Circular Economy and Broad Prosperity: Can sustainability go hand-in-hand with well-being?
This article is prepared by Asel Doranova, Tilburg University
In recent years, the concept of a circular economy (CE) has moved to the forefront of policy, academic, and business discussions. Touted as a transformative pathway to sustainability, Circular Economy challenges the traditional “take-make-dispose” model by promoting practices that keep resources in use for as long as possible — through reuse, repair, remanufacturing, and recycling. But as the circular economy gains traction, a key question arises: can it contribute not only to environmental goals but also to broad prosperity — the well-being of people and societies in the broadest sense? This article explores whether circular economy strategies can align with the principles of broad prosperity, including their economic, social, and environmental impacts, and what that means for the present (here and now), other regions (elsewhere), and future generations (later).
The urgency: Our growing resource footprint
Rising global population, industrial growth, and consumption have sharply increased the demand for natural resources. Global material extraction and waste generation have skyrocketed over the past century. Between 1900 and today, humanity released over 2,500 gigatonnes of waste and emissions into the environment — and a third of that occurred just between 2002 and 2015.
Source: Krausmann et al.(2018) From resource extraction to outflows of wastes and emissions: The socioeconomic metabolism of the global economy, 1900–2015, Global Environmental Change, Volume 52
Over the 20th century, the extraction of fossil fuels, minerals, and biomass multiplied, causing serious environmental pressures. (Steffen et al., 2015; Wackernagel et al., 2002) Studies show that while resource use grew more slowly in the 1970s and 1980s, it surged again in the early 2000s, outpacing population and economic growth. (Schandl et al., 2017) If current trends continue, we can expect global material demand to rise 2.5 times by 2050 (Krausmann et al., 2018). This with the risk of continuous growth of emissions and waste, as well as deterioration of the ecology and living conditions.
At the same time, there is the challenge of ensuring economic growth opportunities for developing countries and improving the economic and social well-being of their populations. Residents of economically advanced countries are also generally unwilling to compromise their prosperity and well-being. This underscores the dual challenge the world faces: how to secure a good quality of life and economic well-being for all, while staying within the planet’s ecological limits, as indicated in the chart below.
Source: based on Global Footprint Network (2009)
Is the Circular Economy a solution for Broad Prosperity
It has been widely argued that the circular economy offers multiple environmental and economic benefits. For instance, according to Lacy & Rutqvist (2015), Circular Economy could unlock $4.5 trillion in economic growth by 2030. Circular Economy strategies could reduce global greenhouse gas emissions by up to 39%, as reported by the World Resources Institute . The International Labour Organization (ILO) estimates that 6 million jobs could be created through circular activities such as recycling, repair, and remanufacturing.
Beyond the environmental benefits, CE can also make goods and services more accessible. Shared-use platforms, leasing models, and high-quality refurbished products can provide affordable alternatives to ownership. Locally rooted circular businesses often stimulate community-based innovation and entrepreneurship. For the Global South, the shift could also reduce the volume of waste exported from wealthier nations and incentivize cleaner production.
Despite its promise, the circular economy isn’t a silver bullet. In practice, circular strategies often involve trade-offs that are difficult to predict and manage.
Replacing fossil-based materials with bio-based alternatives, for example, may reduce carbon emissions, but can also drive deforestation and reduce food security in countries where agricultural land is already scarce. In the construction sector, reusing materials might be better for the environment, but it’s often more expensive than recycling, requiring labor-intensive disassembly that isn’t always feasible. Whether more circularity is always better than less circularity, is not so easy to determine in practice.
This raises an important question: can we assume that some of the “R-strategies” in the Circular Economy (CE) hierarchy are more conducive to promoting well-being and broad prosperity than others?
Intuitively, many of these R-strategies appear to challenge the conventional economic paradigm, which is fundamentally driven by growth in consumption and production. In contrast, the Circular Economy emphasizes reducing resource use, limiting production and consumption, and encouraging lifestyle changes—principles that align closely with the philosophies of Broad Prosperity, Wellbeing Economy and the Beyond GDP agenda.
Source: PBL / Netherlands Environmental Assessment Agency
Despite growing enthusiasm for the Circular Economy, several critical questions remain unresolved. Can the CE model deliver adequate levels of welfare, social and economic prosperity, and meaningful employment while simultaneously encouraging reduced consumption and production? How will the transition to CE affect lifestyles and individual well-being? What implications will this transition in the Global North—particularly in the European Union—have for the Global South, where many economies rely on exporting goods to the North? How many jobs will the CE create, and how many might it displace? Finally, can the transition to a Circular Economy be managed in a socially just way, both within the EU and globally?
Although definitive answers are still lacking, these questions are increasingly at the center of policy and research discourse on the future of sustainable economic systems.
Broad Prosperity, and how does Circular Economy fit in?
To evaluate CE in a broader context, we need to understand what Broad Prosperity means. Defined by Statistics Netherlands (CBS), Broad Prosperity includes everything that people value. The meaning of the concept is therefore much broader than that of material prosperity in the form of income and consumption. Broad Prosperity encompasses more than income or consumption. It includes health, education, personal development, environmental quality, safety, and social cohesion. Crucially, it considers how these values are experienced not only “here and now,” but also “elsewhere” in the world and “later” by future generations.
This multidimensional view of prosperity provides a more holistic lens through which to assess the real impact of circular strategies.
In the here and now, circular initiatives can support local well-being. Repair cafés and sharing platforms foster social interaction, build community ties, and make goods more affordable. On farms, circular practices like composting and crop rotation improve environmental health and can enhance productivity. Governments can play a key role here, adopting circular procurement policies and creating incentives for businesses to adopt CE practices. However, there are also risks. In regions where economies rely heavily on manufacturing or resource extraction, the shift to circularity can reduce demand and disrupt employment. Circular startups—while innovative—often face challenges in scaling up, and may be priced out by conventional competitors.
Looking elsewhere, circular economy policies in wealthy countries can have ripple effects. On the positive side, reducing e-waste exports can lessen the environmental and health burdens on lower-income nations. Sustainability standards can encourage cleaner production across supply chains. But these gains may be offset if circular practices in one region shift the environmental burden to another. The expansion of biofuel production in response to “green” policies has already led to deforestation and land-use conflicts in some developing countries.
From the future-oriented perspective of “later,” CE appears more promising. By preserving resources and reducing dependency on volatile supply chains, circular systems can improve long-term economic and environmental resilience. Yet even here, challenges remain. If the transition is poorly managed, and workers or regions are left behind, social tensions may emerge, and political support for the circular transition could weaken.
The employment puzzle
The employment impact of CE is often described as positive, but in reality, it’s more complicated. While new jobs are likely to emerge in recycling, repair, and sharing services, others will disappear—particularly in sectors like mining, conventional manufacturing, and agriculture.
The transition is also expected to transform existing jobs. Many will require new skills, calling for targeted retraining and education. Studies show that the net employment impact in Europe is expected to be slightly positive, but modest—especially when compared to other labor market trends such as automation and digitization. (Cambridge Econometrics, Trinomics, and ICF, 2018)
Ultimately, CE’s effect on employment will depend on how well societies manage the redistribution of work and opportunities.
Source: Cambridge Econometrics, Trinomics, and ICF (2018) The effect of the circular economy on the labour market in Europe, Report for the European Commission.
Source: ILO (2018) World Employment and Social Outlook 2018: Greening with jobs, International Labour Office – Geneva.
A Just Transition: making Circular Economy work for all
To ensure the circular transition supports broad prosperity, it must also be a just transition. This means recognizing and addressing the social dimensions of change.
Schröder, P. (2020) notes that applying just transition approaches to the circular economy is important for identifying which countries, sectors, communities and workforces may be adversely affected by the process, as well as for developing policies and programmes to support those at risk of being left behind. It also involves including relevant stakeholders in decision-making processes, and recognizing their rights.
Three types of justice – distribution, procedures and recognition – need to be taken into consideration when planning for and designing interventions to support the circular economy transition, raising important questions and principles for a just circular economy transition:
Distributive justice concerns access and rights to opportunities and resources (incl waste, by-products and secondary materials), and the impact on employment. It addresses questions: How will the burdens of transition be distributed? In which sectors and countries are jobs gained, and where are jobs lost? And who carries the burdens of the transition?
Procedural justice concerns inclusion/ exclusion in decision-making of various stakeholders, especially communities affected by the CE transition. It assures inclusion in discussions at an early stages and addresses the following questions: Who has influence, who decides, and who is involved? do all stakeholders have a seat at the table? And do all have adequate capabilities and skills to participate in the CE, voice ideas and concerns?
Recognition of rights in the context of CE can concern ownership rights over natural resources and land, rights to repair of products, and consumer protection rights. The relevant questions here are: How can competing development interests be resolved? And which institutions can guarantee recognition and protection of rights during the transition processes?
These questions are especially critical for small and marginalized communities, whose livelihoods may be affected by CE policies but who often have the least influence in shaping them.
Author of the photo is Kyle Wiens. Sourced from: https://pirg.org/articles/landmark-e-u-votes-advances-right-to-repair/
Conclusion
The circular economy offers real and necessary benefits, particularly in the realms of environmental sustainability and economic innovation. However, its contribution to broad prosperity—encompassing the holistic well-being of people and planet—depends greatly on how it is designed and implemented.
While policy and academic discussions often highlight the economic and environmental advantages of the circular economy, the social dimension remains comparatively underexplored. Employment impacts, especially job creation, have received significant attention. Yet, there is a notable lack of research into broader social outcomes—such as impacts on individual and community well-being, social equity, and quality of life.
Policymakers and practitioners must therefore avoid treating the circular economy as a one-size-fits-all solution. Instead, circular strategies must be tailored to local contexts, attuned to global interdependencies, and grounded in the needs and aspirations of both present and future generations.
True circularity goes beyond closing material loops—it is about widening access to opportunities, reducing structural inequalities, and rethinking systems so they serve people as much as they serve the planet. Advancing this vision will require not only bold policy and business innovation but also deeper, more inclusive research into how circular transformations shape—and are shaped by—societies at large.
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