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National Interests: Priorities and Security
 

Circular economy: A theoretical model and implementation effects

Vol. 14, Iss. 8, AUGUST 2018

PDF  Article PDF Version

Received: 28 March 2018

Received in revised form: 22 April 2018

Accepted: 16 May 2018

Available online: 15 August 2018

Subject Heading: SUSTAINABLE DEVELOPMENT OF ECONOMY

JEL Classification: P48, Q01

Pages: 1415–1429

https://doi.org/10.24891/ni.14.8.1415

Val'ko D.V. South Ural Institute of Management and Economics, Chelyabinsk, Russian Federation
valkodv@inueco.ru

https://orcid.org/0000-0002-8058-7539

Importance The article provides a theoretical insight into the concept of circular economy today and predicted effects of its implementation globally.
Objectives I analyze possible effects for the society, environment and economy that arise from the global implementation of the circular economy concept in the long run.
Methods Based on a systems and analytical approach, I perform a meta-research into the architecture and specifics of the circular economic mechanism in comparison with the linear one, and conditions and consequences of transition from the latter to the former depending on the economic development level.
Results The implementation of the circular economy concept not only alleviates the environmental footprint but also reduces the dependence of economic growth on production of primary resources and their import, boosts the demand in the existing markets, expands the IT sector and contributes to the comprehensive development of infrastructure. To adopt the circular economy system, there should be comprehensive overall changes in the conventional economic mechanism. Furthermore, using the institute of environmental reputation and adaptive governmental policy, enterprises and governmental authorities are supposed to cooperate. Such approaches help attain stable results in transit economies. The approaches may be implemented even at the current phase of development by adapting fiscal systems.
Conclusions and Relevance Principles of the behavioral economy concept should be integrated as part of further researches into gradual institutional and economic transformations of transit economies pursuing the circular economic course. Practical steps should lead to departure from the possession of resources to a joint access to them and their circular usage.

Keywords: circular economy, closed-loop supply chains, waste management, recycling, remanufacturing, social effect, environmental effect, economic effect

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