Circular economy and decoupling fail – downscaling and degrowth key

Recently, several academic articles have questioned the circular economy (CE) concept on the grounds that it will not be able to decisively reduce environmental impacts as it operates in and supports economic growth. These “degrowth critiques of circular economy” argue that we need to change the way we utilise energy and materials more fundamentally to achieve necessary transformations. WHAT IS THE PROBLEM? In short: It is not possible to “circle” an economy out of growth (George et al., 2015). Both energy and material consumption are so tightly linked to economic activity (Wiedmann et al., 2015) that CE in its current form is not likely to be able to decouple this link. Efforts to increase resource efficiency have in the past not led to the desired reduction. This is because gains in efficiency tend to lead to the paradox situation that they increase consumption. This has been true for more than 150 years and is known as Jeavons’ Paradox (Bauwens, 2021). CE principally fails in preventing or mitigating this rebound effect (Corvellec et al., 2022). For example, money saved on leasing, renting, sharing, or pooling a product is likely to be spent on other, potentially more environmentally damaging activities (Hofmann, 2019). A panel data analysis of CE in 28 European countries indeed confirmed that economic growth in these countries was responsible for increasing resource extraction four times more than CE practices helped to reduce it (Bianchi and Cordella, 2023). As long as the stock of materials in buildings and infrastructure is growing, the extraction of primary resources will remain necessary, as the supply of recycled material will not be sufficient (Bianchi and Cordella, 2023). And even if an equilibrium could be achieved, i.e. a zero net-addition to stock situation where all new construction material demand is satisfied with secondary materials, non-recyclable materials such as fossil fuels and some biomass will still need to be extracted. This holds true for replacing fossil with renewable energy, since this requires an increased amount of metals and other materials, all of which will need to be extracted first. Due to the laws of thermodynamics, completely closed material loops will never be possible, i.e. virgin raw materials will always be needed, even to just keep the status quo, let alone grow economies (Corvellec et al., 2022). A complete substitution of conventional linear products is not only unlikely, it is impossible in principle. Hence what is needed is a deliberate downscaling of the linear economy and a redesigning of the circular economy to focus on the prevention of material use in the first place.