The paper argues that circular economy strategies may complement climate policies importantly by forwarding a vision and a credible pathway to achieving resource efficient, low carbon sustainable production and consumption patterns. Such patterns make up the circular economy characterized by a high retention and recovery of resources.
The circular economy is only in its emerging stages, both in the Global North and in the Global South. Using evolutionary innovation theory, it is suggested to define the circular paradigm as pursuing a resource efficient technological trajectory, whereas the linear economy prevailing hitherto, has been following a wasteful technological trajectory. In the latter, it is legitimate and common practice to waste resources by using them sub-optimally. In the former, resources are systematically sought utilized at their highest possible level throughout the economy. Reuse, refurbishment, recycling and sharing of resources are core features. However, there is much friction in switching from a linear to circular economy. The paper highlights the many emerging radical policies from EU which aims ambitiously to guide the development of circular products in their entire lifecycle. Much stronger incentives are made for companies to pursue circular product innovation. We are hence in a critical stage in circular transformation. The paper warns that sometimes green solutions are wrongly termed circular without following circular economy principles but rather a wasteful trajectory.
The paper argues that Global South countries have opportunities for leapfrogging into the circular economy, taking advantage of the lower switching costs they have relative to the Global North countries.