Circular Economy: Theoretical basis and link to sustainable development

Abstract

The concept of the circular economy first appeared in 1989 to explain the transition from the traditional open economic system to the circular economic system as a consequence of the law of thermodynamics (Georgescu-Roegen, 1971).In this paper, we will outline the different definitions of the concept of the circular economy, then we will discuss the main theories that underpin this concept and finally we will put the spotlight on the relationship between the circular economy and sustainable development. The result of our literature review showed that Circular Economy, has been defined in several ways. Our theoretical analysis also shows that The roots of CE can be found in general systems theory and industrial ecology ( Ghisellini et al. 2016). Thus, the first theory was put forward by the German biologist Karl Ludwig von Bertalanffy (1950). This theory played a role in the emergence of a new scientific model based on the interrelation of the elements that make up systems. The second theory considers the industrial system as a living ecosystem (Billen et al., 1983). Finally, we found that several authors (Feng and Yan, 2007; Geng and Doberstein, 2008; Ness, 2008; Mathews and Tan, 2011; Naustdalslid, 2014) have considered the circular economy as a new economic business model that should lead to more sustainable development and a harmonious society.

Keywords: circular economy, literature review, theoretical approaches, sustainable development.

Classification JEL: Q01

Paper type: Theoretical Research