioenergy. It includes agriculture, forestry, fisheries, food and pulp and paper production, as well as parts of chemical, biotechnological and energy industries” [67]. As an emerging concept, it was reported that bioeconomy needs to be carefully and thoughtfully implemented and controlled via continuous monitoring of the sustainability of its components via various metrics, as well as the assessment of key environmental and social factors such as greenhouse gas emissions, land-use change, biodiversity, employment, and food security [68]. Further details and discussion on the bioeconomy concept and its global impacts and prospects (industrial, environmental, social, and geopolitical perspectives) are compiled in our previous book entitled “A Sustainable Bioeconomy: The Green Industrial Revolution” [69]. It has to be noted that, based on the latest publications, researchers seem to perceive bioeconomy as a highly interconnected concept with CE, to the point that a new notion is emerging: Circular bioeconomy [70,71]. 1.2.2.2 Green economy The Green Economy Initiative was launched in 2008 by the United Nations Environment Program (UN Environment). According to the leading global environmental authority, green economy is a concept that “results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities,” and 65 countries have already started transforming

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their economies into drivers of sustainability by implementing green economy and related strategies [72]. I has to be highlighted that, although the implementation effort was conducted under the aegis of the UN Environment and was highly publicized, some experts still perceive the concept of green economy as having inner structural constraints, susceptible of withholding the realization of key objectives in greening economies, mainly in the social field [73]. Other serious concerns were reported in the literature concerning the damaging impact of influential geopolitical and industrial players carrying out highly selective implementation schemes of green economy, sectorally and regionally [74]. Circular economy needs to be immunized against this threat too. If we manage to do it, CE will be a real enabler of the SDGs. If we fail, CE will be heavily obstructed during its global implementation, and we will continue heading toward pronounced worldwide disparities, which would fuel new kinds of conflict over the “control” of wastes and renewable resources. Too much is at stake, and we shall further develop this discussion and propose solutions throughout this book, to avoid labeling CC as a “Gramscian passive revolution,” as it was the case for green economy [75]. 1.2.2.3 Industrial ecology and industrial symbiosis The concept of industrial ecology is based on a straightforward analogy with natural ecological systems [76]. In the preface of this book, Robert M. White, former president of the National Academy of Engineering, coined this economic model as “the flows of materials and energy in industrial and consumer activities, of the effects of these flows on the environment, and of the influences of economic, political, regulatory, and social factors on the flow, use, and transformation of resources” [77]. Industrial symbiosis, an emerging subfield of industrial ecology [78], has gained considerable interest among scientists, especially in the fields of production economics [79], mainly due to the urgent necessity for industrial activities to reduce their environmental footprint by limiting their solid, liquid, and gaseous emissions, reducing their water and energy requirements, and limiting their consumption of nonrenewable resources. Yale Professor Marian R. Chertow, an authoritative source on industrial ecology, described this concept as “engaging traditionally separate industries in a collective approach to competitive advantage involving physical exchange of materials, energy, water, and byproducts. The keys to industrial symbiosis are collaboration and the synergistic possibilities offered by geographic proximity” [80].

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1.2.2.4 Other related concepts • Cradle to Cradle (C2C): In their 2002 book, “Cradle to Cradle: Remaking the Way We Make Things” [28], William McDonough and Michael Braungart introduced the C2C as a concept integrating design and science to generate benefits to society from the exploitation and utilization of clean and safe materials, water, and energy supplies, within a circular economy paradigm. According to the authors, the C2C design framework is based on three nature-derived principles [81]: (i) the waste of one production system is the “food” for another system, meaning “everything” can be designed, produced, used, and disassembled to be safely returned to the soil as “biological nutrients,” or reintroduced to the production cycles as “technical nutrients,” i.e., feedstock for the design and production of other safe and easily disassembled products. (ii) Capitalizing on the abundant, clean, and renewable energy resources such as clean and renewable energy such as solar, wind, and geothermal energy, thus decoupling humanity’s energetic need from fossil recourses, while promoting human health and preserving the environment. (iii) Be inspired by the thriving diversity in nature through highly yielding and efficient phenomena such as photosynthesis and nutrients cycling, which are well adapted and functioning in their “niches.” • Performance economy: In the 2010 edition of his book “Performance Economy” [82] (first published in 2006 [83]), Swiss architect and industrial analyst Walter Stahel stated that this concept “outlines the strategies needed to face tomorrow’s challenges by using science and knowledge to improve product performance, create jobs, and increase wealth and welfare . e all while reducing the consumption of non-renewable resources and contributing to a low carbon, low toxin society.” Stahel twins CE with performance economy, with the only exception that in the latter, goods or molecules are sold as “services” through various business models such as sharing, renting, and leasing [84]. Thus, within the performance economy, the ownership of any produced item, and its embodied resources is retained by the manufacturer, who in return will be responsible for the costs of the postproduction risks and waste, which entitles a thoughtfully-designed product in the first place. • Natural capitalism: Since their first book on natural capitalism published in 1999 and until the 10th edition entitled Natural capitalism: The next

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industrial revolution, first published in 1999 [85], Paul Hawken, Amory Lovins, and L. Hunter Lovins are promoting a global economic concept, which catalyzes on the world’s stocks of natural assets including soil, air, water, and all living things. Their concept was developed in direct opposition to the “unnatural” model of industrial capitalism [86]. According to the authors, the concept of natural capitalism is based on four main principles: (i) The radical increase in the productivity of natural resources by implementing new and more efficient designs, production practices, and technologies. (ii) Shifting to closed-loop production models, inspired by nature, which entitles the elimination of the notion of wastes and the continuous and safe channeling of outputs, either to nature as a nutrient, or as feedstocks for other manufacturing processes. (iii) Shifting to a “service-and-flow” business model instead of the current “sale-of-goods” model. Such change is believed to be mutually beneficial for the service provider and the customer. (iv) Reinvesting in natural capital by promoting initiatives and aiming activities at restoring and regenerating natural resources, thus laying the growth for genuinely sustainable development. • Regenerative design: This concept is based on process-oriented and selfregenerating systems, designed to enable the valorization of the full potential of resources (i.e., outputs equal inputs), thus eliminating the notion of waste. Although mainly applied in the agricultural and architectural fields [78,87], Compared to green chemistry, perceived as a generic, top-down approach, regenerative design and development is, by contrast, a holistic concept inherently comprising the social and ecological factors [88]. • Biomimicry: is a novel concept generated in a postindustrial revolution era, and is based on mimicking the most efficient producing and recycling entity known to men, Nature. During the last decade, an increasing number of researchers have begun exploring and exploiting “natural” designs and mechanisms to their respective fields in robotics, medical, energetic, building, and textile sectors, to name a few [89e91]. Biomimicry, or “innovation inspired by Nature” [92], thus relies on “studying nature’s most successful developments and then imitating these designs and processes to solve human problems” [93]. Like any emerging (or reemerging) model, its inspirational theory and practices are being questioned, especially to determine if this concept

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is inherently sustainable [94]. In this context, some scientists believe that the “overidolization” of nature could undermine the “human-centered outlook of industrial design’ and that “biomimicry fails to take notice of the complex network of human society” [95]. The counterarguments, which could easily overshadow this simplistic viewpoint, are the facts that the overidolization of humanism led us to serious complications, and that the human-centered outlook of industrial design failed to take notice of the complex network of nature.

1.2.3 Linear economy (LE) The designation linear economy is being used as the antonym of circular economy. That is why, in most related publications, LE and CE are presented together to comparatively define each economic model while illustrating the difference between these competing concepts as highly effective and unsustainable LE, and highly efficient and sustainable CE. In Fig. 1.2, the general perception of LE and CE is illustrated. The former is based on the “take, make, and dispose” linear approach, and the latter on closed loops schemes (both symbolized by bold arrows). Thus, LE is a straightforward “production-consumption-disposal” structure, where resources are extracted, manufactured into products, which are

Figure 1.2 From a linear to a circular economy. Data source PBL Netherlands Environmental Assessment Agency, The Hague. Circular economy: measuring innovation in the product chain. 2016. http://www.pbl.nl/en/infographic/from-a-linear-to-a-circulareconomy.

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used and then incinerated or landfilled. Thus, it limited the initiatives to minimize production and consumption wastes or valorize them. On the other hand, CE is based on a dynamic, resilient, and more efficient “production-consumption-recycling/recovering” structure, where resources are recirculating with the same process of a network of processes, so that the output of one is the input of another, thus retaining the value of the products or their parts [97e99]. For a more illustrative description of those two economic models, two interesting analogies were proposed: cowboy versus spaceman and lake versus river (respectively LE vs. CE). The first analogy was coined by Kenneth Boulding in his book chapter “The Economics of the Coming Spaceship Earth” [13]. Regarding the open economy (Boulding’s LE), he symbolically used the analogy with a cowboy to emphasis on the “reckless, exploitative, romantic, and violent behavior” of societies adopting this concept. On the other hand, he called the closed economy (Boulding’s CE) the spaceman economy, comparing planet earth to a spacecraft in which all resources are limited, and where the only viable solutions is to live in a “cyclical ecological system.” The other analogy is the one proposed by Walter Stahel in his 2016 article in Nature [100], where LE is compared to a river and CE to a lake. For the linear model, resources are flowing like a river, from feedstocks to end products which are sold to a consumer who becomes the owner and user of that item. Ultimately, the consumer will have the final decision to recycle a used item or dump it. Since this linear economic model is fundamentally based on mass production at one end, and mass consumption on the other end. Thus, under this linear scheme, ending in a landfill or an incinerating facility is the “ultimate” fate of products in LE. Circular economy, on the other hand, was assimilated to a lake where goods and materials are continuously reprocessed in a closed environment, which saves valuable resources (water, energy, nutrients, etc.), reduces consumption and wastes, preserves the environment, while creating new jobs and exploring new markets.

1.3 Circular supply chain: closing the loop, retaining the value In order to ensure a highly competitive CE model, the flow of resources (materials, money, and information) has to be effectively managed, as well as the entire value-adding processes occurring from the acquisition of

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the raw materials (or data) to the storage, marketing, and use of end products (or service). Thus, as defined by Robert Handfield and Ernest Nichols in their 1999 book entitled Introduction to Supply Chain Management [101], the supply chain “encompasses all activities associated with the flow and transformation of goods from raw materials stage (extraction), through to the end-user, as well as the associated information flows. Material and information both flow up and down the supply chain. Supply chain management (SCM) is the integration of these activities through improved supply chain relationships, to achieve a sustainable competitive advantage.” In this context, circular economy is expected to lay the ground for sustainable economic growth by new implementing business models, developing new job opportunities, preserving valuable resources (both finite and renewable ones), while preserving the environment and promoting social welfare. According to many experts, the key endeavor to achieve such highly anticipated objectives is to secure a sustainable supply chain of raw materials, products, energy, water, finances, information, etc. [102].

1.3.1 Sustainable supply chain management Supply chain management is a set of designs and strategies developed for the efficient management of flows of products, information, and financial resources throughout complex production systems [103]. Indeed, improving the security of the entire supply chain (often a complex one) through sustainable management schemes is of paramount importance in CE, as it is believed to lead to valuable outcomes such as: - Maximizing the use of resources [104]. - Saving material cost and dampening price volatility [105]. - Minimizing energy consumption and waste generation through various supply chain configurations [106,107]. - Enabling new business models and engaging both manufacturers and consumers in the supply-chain issues to develop more effective solutions [108]. - Preventing the generation of waste along the life-cycle stages of production and consumption can help avoid the loss of resources and the environmental impacts associated with waste management [109]. - Incorporating more digital information in the supply chain [110]. For many decades, concerns over an increasing number of environmental issues related to key sectors (such as fossil fuels, mining, agriculture, and various industries) remain unaddressed, until new legislations and other

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regulatory pressures (taxation solutions such as the polluter-pays principle [111]) started to be enforced nationally and internationally (less so in developing countries) [112]. Besides, as consumers started to be more aware of the environmental impact of resources’ extraction, and unsustainable production processes, and to a lesser extent of the related social implications, companies and corporations started to effectively work on this sustainability issue in order to promote their competitive advantage and to develop an ecofriendly image, proven to be a very effective marketing tool. One of the key elements to build or reinforce a competitive advantage is through a well-planned, and implemented, management strategy of the company’s supply chain. Such revolution in the management and business fields is referred to as green or sustainable SCM [113]. So, what is the role and impact of such SCM in the transition toward a circular economy?

1.3.2 Circular supply chain management As stated earlier, the central goals of implementing sustainable SCM practices include environmental preservation by responsible management of resources and the substantial reduction of emissions and wastes during both production and consumption stages. Thus, ensuring the company’s business success, while “internalizing” environmental externalities [114,115], is the main “mission” of sustainable SCM. Likewise, CE is profoundly prompting environmental sustainability through its various circular production practices and business models. It goes further by developing efficient symbiotic relationships with the ecological systems in order to generate economic growth, while benefiting nature. The “waste equals food” notion of the cradle-to-cradle concept clearly highlights the fact that, unlike the so-called green or sustainable SCM, circular economy is not just concerned with the reduction of wastes throughout the entire supply chain, but rather with the development and implementation of self-sustaining and adaptive production systems in which resources are used over and over again [116,117]. As well, CE does not consider nature as a sink for wastes and emissions (often leading to further environmental and health issues) [118]. Thus, in order to incorporate green or sustainable SCM in the CE “toolbox,” scientists, researchers, industrialists, and other involved parties, need to introduce more circularity to these important management practices [119]. Indeed, greening the SCM, while still considering the product from the processing of raw materials to delivery to the customer, is not a circular

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way of thinking. Rather, a circular and sustainable SCM must integrate flows and related issues extending beyond this green, yet still linear, supply chain management scheme. Circular business models and practices such as product design, manufacturing by-products, by-products produced during product use, product life extension, product end-of-life, and recovery processes at end-of-life were reported [120], along with other aspects such as reverse logistics, and more engaged and responsible behaviors from producers and consumers [121,122]. In order to upgrade green or sustainable supply chain management, and include it in the CE concept, scientists are emphasizing the need to evaluate the performance of green SCM based of the “Reduce, Reuse, and Recycle” (3Rs) rules of CE [123]. In an interesting paper overviewing the latest academic literature on SCM approaches in a circular economy, researchers from the Finnish Technical Research Center (VTT) have determined major challenges facing SCM in CE. The information in Table 1.1 summarizes those challenges.

Table 1.1 Major challenges facing the supply chain management in circular economy and insights from literature streams [124]. Challenges Literature stream

Maintaining current SCM schemes because building new ones is a challenging task Lack of motivation and cautious behavior from the different value chain partners during the implementation of novel business models Lack of commitment to a full-scale partnership between the supply chain players, especially in cross-industry cooperation Issues with the logistics during warehousing, collection and handling Distribution on reverse side. The main issue in this regard is the degree of involvement of end users, still regarded as not adequately prepared for such proactive role [125]. Balancing the forward and reverse loops and ensuring uniform material quality

Social aspects of SCM Value network Social aspects of SCM, value network, governance models SCM, value network

Sustainable SCM/ closed-loop SCM/ reverse supply chain Sustainable SCM/ closed-loop SCM/ reverse supply chain Sustainable SCM/ closed-loop SCM/ reverse supply chain

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1.3.3 Closed-loops and retained value 1.3.3.1 Closed-loop supply chain (CLSC) To fully adopt the circular economy concept, corporations imperatively need to integrate sustainable goals in their planning and be genuinely prepared for cooperation with an evolving network of peers and other third parties. One of the key sustainable objectives to prevent or mitigate the impacts of our intensive activities and practices (industries, agriculture, mining, etc.) on the environment by implementing closed-process chains. Such an integrated management approach must, therefore, consider the whole product supply chain, with a special emphasis on products recovery, reutilization, and remanufacturing [126e128]. Thus, green and circular SCM strategy based on closed-loops is able, if properly implemented, to ensure gainful outcomes for entrepreneurs (increased economic benefits and enhanced competitiveness), the environment (less pollution and reduced pressure on raw resources) and society (new jobs, clean water, healthy food). Guide and Van Wassenhove defined CLSC as “the design, control and operation of a system to maximize value creation over the entire life-cycle of a product with dynamic recovery of value from different types and volumes of returns over time” [129]. In practice, CLSC relies on a set of innovative practices, technologies, and services enabling the recycling, remanufacturing, and refurbishing/ reconditioning of products, carried out by the manufacturer itself, or through partnerships within an extended supply chain network. This network could include trading partners, sponsored startups, firms involved in other activities (networks in eco-industrial parks), an also partnership with consumers [130e132]. In the CE literature, some scientists are trying to make a distinction between the so-called open-loops and closed-loops in the SCM [133e136]. In the former, marketed products are not recovered by the manufacturing firm, but by third parties with other kinds of infrastructure, technology, and expertise enabling a profitable recovery, reuse or remanufacture of these products. The term “closed-loops,” on the other hand, is reserved for the supply chains where the manufacturer is reclaiming its products from customers to revalorize them (as a whole or as parts) via new circular business models. In this book, either way, the supply chain is circular, and as far as the product itself, the loop is closed anyhow. That is why we will only consider and use the term “closed-loop,” which is more entangled with the

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philosophy of CE, unlike the term “open.” semantically more linked to the linear economy concept. Overall, CLSC is clearly one of the driving forces in the CE concept. Nonetheless, several constraints were reported in the literature in order to highlight the weak point of such sustainable and profitable management systems. The objective of such an effort is to focalize the R&D effort on tackling those issues and optimizing the entire flow of raw, manufactured, used, and recovered resources in the supply chains. Fig. 1.3 depicts the main processes and limitations in CLSC. Two other major challenges are expected to face CLSC during its implementation, that is: (i) Building partnerships with competitors. Such a delicate endeavor is necessary to overcome tough obstacles to the full-scale implementation of CE. Finding common grounds to gradually build trust between current competitors is possible. But the real issue is to include environmental and social targets, with the obvious economic ones. This is indeed challenging because in the recent past, and within the linear system, numerous partnerships between “supposed”

Figure 1.3 Key processes and constraints in closed-loop supply chain. Data source Kumar S, Malegeant P. Strategic alliance in a closed-loop supply chain, a case of manufacturer and eco-non-profit organization. Technovation, 2006;26(10):1127e1135.

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competitors were established for market control and enhanced revenues, but at the expense of the environmental and/or social factor. One challenging mission of the holistic concept of CE is to deal with such delicate problems, and we shall get back to this important matter in the following chapters. (ii) The other is the challenge of how to handle the inherent uncertainty in the business environment (volatile resources prices, customer demands, and transportation costs) and solve the related SC design problem. The scientific effort in this context is focusing on the development of multiobjective, fuzzy, stochastic programming, and optimization models [138e140]. 1.3.3.2 Reverse logistics In the related literature, the notion of reverse logistics was intensively debated, and many definitions were proposed [141,142]. Conceptually, reverse logistics is part of the closed-loop supply chain management, consisting of both forward and reverse SCM schemes. Circular supply chains involving forward and reverse logistics could be adopted via a simple three-leveled model (including manufacturer, distributor, and consumer), or relatively more complex configurations. Graphical illustrations of both networks are illustrated in Fig. 1.4. The basic idea of reverse logistics is to enable and facilitate the flow of used products back to the original point of manufacturing or to other outlets able to reincorporate those products into related or completely different production systems. Key factors tend to affect the strategic network design of reverse logistics and the configuration of its value-added structure, including collection platforms, recovery methods, available infrastructure,

Figure 1.4 Forwardereverse logistics network: (A) three-leveled [143] and (B) multileveled configurations [144].

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the proper time and state to recover the product at the end of its “useful life,” and for what new “life” this product (or parts of it) is being upgraded or transformed? [145,146]. In an interesting article published in 2015, by the European Journal of Operational Research, Govindan and coauthors reviewed around 380 scientific papers related to the themes of reverse logistics and CLSC and provided interesting insights on the current limitations and future R&D perspectives [147]. The main gaps reported in this study are in reverse logistics and CLSC sectors such as network designing and planning, production planning, and inventory management, and decision making and performance evaluation.

1.4 Conclusions After relying on the fossil-based, waste-generating, and unsustainable linear economy model for many decades, a growing number of scientists, environmentalists, economists, politicians, and experts from different fields are, all unequivocally calling for an urgent shift to an alternative economic model to be able to deal with the pressing economic, environmental, and societal issues, on a global scale. In this context, many green and sustainable concepts were proposed including bioeconomy, green economy, industrial ecology, etc. Nonetheless, the implementation of these concepts on the ground revealed some inherent constraints affecting their sustainability, i.e., were they able to structurally integrate the socio-environmental factors along with the obvious objective of “sustainable economic growth”? [74,148]. The concept of circular economy has emerged, on the one hand, from the heated debates between scientists, researchers, industrialists, and other involved parties, and on the other, from the valuable feedbacks generated by the first implementation scenarios of “theoretically sustainable” business models and industrial systems. As shown in this chapter, CE emerged as a holistic, restorative, and resilient economic model, based on innovative designs for re-use of products and resources, efficient materials recovery strategies through closed-loop supply chains and reverse logistics. The main CE advantage is that it integrates sustainable economic growth (through circular and profitable economic and production systems, and low-carbon development strategies) with the sustainable development goals targeting environmental preservation and societal well-being, in an inherent, structural, and global manner [1,149,150].

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Nonetheless, CE is still in its infancy, in comparison with the current linear model. Thus, potential constraints need to be anticipated and targeted by researchers from around the world, first to be highlighted, and second to contribute in finding solutions to those limitations. Related R&D investigations and assessment studies are already being carried out [51,151], and it is crucial to promote such research effort in order to: (i) keep the valuable momentum behind CE thriving, (ii) Enable a smooth and quick transition from linear economy, (iii) Facilitate the development and expansion of CE networks, (iv) Ensure the execution of the circular principles on solid grounds via well-planned, efficiently designed and effectively implemented practices, and (v) Catalyze the progression toward a mature, fully efficiency, and globally adopted CE concept. Among the issues anticipated to constrain the progress and development of CE is still the unclear conceptual relationship between CE and sustainability. Such confusion could generate adverse outcomes on the global dissemination of the CE concept, and the performances of related supply chains, business models, and innovation systems [53]. It was also reported that, as an emerging concept, the CE concept needs to provide more evidence of its systemic capacities to enable the transition from unsustainable linear practices, along with additional information on the possible interactions and trade-offs between technological and socioinstitutional systems [152,153]. Both driving and limiting factors within CE and its various implementation schemes will be thoroughly discussed in the following two chapters, from both conceptual and practical perspectives.

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Further Reading [1] Rhodes CJ. Feeding and healing the world: through regenerative agriculture and permaculture. Science Progress 2012;95(4):345e446.