Economy in circles

Circular Economy (CE) has become a hot topic. A new ISO Technical Committee, ISO TC323, will now seek to standardise the terms and measurement indicators for CE, and its four Working Groups have started drafting text for new standards. From 2.-0 LCA consultants, we are taking active part in this international standardisation work, as we have previously done for Life Cycle Assessment (LCA).

One of the topics that are now debated is the relationship between LCA and CE. This month, the UNEP Life Cycle Initiative published a position paper on this topic.

The position paper reminds us that Circular Economy (CE) originally was a concept coined by Pearce & Turner (1990) as an economy where wastes are recycled into resources, either through a technological feedback mechanism or through a natural ecosystem feedback mechanism, so that the stock of resources is constant or increasing over time. In other words, a circular economy is a sustainable economy. However, in the current interpretations and implementations of CE strategies, a narrower view is sometimes taken, focussing on specific physical resources, assuming that these resources are the most valuable area of protection, ignoring other resources or impacts. 

LCA has the intention to avoid burden shifting between different life cycle stages or between different resources or impacts. It can therefore be argued that LCA applied to CE strategies should be able to prevent CE strategies from overlooking potential upstream and downstream impacts, and looking beyond specific resources to a more holistic assessment of the biophysical, social and economic effects of a decision.

However, also LCA is often applied with a too narrow perspective, and the position paper highlights a number of preconditions for LCA to play the desired role:

  • Consistent accounting for changes in stocks of resources respecting mass balance principles.
  • Consistent modelling of open recycling loops.
  • The inclusion of all relevant resources and impacts, i.e. a full economy-wide Life Cycle Sustainability Assessment perspective.
  • Transparency of assumptions, reliability of data, and critical interpretation of results and trade-offs between a globally agreed numbers of impact categories, e.g. through valuation, as suggested in ISO 14008.

For both LCA and CE, it may be more economical to circle back to the original intentions and definitions, than to spiral down blind alleys of simplified interpretations and applications.


Pearce D W, Turner P K. (1990). The economics of natural resources and the environment. Hemel Hempstead: Harvester Wheatsheaf London 378 pp.

Claudia Peña C, Civit B, Gallego-Schmid A , Druckman A, Caldeira- Pires A , Weidema B, Mieras E , Wang F , Fava J , Milà i Canals L , Cordella M, Arbuckle P, Valdivia S, Fallaha S , Motta W (2020). Using Life Cycle Assessment to achieve a circular economy. Position Paper of the Life Cycle Initiative, July