The circular economy (CE) is heralded as reducing material use and emissions while providing
more jobs and growth. We explored this narrative in a series of expert workshops,
basing ourselves on theories, methods and findings from science fields such as global environmental
input-output analysis, business modelling, industrial organisation, innovation
sciences and transition studies. Our findings indicate that this dominant narrative suffers
from at least three inconvenient truths. First, CE can lead to loss of GDP. Each doubling
of product lifetimes will halve the related industrial production, while the required design
changes may cost little. Second, the same mechanism can create losses of production
jobs. This may not be compensated by extra maintenance, repair or refurbishing activities.
Finally, ‘Product-as-a-Service’ business models supported by platform technologies
are crucial for a CE transition. But by transforming consumers from owners to users, they
lose independence and do not share in any value enhancement of assets (e.g., houses). As
shown by Uber and AirBNB, platforms tend to concentrate power and value with providers,
dramatically affecting the distribution of wealth. The real win-win potential of circularity
is that the same societal welfare may be achieved with less production and fewer
working hours, resulting in more leisure time. But it is perfectly possible that powerful
platform providers capture most added value and channel that to their elite owners, at the
expense of the purchasing power of ordinary people working fewer hours. Similar undesirable
distributional effects may occur at the global scale: the service economies in the
Global North may benefit from the additional repair and refurbishment activities, while
economies in the Global South that are more oriented towards primary production will
see these activities shrink. It is essential that CE research comes to grips with such effects.
Furthermore, governance approaches mitigating unfair distribution of power and value are
hence essential for a successful circularity transition.
