Circular Economy (CE) is a system. A system comprises a variety of elements that are connected to each other for an explicit purpose1. CE “replace[s] the “end-of-life” concept with reducing, alternately reusing, recycling and recovering materials in production/distribution and consumption processes,”2 such that the waste of one process becomes inputs to the other. An example would be Patagonia’s Worn Wear Program. Through this program, Patagonia invites customers to trade in Patagonia clothing and gear for credit and apply the credit to buy used clothing and outdoor gear. Additionally, Patagonia holds events to fix broken gear, offer repair tips, and hold workshops to upcycle existing clothes. Further, they collect and recycle Patagonia products that have reached the end of life.
Patagonia’s example may imply that CE is a silver bullet for sustainability. However, orchestrating a CE, such as Patagonia’s program is far from simple. Others have noted that the circle metaphor in CE indicates a “promise of perfection, wholeness and eternity, but the simplicity of its grounding metaphor is misleading.”3
Orchestrating a CE is a complex endeavor because it involves a variety of actors, e.g., Patagonia’s Worn Wear program would involve customers, recycling facilities, upcycling experts, value chain actors that can facilitate customer trade-in and so forth. A variety of actors bring with them their interests, and the question of where the responsibility and cost lie for different elements of a CE. Further, CE is complex because it involves a variety of ways in which resources and waste could flow, feedback loops that affect such flow, and blockages in the way of resource flow.
One way to address this complexity is through systems thinking. We are taught to think analytically and linearly by reducing wholes to parts and predicting the relationship between parts. Systems thinking challenges this approach and instead asks for looking at the whole and the parts. It asks us to accept uncertainty, be comfortable with complexity, and engage in new ways of thinking and collaborating.
Systems thinking is based on a few key principles.