PSYCHOLOGY Game our

COMMENT ECONOMICS How China has ECO-DESIGN Three case CONSERVATION Czech national
emotions about ownership to driven businesses to reuse studies of circular park under threat from
reduce consumption p.438 each other’s waste p.440 manufacturing p.443 development pressures p.448

W
hen my battered 1969 Toyota
UMICORE

car approached the age of 30,

I decided that her body deserved
to be remanufactured. After 2 months and
100 hours of work, she returned home in
her original beauty. “I am so glad you finally
bought a new car,” my neighbour remarked.
Quality is still associated with newness not
with caring; long-term use as undesirable,
not resourceful.
Cycles, such as of water and nutrients,
abound in nature — discards become
resources for others. Yet humans continue to
‘make, use, dispose’. One-third of plastic waste
globally is not collected or managed1.
There is an alternative. A ‘circular
economy’ would turn goods that are at the
end of their service life into resources for
others, closing loops in industrial ecosystems
and minimizing waste (see ‘Closing loops’).
It would change economic logic because it
replaces production with sufficiency: reuse
what you can, recycle what cannot be reused,
repair what is broken, remanufacture what
cannot be repaired. A study of seven Euro-
pean nations found that a shift to a circular
economy would reduce each nation’s green-
house-gas emissions by up to 70% and grow
its workforce by about 4% — the ultimate low-
carbon economy (see go.nature.com/biecsc).
The concept grew out of the idea of substi-
tuting manpower for energy, first described
40 years ago in a report2 to the European
Commission by me and Geneviève Reday-
Mulvey while we were at the Battelle Research
Centre in Geneva, Switzerland. The early
1970s saw rising energy prices and high
unemployment. As an architect, I knew that
it took more labour and fewer resources to
refurbish buildings than to erect new ones.
The principle is true for any stock or capi-
tal, from mobile phones to arable land and
cultural heritage.
Circular-economy business models fall
in two groups: those that foster reuse and
Workers at Umicore in Brussels separate out precious metals from electronic waste. extend service life through repair, remanu-

Circular economy
facture, upgrades and retrofits; and those
that turn old goods into as-new resources by
recycling the materials. People — of all ages
and skills — are central to the model. Own-
ership gives way to stewardship; consumers
A new relationship with our goods and materials become users and creators3. The remanu-
facturing and repair of old goods, build-
would save resources and energy and create local jobs, ings and infrastructure creates skilled jobs
explains Walter R. Stahel. in local workshops. The experiences of

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 COMMENT

workers from the past are instrumental.

Yet a lack of familiarity and fear of the CLOSING LOOPS
unknown mean that the circular-economy Using resources for the longest time possible could cut some nations’ emissions by
up to 70%, increase their workforces by 4% and greatly lessen waste.
idea has been slow to gain traction. As a holis-
tic concept, it collides with the silo structures
of academia, companies and administra- USE DISTRIBUTION
tions. For economists who work with gross Is controlled by Ownership
domestic product (GDP), creating wealth by buyer-owner-consumers transfers from
of goods, or by fleet manufacturer to
making things last is the opposite of what they managers who retain consumer at
learned in school. GDP measures a financial ownership and sell point of sale.
flow over a period of time; circular economy

ANUFACTURE
goods as services.
preserves physical stocks. But concerns over
resource security, ethics and safety as well as
greenhouse-gas reductions are shifting our

EM
approach to seeing materials as assets to be

,R
preserved, rather than continually consumed.

IR
A
In the past decade, South Korea, China EP
,R
REUSE Resource losses
and the United States have started research INNOVATION partly recoverable
programmes to foster circular economies by Research is needed to
by industrial
symbioses.
boosting remanufacturing and reuse. Europe transform used goods
is taking baby steps. The Swedish Founda- into ‘as-new’ and to
TAKE
tion for Strategic Environmental Research
recycle atoms.
RE
-BACK
OF GOODS MANUFACTURING
CY
(Mistra) and the EU Horizon 2020 pro- C LE
Renewing used
products lessens
gramme published their first call for circular- the need to make
economy proposals in 2014. The European originals from
Commission submitted a Circular Economy EXTRACTED RESOURCES scratch.

Package to the European Parliament last Water, energy and natural resources
enter the manufacturing process.
December. Since 2010, the Ellen MacArthur
Foundation, founded by the round-the-world
yachtswoman, has been boosting awareness SYSTEMS THINKING A performance economy goes a step

ADAPTED FROM KNOWLEDGE TRANSFER NETWORK

of the idea in manufacturers and policymak- There are three kinds of industrial economy: further by selling goods (or molecules) as
ers. And circular-economy concepts have linear, circular and performance. services through rent, lease and share busi-
been successfully applied on small scales A linear economy flows like a river, turn- ness models4,5. The manufacturer retains
since the 1990s in eco-industrial parks such ing natural resources into base materials and ownership of the product and its embodied
as the Kalundborg Symbiosis in Denmark, products for sale through a series of value- resources and thus carries the responsibility
and in companies that include Xerox (sell- adding steps. At the point of sale, owner- for the costs of risks and waste. In addition to
ing modular goods as services), Caterpillar ship and liability for risks and waste pass design and reuse, the performance economy
(remanufacturing used diesel engines) and to the buyer (who is now owner and user). focuses on solutions instead of products, and
USM Modular Furniture. Selling services The owner decides whether old tyres will makes its profits from sufficiency, such as
rather than goods is familiar in hotels and in be reused or recycled — as sandals, ropes or waste prevention.
public transport; it needs to become main- bumpers — or dumped. The linear economy For example, Michelin has since 2007 sold
stream in the consumer realm. is driven by ‘bigger-better-faster-safer’ syn- tyre use ‘by the mile’ to operators of vehicle
Few researchers are taking note. Excellence drome — in other words, fashion, emotion fleets. The company has developed mobile
in metallurgical and chemical sciences is a and progress. It is efficient at overcoming workshops to repair and regroove tyres at
precondition for a circular economy to suc- scarcity, but profligate at using resources in clients’ premises and aims to develop prod-
ceed. Yet there is too little research on find- often-saturated markets. Companies make ucts with longer service lives. Worn tyres are
ing ways to disassemble material blends at money by selling high volumes of cheap and sent to Michelin’s regional plants for retread-
the atomic level. The body of a modern car sexy goods. ing and reuse. The Swiss company Elite uses
incorporates more than a dozen steel and A circular economy is like a lake. The the same strategy for hotel mattresses, and
aluminium alloys, each of which needs to be reprocessing of goods and materials gener- textile-leasing companies offer uniforms,
retrieved. ates jobs and saves energy while reducing hotel and hospital textiles and industrial
Circular-economy knowledge is concen- resource consumption and waste. Cleaning wipes as a service.
trated in big industries and dispersed across a glass bottle and using it again is faster and Conventional waste management is
small–medium enterprises (SMEs). It must cheaper than recycling the glass or making driven by minimizing the costs of collection
be brought into academic and vocational a new bottle from minerals. Vehicle owners and disposal — landfill versus recycling
training. A broad ‘bottom up’ movement will can decide whether to have their used tyres or incineration. In a circular economy, the
emerge only if SMEs can hire graduates who repaired or regrooved or whether to buy new objective is to maximize value at each point
have the economic and technical know-how or retreaded replacements — if such services in a product’s life. New jobs will be created
to change business models. Governments exist. Rather than being dumped, used tyres and systems are needed at each step.
and regulators should adapt policy levers, are collected by waste managers and sold to Commercial markets and collection points
including taxation, to promote a circular the highest bidder. are needed for users and manufacturers to
economy in industry. And scientists should take back, bring back or buy back discarded
scan the horizon for innovations that could
be patented and licensed to pave the way for
THE CIRCULAR ECONOMY garments, bottles, furniture, computer equip-
ment and building components. Goods that
A Nature special issue
greater leaps in splitting up molecules to can be reused may be cleaned and re-mar-
nature.com/thecirculareconomy
recycle atoms. keted; recyclables are dismantled and the

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 COMMENT

spaces throughout Paris. Such business

models jeopardize the fundamentals of the
linear economy — ownership, fashion and
emotion — and raise fears in competing
companies. For example, car manufactur-
ers’ strengths of mass production, patented
technologies in combustion engines and
gearboxes, big investments in robotic facto-
ries and global supply and marketing chains
are of little use when competing with local
Autolib services.
Public procurement can exploit the
potential of the performance economy. Yet
despite some successes, governments remain
hesitant. NASA decided a decade ago to buy
space transport services, leading to start-up
companies such as SpaceX competing for
contracts using innovative, cheap and reus-
able equipment. Assigning maintenance costs
to the private constructor of the Millau Via-
duct in the south of France led the tenderer,
Eiffage Construction, to develop a structure
that could be erected quickly and would have
minimal maintenance and liability costs over
its 75-year service life.

TIPPING POINTS
Autolib car-sharing schemes free users from the demands of ownership. Realizing a circular economy will take
concerted action on several fronts.
parts are classified according to their residual InterContinental hotel in Tokyo was Research and innovation are needed at
GONZALO FUENTES/REUTERS

value. Worn parts are sold for remanufactur- demolished in 2014 beneath a ‘turban’ that all levels — social, technological and com-
ing, broken ones for recycling. These markets was lowered hydraulically floor by floor to mercial. Economists and environmental
used to be common — milk and beer bottles minimize noise and dust emissions. A verti- and materials scientists need to assess the
and old iron were once collected regularly cal shaft with a goods lift in the middle of ecological impacts and costs and benefits of
from homes. Some have re-emerged as digi- the building allowed the deconstructors to products. Designing products for reuse needs
tal global market places, such as eBay. recover components and sort materials while to become the norm, making use of modu-
Professional marketplaces (perhaps using the lift as a generator. lar systems and standardized components,
online) also need to be set up for the Services liberate users from the burden of for instance6. More research is needed to
exchange of used parts, such as electric ownership and maintenance and give them convince businesses and governments that a
motors, bearings and microchips. Even flexibility. Exam- circular economy is feasible.
components of liquid waste, such as lubri- “We will ples include: ‘power Communication and information
cation and cooking oils or phosphorus from need new by the hour’ for jet strategies are needed to raise the awareness
sewage, can be refined and resold. Scientists technologies to and gas turbines; of manufacturers and the public about their
should re-market rather than dump their de-polymerize, bike and car rentals; responsibility for products throughout their
used kit. de-alloy, laundromats and service lives. For instance, it should be fash-
Stewardship rules are needed for used de-laminate, machine-hire shops. ion magazines, not science journals, that bang
goods. Austria is a world leader in this area. de-vulcanize Fleet managers ben- the drum about jewellery sharing, leased jeans
Collecting and reusing ‘waste’ are labour and de-coat efit from resource and rental designer handbags.
intensive and expensive, but they have been materials.” security — the goods Policymakers should use ‘resource-miser’
fostered in the nation through taxation of today become the indicators such as value-per-weight and
changes and by recouping costs through resources of tomorrow at yesterday’s prices. labour-input-per-weight ratios rather than
re-marketing rather than scrapping parts. Covering the costs of risk and waste within GDP. Policies should focus on performance,
The ultimate goal is to recycle atoms. the price of use or hire provides economic not hardware; internalization of external
This is already done for some metals. The incentives to prevent loss and waste over the costs, such as emissions and pollution, should
Brussels-based company Umicore extracts lifetimes of systems and products. be rewarded; stewardship should overrule
gold and copper from electronic waste. The ownership and its right to destroy. The Inter-
Swiss firm Batrec removes zinc and ferro- SOCIETAL TREND net of Things (in which everyday objects are
manganese from batteries. These processes The circular economy is part of a trend digitally connected) and Industry 4.0 (intel-
are energy-intensive and recover the metals towards intelligent decentralization — wit- ligent technical systems for mass produc-
only partly. To close the recovery loop we ness 3D printing, mass customization of tion) will boost such a shift, but also demand
will need new technologies to de-polymer- manufacturing, ‘labs-on-a-chip’ in chemis- a policy review that considers questions of
ize, de-alloy, de-laminate, de-vulcanize and try and functional services. The French car- ownership and liability of data and goods7,8.
de-coat materials. sharing service Autolib offers people flexible, Policies9 should promote activities that are
Methods and equipment are needed hassle-free urban mobility by using small desired by society and punish those that are
to deconstruct infrastructure and high- electric cars that have low maintenance costs not. Taxes should be raised on the consump-
rise buildings. For example, the ANA and can be recharged in reserved parking tion of non-renewable resources, not on

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 COMMENT

renewable resources including human

labour. Value-added tax (VAT) should
be levied on value-added activities, such
as mining, construction and manufactur-
ing, but not on value-preserving stock
management activities such as reuse,
repair and remanufacture. Carbon credits
should be given to emissions prevention
at the same rate as to reduction.
Societal wealth and well-being should
be measured in stock instead of flow, in
capital instead of sales. Growth then
corresponds to a rise in the quality and
quantity of all stocks — natural, cultural,
human and manufactured. For exam-
ple, sustainable forestry management
augments natural capital, deforestation
destroys it; recovering phosphorus or
metals from waste streams maintains
natural capital, but dumping it increases
pollution; retrofitting buildings reduces
energy consumption and increases the
quality of built stock10.
Marrying the three types of economy
is a formidable challenge. A shift in
policy focus from protecting the envi-
ronment to promoting business models
that are based on full ownership and
liability, and that are unlimited in time,
rather than imposing a two-year war-
ranty for manufacturing quality, could
transform a nation’s competitiveness. ■ Stalls known as mtumbas (‘second-hand’ in Swahili) in Nairobi sell repurposed goods, many from the West.

Make recycled
Walter R. Stahel is founder and director
of the Product-Life Institute in Geneva,
Switzerland. He is also a member of the
Club of Rome and a visiting professor at

goods covetable
the Faculty of Engineering and Physical
Sciences, University of Surrey, UK.
e-mail: wrstahel2014@gmail.com
1. Ellen MacArthur Foundation, World Economic
Forum and McKinsey & Company. The New
Plastics Economy: Rethinking the Future of
Plastics (Ellen MacArthur Foundation, 2016).
To reduce consumption and waste we must overcome
2. Stahel, W. R. & Reday-Mulvey, G. Jobs for
Tomorrow: The Potential for Substituting
our squeamishness about repurposing pre-owned
Manpower for Energy ((Vantage Press, 1981).
3. Stahel, W. R. in The Circular Economy — A
possessions, says Bruce Hood.
Wealth of Flows (ed. Webster, K.) 86–103

H
(Ellen MacArthur Foundation, 2015).
4. Stahel, W. R. The Performance Economy umans are unique in the animal but the most ascetic among us, it is important
KELLYRANCK.COM

(Palgrave, 2006). kingdom in their capacity for to some degree what others think about our
5. Stahel, W. R. in Handbook of Performability
Engineering (ed. Misra, K. B.) Ch. 10, 127–138 materialism. We make, use and trade choice of gadgets, car, décor or clothing.
(Springer, 2008). objects for their symbolic value as much as These mores of ownership inform the value
6. Stahel, W. R. in Our Fragile World: Challenges their functionality. One of the earliest exam- that we assign fakes or those who own them.
and Opportunities for Sustainable Development
Vol. II (ed. Tolba, M. K.) Ch. 30, 1553–1568 ples of such artefacts— a piece of carved ochre When it comes to second-hand goods, most
(UNESCO/EOLSS, 2001). found in the Blombos Cave in South Africa of us care about who previously handled them
7. Giarini, O. & Stahel, W. R. The Limits to — dates from at least 70,000 years ago. Pos- and what they were used for — we would
Certainty, Facing Risks in the New Service
Economy (Kluwer, 1989). sessions are extensions of our selves. Beyond rather wear the clothing of a beloved celebrity
8. Stahel, W. R. in The Industrial Green Game: making tools, we adorn ourselves and bury than a murderer. We reverently hand down
Implications for Environmental Design and our dead with objects. great-grandma’s costume jewellery to the next
Management (ed. Richards, D. J.) Ch. 4,
91–100 (National Academy Press, 1997).
Objects have social significance. Through generation, but toss last season’s bling from
9. Stahel, W. R. Phil. Trans. R. Soc. A 371, them we signal our identity and status to
20110567 (2013).
10. Stahel, W. R. & Clift, R. in Taking Stock
others. Marketing experts know that belong-
ings convey aspirations that owners wish to
THE CIRCULAR ECONOMY
of Industrial Ecology (eds Clift, R. &
display to others. Designer goods have cachet
A Nature special issue
Druckman, A.) Ch. 7, 137–158 (Springer, nature.com/thecirculareconomy
2016). because of their expense or exclusivity. To all

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