A system thinking approach to explain the outcome of circular economy implementations

Get Complete Project Material File(s) Now! »

Establishing an analytical framework

In this study, a theoretical explanation or hypotheses (Bryman, 2012) for how circular economy should be implemented to result in sustainable development is carried forward as “The sustainable development way of implementing circular economy”. This is done by combining a new, system thinking based conceptualization of circular economy with theoretical views on what affects if an implementation of circular economy can be facilitated and result in sustainable development.
To understand and define circular economy from a system thinking perspective, a new conceptualization of circular economy on the basis of system thinking were established. With system thinking and the model of the “iceberg” which suggests the society consist of events, patterns and systemic structures the purpose was to identify a new way of categorizing circular economy that would show how differently circular economy is implemented on different system levels.
To suggest a new conceptualization, literature were reviewed and analyzed qualitatively by content for the purpose of identifying common ways of defining circular economy as well as different implementations of circular economy. Different definitions and implementations of circular economy were defined, and each connected to three categories which were re-categorized over time.
The literary contributions that were included in the analysis are academic articles presenting research in which a large number of articles on the subject of circular economy have been reviewed. This has allowed for an inclusion of a lot of material that would otherwise not have been possible to include within the time frame of this study. The character of the articles as secondary sources poses an increased risk that the authors’ way of presenting their material has an impact on what definitions and implementations of circular economy have been put forward in the material, possibly affecting the conceptualization of circular economy that is provided in this study. The definitions and implementations identified in the literature were then combined with the model of the “iceberg” which resulted in a conceptualization of circular economy as a set of practices, an organizational structure or a way of reasoning. This way, the new categorization of circular economy has been grounded in theoretical contributions which increase the validity of the conceptualization of circular economy that is put forward in the study.
After circular economy had been conceptualized into three new categories; as a set of practices, an organizational structure and a way of reasoning, the different implementations of circular economy found in the literature review were coded and presented accordingly. The categorization reflects their potential to result in sustainable development from a system thinking perspective. The three categories represent different implementations of circular economy in terms of where they intervene in a system and accordingly in terms of their potential to result in sustainable development. After a review of literature that poses critique on the possibility for circular economy to result in sustainability, challenges were identified and analyzed from a system thinking perspective and with the new conceptualization of circular economy in mind. This way, the critique was connected to the different categories and implementations of circular economy rather than to the whole concept. The content analysis of critique towards circular economy contributes to the understanding of how circular economy should be implemented to result in sustainable development.
The outcome that can be expected from implementing circular economy as described in the different categories is explained theoretically with system thinking and with regards to the reliance on eco-innovations. These theoretical contributions in combination with the analysis of critique towards circular economy and the new conceptualization of circular economy add up to the establishing of an analytical framework that describes “The sustainable development way of implementing circular economy”.

Case study

The second part of the study is conducted as a case study in which the analytical framework that has been established in the study is applied to analyze the potential of an implementation circular economy to result in sustainable development. Case study data was collected with a multi-method approach by conducting interviews and by doing text analysis of public documents and other public information about ReTuna.
The sampling of interviewees and documents in the case study was purposive (Bryman, 2012) meaning they were chosen for the purpose of answering the research questions posed in the study. More material was added sequentially as new data that pointed towards the meaning of analyzing other data emerged in the interviews. To answer the questions posed in the study, data about what ReTuna is and what activities it consists of was needed as well as answers to why ReTuna was implemented. Second, data about what have contributed to make the implementation possible as well as what actors have been involved were needed. To withhold this data, information about ReTuna on the website of ReTuna, on the municipality’s website and on the municipal company EEM’s (Eskilstuna energi och miljö) website were first analyzed. Then, interviews were conducted with the manager of ReTuna, Anna Bergström, and an environmental strategist at the municipality who were involved when ReTuna was established, Lars Wiklund. The Eskilstuna municipality’s waste plan was also reviewed.
The interviews were semi-structured interviews conducted by phone. The lengths of the interviews were about 30 minutes each and questions were asked about what ReTuna is, how and why it exists and what has contributed to its existence. In addition to this, questions were asked about the municipality’s, as well as other actors’ role in the existence and implementation of Retuna. The data used in the case study mostly provided a view of what ReTuna is from the eyes of the interviewees. By conducting more interviews or doing an observational study, the analysis might have taken another direction. On the other hand, the interviewees that were chosen for the study are probably among the people who have the most knowledge about what ReTuna is and what it consist of since they are running the organization daily and were involved in the implementation phase respectively. It also gave insight in the future of plans of ReTuna. The view they give of what ReTuna is and consist of is though a subjective and perhaps a bit partial one. It could be interesting to include how local citizens or visitors to ReTuna perceive what ReTuna is or how the business managers would describe ReTuna. By doing an observational study the information provided by the interviewees about what ReTuna is could be double-checked as a way of interpreting the objectivity of the interviewees’ responses.
The texts and documents that were studied were analyzed by content. A qualitative content analysis signifies “ a searching-out of underlying themes” (Bryman, 2012:557) and in this study the theme was circular economy by reflection of ReTuna with special attention given to the system thinking conceptualization of circular economy.
The data withheld in the case study was presented and structured in accordance with the categorization made of circular economy implementations from a system thinking perspective. Data was analyzed and presented in regards to how ReTuna reflects implementations that can be fitted into one of the three categories. An analysis of what contextual factors that have contributed to the existence of ReTuna is also made from the data withheld. Lastly, the results of the case study analysis are discussed in terms of how the implementation of ReTuna corresponds to the analytical framework presented in the study.

Critical review of research design

It is valuable to conduct qualitative research due to the opportunity it gives to provide explanations and descriptions of things (Bryman, 2012). Also, it provides the opportunity to understand the context and settings of the case studied. By describing and understanding contextual details, information that would not have been made accessible with quantitative methods are made visible. For the purpose of this study the qualitative approach makes it possible to understand the small parts and details of the implementation of ReTuna which is necessary to analyze in order to understand what it is that makes ReTuna an implementation that reflects “The sustainable development way of implementing circular economy” or not. A risk when describing the details of things is to become too subjective and allowing underlying meanings and understandings of things inform the result (Bryman, 2012). To make sure the analysis of the implementation of ReTuna remained objective, a framework well-grounded in theory were used to identify what types of circular economy ReTuna reflects. Including other material in the development of the theoretic framework might have given other results but the theoretical contributions that have formed the understanding of what “The sustainable development way of implementing circular economy” is are explicitly reviewed for throughout the presentation of the study clarifying what findings are made and why.
Qualitative research is also criticized for bringing about results that are hard to generalize (Bryman, 2012). For this study, being a description of one particular case, the ability to contribute with generalizations is improved due to the detailed analysis carried out. The details about the context explain the setting and help to understand why the results are what they are. This makes it possible to use parts of the results in other contexts, being aware of what has contributed to and affected the results. The reliability of the results could be improved by enlarging the study by including more data material in the case study and literature contributions to the conceptualization of circular economy.

Implementing circular economy from an eco-innovations perspective

Some say circular economy is a way of delivering a new industrial revolution (de Jesus & Mendonça, 2018) It represents a transition that will change the system of production and consumption as well as how communities function, maybe the entire economic system. At the core of the proposed systemic shift of society are eco-innovations that have the potential to deliver value for human and nature simultaneously, that way contributing to the goal of sustainable development (Prieto-Sandoval et al, 2018; de Jesus & Mendonça, 2018; European Union, 2015). In de Jesus and Mendonça’s words, eco-innovations are “new or improved socio-technological solutions that preserve resources, mitigate environmental degradation and /or allow recovery of value from substances already in use in the economy” (de Jesus & Mendonça, 2018:77). The eco-innovations should be systemic and contribute to the creation of new functional systems that enables a holistic transformation of society in order to result in an eco-centric type of sustainable development (European Union, 2015).
The eco-innovations acquired to facilitate the move forward for circular economy are according to Prieto- Sandoval et al. ranging from product- and process innovations, business model and service innovations, organizational and network innovations to market innovations as well as customer engagement innovations (Prieto-Sandoval et al., 2018). Process and product innovations refers to companies’ production patterns and business model and service innovations signify developing new ways for companies to create value as well as ways of decreasing ownership and enabling that products are used more than once by different people. Network innovations regard how companies can find ways of interacting and working in symbiosis with each other and organizational innovations signifies finding new ways of managing environmental strategy. Market innovations aim towards creating brand value and positioning certain products in the market and customer engagement innovations aim towards finding ways of meeting the needs and desires of customers (Prieto-Sandoval et al., 2018). In more general terms, eco-innovations are needed in the production and consumption system as well as in regulation and policy. For an implementation of circular economy to be successful, comprehensive and systemic eco-innovations that involve interaction between all actors in the system are to aim for (de Jesus & Mendonça, 2018). This is also emphasized in the EU-report ‘From niche to norm, suggestions by the group of experts on a systemic approach to eco-innovation to achieve a low-carbon, circular economy’ by stating: “Europe will need to focus more than ever on creating the right conditions for innovation, making necessary changes to the legislative landscape, and encouraging community engagement” (European Union, 2015:10).
The principles that inform the design of circular economy eco-innovations are the closing the loop principle and the 3R’s – reduce, reuse and recycle principle. These principles clarify the ideas behind circular economy and what circular economy aims to address.

READ  The higher education sector with specific reference to South Africa 

The principles of circular economy

As oppose to in the traditional linear economic system, characterized by a take-make-dispose mentality, materials and products are part of a closed loop system in the circular economic system. The closed loop frames many of the practices that circular economy consist of and strongly relates to waste management, a sector in which the concept of circular economy is of high relevance. Murray et al. concur that circular economy has its base in resource cycling and state that the circular economic principles frame different ways of keeping resources within their biochemical cycles for a longer time as well as to decrease the overall material use and output of waste (Murray et al., 2015). A circular flow of goods and materials, which the closed loop demonstrates, allows for a reduction in resource-extraction and minimized waste through activities such as reuse and recycling. Some materials are part of the biochemical cycle entailing extracted natural resources that should be returned to the system while others are part of a technological cycle. In the technological cycle the aim is to have the material circulate without generating waste. This puts pressure on industry and businesses to innovate new practices when designing their processes and products so that it happens in a way that does not generate waste nor has an impact on the environment in the production process (Murray, et al., 2015).
The circular economy cycle, as described by Prieto-Sandoval et al., starts with firms’ extraction of resources from the environment, followed by the transformation of resources into products and services. The products and services are then distributed to consumers in the market and after being used they are recovered in different ways (Prieto-Sandoval et al., 2018) . The cycle is turned into a closed loop by designing products and practices that are informed by the 3R principles, reduce, reuse and recycle. The 3R principles will now be further described.

The 3Rs principle – reuse, reduce and recycle

The 3Rs principles form a hierarchy describing how to treat resources and material in the circular economic system. It suggests prioritizing reduction followed by reuse and recycle of materials and aims towards a zero-waste ideal. The reduce principle refers to both input and output in the production processes. Reduction activities aim to reduce the input of energy and raw materials as well as the output of waste through efforts aiming to improve efficiency in the production and consumption chain (Ghisellini et al., 2016). Reusing products and goods in the same way as they were conceived to be used contributes to the avoidance of emissions and extraction of materials that would be connected with the production of entirely new goods. Reusing products is also environmentally beneficial in terms of decreased disposal of waste. Recycling decreases the amount of waste as well as the environmental impacts related to waste disposal. It is done by recovering and reprocessing waste materials into products or materials that will be used for the same or another purpose (Ghisellini et al., 2016). Although being the principle mostly referred to when addressing circular economy (Kirchher et al., 2017) recycling is the least sustainable of the 3R’s principles in regards to resource efficiency and profitability. All materials cannot be recycled too many times and some materials cannot be recycled at all. Also, due to the design of products some products are unrecyclable due to their material complexity and at other times the presence of contaminants and chemicals in products make them unrecyclable (Ghisellini et al., 2016:16). Despite this, many tend to define circular economy solely as recycling which according to Kirchher et al. denotes an entirely wrong understanding of circular economy (Kirchher et al., 2017). Understanding the concept differently in this way might have implications for what the potential benefits of circular economy implementations are.
In the following section the analysis of how circular economy is implemented differently depending on how it is defined is presented. With the system thinking perspective and the metaphor of the iceberg (Kim, 1999) the different ways the concept can be defined and understood will be elucidated. The different types of eco-innovations presented in the above section can be found in different implementations at different levels.

The tip of the iceberg – circular economic practices

When companies adopt new practices inspired by circular economy their aim is mainly to find ways of continuously creating value in a resource-scarce world (de Angelis, 2018) It can be explained as a response to institutional pressure meaning that adopting circular economic practices is a way of keeping customers happy or it can be a response to the threat of losing competitive advantage when the resources they use run out (de Angelis, 2018). Led by the principles of circular economy, businesses can find new sources for their competitive advantage allowing them to pursue their value-creation, only in a slightly different way. New practices can be adopted in production and on the consumption side as well in the way resources are returned which is mostly controlled in systems for waste management (Prieto-Sandoval et al., 2018).
The new practices that have emerged on the production side reaches from eco -design, green design or design for environment to cleaner production which aims to prevent pollution and reduce the use of toxics in design and production processes (Ghisellini et al., 2016). Part of the goal of these practices are to improve products in a way that considers if they can be dissembled and disposed of without environmental impacts as well as to make changes in the distribution and return, the durability and the reliability of products (Ghisellini et al., 2016). According to Ghisellini et al. design and production practices that aim towards this will result in environmentally friendly products of high quality and performance (Ghisellini et al., 2016). Prieto-Sandoval et al. turn focus to sustainable design strategies when discussing the practices adopted to implement circular economy and define them as catalyzers for forthcoming reduce, reuse and recycle of material and products (Prieto-Sandoval et al., 2018). Besides changing practices of design and production, businesses can also adopt new practices that aim towards affecting consumer choices. Such practices are for example to introduce labeling schemes that informs consumer choice pushing towards the consumption of products that have been produced with respect to the principles of circularity (Ghisellini et al., 2016). It can also be to adopt a business model that is based on sharing, lending or co-ownership of any kind which would require less extraction of resources since a smaller amount of products would have to be produced. The events of individuals deciding to consume responsibly are also an important reflection of circular economy as well are individuals’ choice to consume less, buy reused products or recycle (Huamao & Fengqi, 2007).
To summarize, the practices adopted by businesses or individuals that are guided by the principles of circular economy vary at scope and often require innovative measures. The adoption of these practices affect the single business or single individual but do not have a significant impact on other businesses, nature or society as a whole or whether an individual will consume in a similar way the next time. The practices are single events and do not necessarily relate to a pattern in society which means that the relative change that can be withheld by adopting single practices are low.

The formation of patterns – symbiotic networks that stipulate the events When the event of

one company adopting innovations inspired by circular economic principles has taken place there is not necessarily a notable change in the entire system. Although the company itself will change and maybe make a winning, the outcome for nature is small and neither is other companies affected, they can continue as usual. Since there are limitations to what one company can do on its own when it comes to the cycling of resources, industrial systems in the form of ecological industrial parks emerge which allows separate entities to collaborate with others. These symbiotic networks allow companies to exchange by-products and other resources between them and are a way of achieving increased economic and environmental benefits (Ghisellini et al., 2016). Making simultaneous usage of resources can help to decrease the input of material and energy in production processes as well as to decrease the output of waste. It allows companies to create higher value, both for themselves and for nature and society. Having companies and other entities working in symbiosis with each other improves the utilization of resources and contribute to the creation of a closed loop ecosystem inside an industrial park but the organization can also reach outside a park area or between parks (Huamao & Fengqi, 2007).
Industrial organization schemes can emerge spontaneously as bottom-up initiatives from companies themselves or top-down as a planning incentive from governments (Ghisellini et al., 2016). In China, eco-industrial parks have been politically incentivized as a solution to the problem of heavy pollution in industrial zones and entail working towards closed loops, the minimization of waste and overall eco-efficiency (Ghisellini et al., 2016). In other cases around the world collaboration between companies have emerged as a way of minimizing costs by making use of each other’s by products as well as a way to manage environmental regulations that otherwise would entail increasing costs and the environmental effects have appeared later as an additional benefit (Ghisellini et al., 2016). The economic incentives to organize industrial symbiosis networks are the direct as well as indirect economic benefits that can be withheld. First, costs are reduced directly by decreasing virgin material input and avoiding disposal fees and income is made from selling by-products as resources.

Table of contents :

1.1. Background
1.2. Aim and research questions
1.3. Disposition
2.1. Establishing an analytical framework
2.2. Case study
2.3. Critical review of research design
3.1. System thinking
3.2. Understanding circular economy
3.2.1. Implementing circular economy from an eco-innovations perspective
3.2.2 The principles of circular economy
4.1. The “iceberg” of circular economy
4.1.1. The tip of the iceberg – circular economic practices
4.1.2. The formation of patterns – symbiotic networks that stipulate the events
4.1.3. The emergence of a new way of reasoning about the economic system
5.1. A system thinking approach to explain the outcome of circular economy implementations
5.2. Drivers of and barriers for circular economy
5.3. The potential of circular economy to result in sustainable development
5.4. “The sustainable development way of implementing circular economy”
6.1. ReTuna as an expression of circular economy in Eskilstuna municipality
6.2. Contextual factors contributing to the implementation of ReTuna


Related Posts