ISSUE BRIEF 07.29.21 Disentangling Circular Economy, Sustainability, and Waste Management Principles Rachel A. Meidl, LP.D., CHMM, Fellow in Energy and Environment With the introduction of circular economy to a regenerative circular system where the (CE) principles in major regions of the societal value of products, materials, and world, interest in the concept has increased resources is maximized over time. significantly in the past several years. It is Ubiquitously interwoven into the gaining momentum in the political, economic, decarbonization, energy transition, and and scientific fields and growing in popularity waste minimization narrative is the in corporate strategies. Local and national term “sustainability,” arguably the most governments—including China, Japan, misconstrued descriptor of the decade the U.K., France, Germany, Canada, the and oftentimes used in conjunction or Netherlands, Sweden, and Finland—are also synonymously with CE. Although there is a embracing CE principles. China, ostensibly relationship between sustainability and a CE, the global trailblazer in CE, has made circular these two concepts are vastly distinct. strategies a part of their national priorities since the early 2000s, recently releasing its 14th Five-Year Plan (2021-25).1 The concept SUSTAINABILITY: A SYSTEMS-LEVEL was introduced to the mainstream by the APPROACH Ellen MacArthur Foundation and is heavily Sustainability in its truest form is a systems- promoted by the European Union. Although level approach that considers the wide array the United States does not have a national of environmental, social, and economic CE strategy, the framework is trickling into A comprehensive factors associated with a process or product federal and state-level policy discussions understanding of the and assesses how they interact (Figure 2). It and finding its way into many corporate evaluates, as examples, geopolitics, impacts impact on the overall sustainability plans. to indigenous communities, sociotechnical system and of any The CE (Figure 1) is presumed to have capabilities, and other subdomains. The the potential to interrupt the current linear potential risk shifting is most commonly accepted definition seeks economy of unsustainable production, needed before an action, to reconcile economic development with the consumption, and waste generation by protection of society and the environment policy, or product is encouraging system innovation that through “development that meets the needs deemed sustainable. designs out waste, increases resource of the present without compromising the efficiency, keeps materials in use, and ability of future generations to meet their decouples growth from the consumption own needs.”3 of finite resources—thereby achieving a Sustainability involves quantifying and healthier balance between the economy, understanding the risks, trade-offs, and the environment, and society.2 The ultimate unintended consequences, from a life-cycle objective is to transition from today's linear perspective, across the entire value chain. arrangement of “take-make-use-dispose” This is what leads to long-term system RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 07.29.21 FIGURE 1 — CIRCULAR ECONOMY Responsible extraction SOURCING MANUFACTURING • Material manufacturers • Convertors • Material selection • Brand owners • Agriculture • Manufacturers Incineration Employment Resillience DISTRIBUTION RECYCLING Growth Skills • Distribution warehousing • Collection • Retail and wholesale • Remanufacturing USE • New leasing and shared economy business model RESOURCE EFFICIENCY • Procurers and contractors • Repair • Reuse SOURCE Author’s rendition balance. There is very little understanding impacts that span the life cycle of the or application of this in today’s policies lithium-ion battery that powers the and decision-making. Although there is an vehicle—from mining, processing, smelting, environmental dimension, sustainability trade, and transportation across the globally is far more complex than simply focusing networked supply chain to the lack of on conservation/preservation, choosing recycling and reuse options for the battery presumed eco-friendly options, or switching at its end of life. The geopolitics and human to alternative energies. A comprehensive rights violations involved in such processes, understanding of the impact on the overall as well as the potential of operating in system and of any potential risk shifting is sensitive environments and collaborating Circularity in and needed before an action, policy, or product with corrupt regimes that have weak or of itself does not is deemed sustainable. absent environmental, safety, and labor guarantee positive Theoretically, sustainability is not a laws, can also undoubtedly affect a system’s property of something. Things in isolation overall sustainability profile. social, economic, cannot be sustainable (i.e., paper straws, This scenario is why sustainability and environmental solar panels, electric vehicles, etc.). imparts such a distorted and complicated performance Sustainability is a feature of a system in challenge to our existing utilitarian (i.e., sustainability). its entirety, not a singular focus on any structure, because traditionally, we individual part. It embodies how the parts exercise a very systematic and diagnostic interrelate to enable effective overall method to management and policymaking. outcomes.4 The relationship between a We disassemble, dissect, and examine complete system and its environment is systems into their constituent components, what gives rise to large-scale balance and, analyze and aggregate the parts, and through this understanding, avoids risk then attempt to synthesize and optimize, shifting and unintended consequences. From assuming that if all the portions are a sustainability perspective, individual parts seemingly functioning, the whole is cannot be optimized without optimizing the effective.5 This superficially plausible whole. For example, an electric vehicle is not façade emerges when a limited perspective sustainable if we factor in the unquantified of sustainability is leveraged, and it 2 and unaccounted social and environmental ultimately inhibits systems balance. DISENTANGLING CIRCULAR ECONOMY, SUSTAINABILITY, AND WASTE MANAGEMENT PRINCIPLES FIGURE 2 — SUSTAINABILITY: A SYSTEMS-LEVEL APPROACH SOCIAL SOCIAL-ENVIRONMENT Quality of Life Unemployment Rate SOCIAL-ECONOMIC Environmental Justice Respect for the Individual Fair Trade Local and Global Natural Resources Equal Opportunity Workers’ Rights Stewardship Education Business Ethics Legislation and Regulation Standard of Living Social & Community Climate Change Outreach Programs Sponsorships Crisis Management Human Rights ECONOMIC ENVIRONMENT Consistent, Profitable Growth SUSTAINABILITY Energy Consumption Cost Savings An integrated approach to environmental, Risk Management Natural Resources social & economic impact issues Permit & License Compliance R&D Spending (internal and external) leads to long-term, Environmental Management Total Shareholder Return Air Emissions Organizational Value sustainable balance and profit growth Pollution Prevention Profit Margin Water/Chemical Usage Employment Distribution and Discharges by Sector Revenue by Sector ENVIRONMENTAL-ECONOMIC Energy and Resources Efficiency Subsidies/Incentives for use of Natural Resources Global Energy Issues SOURCE Author’s rendition Although applying a reductionist or the impacts of a changing climate. approach that optimizes individual segments Sustainability, mediated by innovation, is important in many circumstances can enable a CE, and a CE can be a means (e.g., determining operational and process or stepping stone toward the alignment efficiencies and identifying bottlenecks between the three dimensions of or redundancies), sustainability—in the sustainability.7 absolute sense—involves designing and However, circularity in and of itself does managing for the whole system.6 In not guarantee positive social, economic, assessing something as complex as an entire and environmental performance (i.e., economy or global supply chain, it becomes sustainability). Just as sustainability can even more critical to understand how the be misrepresented, a CE is accompanied components synchronize and integrate by vast versatility, wide-ranging scope into the whole network. Focusing solely on and applications, definitional ambiguities, the individual parts invariably shifts risks disparities, and conceptual uncertainties. elsewhere in the system, thus yielding This makes it challenging to compare unsustainable and undesirable outcomes. with its linear counterparts and can result in a partial, convoluted, or erroneous depiction of circularity—especially since the HOW DOES A CE RELATE TO boundaries and application of a CE can be SUSTAINABILITY? employed at the product or process level, within an organization, and at the local, A CE provides the economic system with an regional, national, or global scale for both alternative flow model that is cyclical and public and private sectors. regenerative by design and builds resilience Sustainability of CE strategies should against future disruptions—like pandemics, be uniformly and consistently measured extreme and punctuated weather events, 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 07.29.21 against their linear counterparts to identify sustainability could be challenging—if not and avoid actions that are favorable to and impossible—to