The Circular Economy
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The Encyclopedia of Tourism Management and Marketing is, quite simply, the definitive reference work in the field. Carefully curated by leading tourism scholar Dimitrios Buhalis, this is the largest tourism management and marketing ontology that has ever been put together and offers a holistic examination of this interdisciplinary field This is a 4-volume set. Volume 1 contains entries A–D, Volume 2 contains entries E–I, Volume 3 contains entries J–R and Volume 4 contains entries S–Z. Page numbers start from 1 in each volume.

The circular economy (CE) model of economic production has been advocated as a long-term solution for eliminating the wasteful use of resources that occurs under the current linear economic production system based on the ‘take, make, use, dispose’ approach to resource use. CE emphasizes recycling, renewable energy and regenerative farming with the objective of promoting efficient management of global resources where production and consumption processes generate net zero (or close to) waste. The figure outlines these contrasting approaches to resource use. From a climate change perspective, adoption of the CE model offers considerable scope to reduce greenhouse gas (GHG) emissions and meet the challenge of decarbonizing the atmosphere. The CE paradigm has attracted considerable interest from policy makers, business and the academic community, and has emerged as a credible framework for rethinking the relationship between resource use and economic modes of production and consumption (Geissdoerfer et al., 2017) and as a pathway to achieve carbon neutrality. To date, there has been very limited research into the application of CE principles in the tourism sector (Sørensen and Bærenholdt, 2020).

Some authors have described CE in terms of the 6Rs of reuse, recycle, redesign, remanufacture, reduce and recover (Vargas-Sánchez, 2018). The Ellen MacArthur Foundation, a leading advocate of the circular economy approach, has defined CE as ‘an industrial economy that is restorative or regenerative by intention and design’ (Ellen MacArthur Foundation, 2013, p. 7). In a more comprehensive definition, Geissdoerfer et al. (2017, p. 759) describe CE as a ‘regenerative system in which resource input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing material and energy loops. This can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling’. At its p. 489simplest, circular economy is about keeping value in the economy.

The core principle of CE involves closing the current open-loop structure of resource use and moving to a closed-loop value chain structure that produces net zero waste. A resource loop describes the circling of materials from their extraction to their use and reuse (Bocken et al., 2016). The key principles for adoption of the CE approach include: to design out waste and pollution, to keep products and materials in use for the longest time, and to regenerate natural systems (Ellen McArthur Foundation, 2013). Closing resources loops results in less materials being wasted or discarded. From this perspective, the ‘take’ and ‘dispose’ elements of resource use in the linear economy are replaced by ‘reuse’ of resources through recycling, sharing, remanufacturing and refurbishing to create a closed-loop value chain that minimizes the use of new resources and reduces or eliminates pollution, waste and GHG emissions.

The CE approach does not preclude economic growth. Rather than depleting natural capital such as soils, ecosystems and water that play a crucial, but often undervalued, role in many economic and social activities (Ellen MacArthur Foundation, 2013; Lacy and Rutqvist, 2016), CE aims to generate business profit and economic growth, deliver benefits to consumers and radically increase resource productivity whilst also regenerating. To support a smooth transition to a circular economy, new ways of producing and using products and services are needed, which in turn require innovative business models (Bocken et al., 2016). By narrowing, slowing and closing resource loops, circular business models endeavour to transition towards a more sustainable way of producing, accessing and reusing goods. Such strategies will help companies capitalize value and maintain or improve their competitive position (Geissdoerfer, Vladimirova and Evans, 2018). In addition to providing a competitive advantage, benefits to businesses from adopting the circular economy model include job creation, reduced material, procurement and production costs, environmental benefits and reduced risk (Lacy and Rutqvist, 2016).

The circular economy aims to generate business profit and economic growth, deliver benefits to consumers, and radically increase resource productivity. The business sector has also begun to look for opportunities to benefit from CE. In 2018, the Platform for Accelerating the Circular Economy (PACE) was launched as a public–private partnership to advance the adoption of the CE. Initial membership of PACE includes the World Economic Forum (WEF), the United Nations Environment Programme (UNEP), private foundations and major private sector firms. The PACE approach initially targeted three areas: developing CE business models that can be used in developing and emerging countries; identifying barriers to implementing CE principles; and promoting private–public partnerships to achieve these measures. A CE standard (BS8001:2017) was published by the British Standards Institution in 2017 and included a list of definitions and management frameworks that provide guidance for implementing the CE. A number of enterprise-level circular business models have been suggested to assist businesses to adopt supply chains that narrow (efficiency improvements), close (extend resource value by designing systems in which products can be either reused, disassembled or recycled) and or dematerialize production cycles (Bocken et al., 2016).

A growing number of countries have indicated their intention to aim for carbon neutrality by 2050 as a solution to combating climate change. CE strategies are likely to play a major role in this process. Adoption of CE on both national and international scales will require significant public sector interventions that can be expected to include regulatory and financial interventions to ensure that targets for reuse, elimination of waste and energy reduction are achieved. Elimination of the drivers of wasteful resource will require new legislation at all levels of economic activity, including the international level. In support of the objective of elimination of the drivers of wasteful resources use, the European Union (EU) adopted the Circular Economy Package in 2015. China has also announced a range of policy objectives outlined in the Circular Economy Promotion Law to facilitate adoption of CE approaches. Compared to the EU concept of CE encouraging bottom-up change in environmental and waste management, the Chinese approach to CE is based on top-down national policy implementation (Vargas-Sánchez, 2018).

The CE provides an opportunity to overcome the current contradiction between tourism development based on exploitation of the environment and wasteful use of non-renewable resources with the need to maintain long-term environmental sustainability. Vargas-Sánchez (2018) suggests that adoption of CE principles will lead to new patterns of consumption where consumers will place increasing value on products designed and manufactured and later remanufactured to conform to CE principles. Change in consumer demand will have enormous implications for the supply side of the tourism industry, including the need to rethink business models and redesign supply chains. Early adoption of CE principles by all sectors of the tourism industry, including firms, destinations and transport, is currently inhibited by the regulatory vacuum that exists at national and global levels. Coordination across all sectors of the value chain and the adoption and implementation of internationally agreed standards at country level is required to overcome these problems.

p. 490Comparison of the linear and circular economy models

The consumptive nature of the tourism experience will also create problems for implementing the CE (Sørensen and Bærenholdt, 2020). Three levels of tourism value chains can be identified: the firm level, the destination level and the origin/destination transport level. Implementing a tourism CE will require changes at each level and will be guided by regulations imposed by governments designed to achieve carbon neutrality. At the firm level, early adoption of recycling technologies, switching to renewable energy and implementing guidelines such as the ISO BS8001:2017 standard will assist. A number of city destinations, including Copenhagen, Hamburg, Glasgow and Washington, have introduced carbon-neutrality targets (https://carbonneutralcities.org/) that will force their tourism sector to embrace CE principles. The transport sector will face major problems. While global adoption of renewable energy systems based on battery and green hydrogen offers workable solutions for land transport, the aviation sector will continue to face problems. Given the need to combat climate change and opportunities offered by the CE model, there is considerable scope to expand tourism-focused research in this area.

References

  • Bocken, N.M., De Pauw, I., Bakker, C. and Van der Grinten, B. (2016), ‘Product design and business model strategies for a circular economy’, Journal of Industrial and Production Engineering, 33 (5), 308320.

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  • Ellen MacArthur Foundation (2013), Towards the Circular Economy: Economic and Business Rational for an Accelerated Transition, accessed 3 May 2021 at https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf.

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  • Geissdoerfer, M., Savaget, P., Bocken, N.M. and Hultink, E.J. (2017), ‘The circular economy – a new sustainability paradigm?’, Journal of Cleaner Production, 143, 757768.

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  • Geissdoerfer, M., Vladimirova, D. and Evans, S. (2018), ‘Sustainable business model innovation: a review’, Journal of Cleaner Production, 198, 401416.

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  • Lacy, P. and Rutqvist, J. (2016), Waste to Wealth: The Circular Economy Advantage, Basingstoke: Palgrave Macmillan.

  • Sørensen, F. and Bærenholdt, J. (2020), ‘Tourism practices in the circular economy’, Annals of Tourism Research, 85, Article 103027.

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  • Vargas-Sánchez, A. (2018), ‘The unavoidable disruption of the circular economy in tourism’, Worldwide Hospitality and Tourism Themes, 10 (6), 652661.

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