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Circularity does not guarantee sustainability: Measurement with LCA and other methods is essential

By Amos Ncube, ESG Senior Sustainability Analyst

Circularity, and the concept of a circular economy, have emerged as important topics in recent years, and not just among sustainability practitioners. The broader policy and business communities are also taking an interest in the far-reaching potential of circularity, which the Ellen MacArthur Foundation defines as:

A systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution. It is based on three principles, driven by design: eliminate waste and pollution, circulate products and materials (at their highest value), and regenerate nature.

Of course, worthy goals and good principles do not necessarily translate into effective solutions, and in recent years, some authors have warned that increased circularity does not guarantee increased sustainability. That’s why a number of organizations, including ones I’ve been involved with, are developing ways of measuring circularity instead of assuming its benefits — because it’s difficult to manage what you have not measured.

The centrality of systems thinking to circularity makes trustworthy and wide-ranging metrics especially important. As Rachel Meidl of the Baker Institute at Rice University put it in a recent Forbes article [https://www.forbes.com/sites/t...], “Ensuring a successful transition to a sustainable [circular economy] requires a common understanding of and approach to circularity; an acknowledgment of circularity’s relationship and contributions to sustainability and long-standing waste management principles; and the ability to consistently measure and report at the microlevel (i.e., a single firm, product, or process) and macroscale (i.e., an entire enterprise; a local, regional, or national government; or even a global system).”

Indeed, as several colleagues and I argued in a recent publication [https://link.springer.com/content/pdf/10.1007/s43615-021-00019-y.pdf], before we can measure properly we also need clearer definitions of circular economy strategies, objectives, future states, and stakeholders’ needs, in order to develop multi-dimensional evaluations across different time and spatial scales, as well as multiple sustainability dimensions.

Methodologies like Life Cycle Assessment (LCA) and Sustainable Return on Investment (S-ROI) have proven their value and are widely used for evaluating aspects of sustainability projects on both micro and macro scales. And they can also be applied to measurement of environmental, economic, and social impacts from a circular economy perspective.

One example is a recent case study of biogas production from organic waste in Ontario [https://www.sciencedirect.com/science/article/pii/S2665972721000350]. My colleagues and I applied LCA to assess two upgrade options for an anaerobic digestion facility and found that a combined heat-and-power approach would have just half the impact of the renewable natural gas option. We were also able to confirm the positive efforts of diverting organic waste from landfills in reducing organic waste disposal impacts and improving the management of organic waste — useful insights from a circular economy perspective for project developers, policy makers and the scientific community.

There is also value in other methodologies, such as social Life Cycle Assessment (s-LCA), environmental Life Cycle Costing (eLCC), EMergy Accounting (EMA) and Sustainable Value Stream Mapping (Sus-VSM). Although these methods are optimized for linear production systems and have limitations when assessing circular systems and related feedback loops, my team in the EU-funded ReTraCE program explained in our Integrated Assessment of Sustainability Profiles in Circular Production Systems [http://www.retrace-itn.eu/wp-content/uploads/2020/10/ReTraCE-D2.1.pdf] that these limitations can be overcome by improving each one of the methods (e.g. improvement of calculation methods), by providing guidance on the selection of methods in different contexts, and by integrating the methods further.

Going forward, the system-level scale of circularity implies that its principles need to be implemented on a national or international level. The available tools include incentives, tax policies, fines, treaty-based regulations, collaborative waste management, and other methods to encourage and support behavioral changes among consumers and organizations.

This in turn implies a very large number of affected stakeholders, and the importance of clearly understanding their needs and values. S-ROI is particularly strong in this area, and LCA has much to offer as well, including its ability to assess impacts across supply chains.

One especially important measurement consideration is the so-called rebound effect, in which anticipated gains do not materialize due to behavioral changes.  The Jevons paradox, often cited in environmental economics circles, illustrates the interaction and feedback between increased circularity and sustainability, and the importance of measuring outcomes. For instance, developing more fuel-efficient cars may encourage people to travel longer distances or purchase bigger vehicles, and thus cancel out the envisioned reduction in fuel demand. Another example: increased recycling may decrease the extraction of virgin raw materials, but unintentionally promote increased consumption by making consumers aware that waste will be treated. Furthermore, if a market is saturated with recycled materials, it can lower the value of virgin raw materials and make them more economically appealing, thus re-intensifying their extraction in a cycle of unintended consequences.

In this context, it’s easy to see that the tools we use for measurement and monitoring of progress on circular economy initiatives must take a wide view and fairly balance the three pillars of sustainability (economic, environmental, and social aspects). One useful resource for anyone interested in the subject is this web page from the not-for-profit Circle Economy [https://www.circle-economy.com...], which offers overviews for businesses and policymakers, and several helpful reports on developmental metrics.

Researchers around the world are continuing to develop and test these tools and the next few years promise to bring important new approaches into the public eye; EarthShift Global is contributing to these efforts. If you are interested in learning more about circularity and measurement and how we can support your efforts, contact us.