The circular economy concept has embraced many of the important aspects of both industrial ecology and closed loop supply chains, and combined these with current trends; from upcycling, to the sharing economy, to servitisation.
Interestingly, the circular economy does not only share its focus but also its oversights with closed loop supply chains and industrial ecology: the strong product focus easily distracts from other environmental problems, e.g. the one of increased transportation needs, and thereby increased transportation emissions. Furthermore, the sole attention to eco-efficiency can itself be
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counterproductive. Hertwich (2005) even talks of a “backfire effect” when efficiencies have resulted in cheaper prices, fueling an actual increase in demand, more consumption, and more waste. The potential to extend the life spans and intensify the utilization of products is key not only as an answer to this problem, but also to enable their sharing. At the same time, it is a question of societal acceptance, which innovations, and which sharing models prevail (Kramer & Belz, 2008). But even when it comes to upcycling, the question is whether the new upcycled products cannibalize the use of old ones. In other words, new trends open up to new questions and new criticisms as well. For example, aspects of the sharing economy are already under fire from the perspective of taxation, and even the potential discrimination of users.
Despite the circular economy embracing many societal trends, yet another criticism prevails across closed loop supply chains, industrial ecology, and the circular economy: Due to their strong emphasis on the ecology, they tend to be detached from their social and community contexts (Winans et al., 2017).
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