Circular Economy: Foundation and Theoretical Framework

The Circular Economy (CE) is a shift away from the conventional linear economic model, which is based on resource efficiency and waste minimization with regenerative systems. This chapter goes beyond descriptive overviews by synthesizing historical evolution, theoretical foundations, and practical applications of CE into a unified conceptual lens, highlighting how CE serves as both a sustainability paradigm and a systems- level economic framework. It charts the history of CE from early conceptual contributions, such as the 1972 Limits to Growth report, through formalization in the 1980s with the rise of industrial ecology and the inception of eco- efficiency in 2000. The chapter provides a brief review of key milestones in CE, from the Performance Economy to Cradle- to- Cradle design, emphasizing the extension of product lifetimes and recycling, culminating in overall closed- loop material flows. It also explores the role of the Ellen MacArthur Foundation, espousing the CE and linking it to worldwide sustainability objectives. Unlike prior reviews, the chapter contributes by critically integrating theoretical models with case- based insights and identifying underexplored challenges such as rebound effects, governance asymmetries, and socio- cultural resistance. It concludes with a discussion on the triple bottom line benefits (environmental, economic, and social) of CE, as well as the challenges that will be faced, including techno- flops, market dynamics, policy gaps, and cultural norms. Finally, it outlines how digital technologies and collaborative partnerships can provide transformative pathways, positioning CE as a cornerstone of future sustainability research and practice.