CE.20.005 – Power & Value in the Circular Economy

Route: Circular economy

Cluster question: 053 What are the features of a circular economy and how can we achieve it?

A hitherto unforeseen consequence of the transition to the circular economy is that the distribution of value, risk and responsibilities over different stakeholders in society will certainly be affected. A circular economy may heavily influence the power balance in society. In this research we would like to explore which consequences the circular economy could have on the distribution of wealth, income and power – and which choices we can make.

As an example, consider that Product-as-a-Service models will concentrate ownership of assets and resources in the hands of fewer companies. Consumers without possessions are vulnerable. Consequently, the circular economy can accelerate the tendency towards wealth concentration.

As another example, the circular economy requires extensive cooperation within global value chains. Sometimes investments are made in one part of the chain (e.g., product redesign), whereas the benefits are reaped elsewhere. How can investments and returns be coordinated? Especially considering the natural tendency for companies to accumulate as much value as possible for themselves. Simply put, companies have an incentive to look for business models that give them power over suppliers and customers. The circular transition may play into the hands of those that are already most powerful. Are there alternatives?

Analysis of these potential power distribution consequences has so far been invisible in the circular economy literature. At the same time, some consequences may not necessarily be desirable from a social order perspective. What is and what isn’t desirable is the domain of politics and public debate. Science, however, should provide the objective input for a reasoned debate, before we create a lock-in.

We aim to research these questions in practice with companies and other relevant stakeholders. We aim to identify possible consequences and formulate value chain models (not: business models) that describe different distributions of value, risks and responsibilities over different stakeholders.

Keywords

circular economy, Power balance, Value chain models, Wealth concentration

Other organisations

Het Groene Brein

Submitter

Organisation Universiteit Leiden (LEI)
Name Prof.dr. A. (Arnold) Tukker
E-mail tukker@cml.leidenuniv.nl
Website https://www.universiteitleiden.nl/en/staffmembers/a.-tukker#tab-1