The Contested Circle – Part 2: Green Growth’s Illusion: Why Efficiency Alone Cannot Sustain the System

The Ideological Comfort of Decoupling

The circular economy has ascended to the forefront of global policy, business, and research agendas, largely predicated on a powerful and comforting narrative: that of sustainable growth. This narrative, often dubbed “Green Growth,” promises a win-win outcome where economic growth and environmental preservation are successfully reconciled, allowing the economy to hum nicely without wrecking the planet. The appeal is immense, suggesting that humanity can decouple economic activity from resource consumption and environmental impact simply by becoming more efficient and innovative.

However, critics argue that this ideological framing is misleading. By positioning the circular economy as a path to sustainable growth, the agenda risks becoming dominated by technical and economic accounts, overlooking deep structural issues. This approach often results in the depoliticization of sustainable growth, presenting the shift as a managerial, technocratic, matter-of-fact issue that bypasses necessary political conflict and radical changes to the underlying capitalist order. Consequently, the concept is criticized for offering uncertain contributions to sustainability and being far less promising than its advocates claim.

The Thesis of Systemic Critique: Efficiency’s Fatal Flaw

The central argument of critical scholars is that the mainstream circular economy, by prioritizing efficiency and maintaining the continuous pursuit of economic growth, fails to challenge the fundamental causes of unsustainability. The core tension lies in the belief that endless economic expansion, even if made “green,” can be ecologically harmless.

This critique asserts that circularity, if implemented within a growth-based capitalist system, risks becoming a theoretically, practically, and ideologically questionable notion. Ultimately, technological efficiency improvements alone cannot deliver strong sustainability if overall consumption and resource throughput continue to rise unchecked.

The Analytical Core: Mechanism, Theory, and the Iron Law of Physics

The Depoliticization of Environmental Action

The narrative surrounding the circular economy has frequently been identified as supporting a deliberately vague and principally uncontroversial policy. This vagueness, perceived as a strength by policy-making actors, promotes a consensual win-win policy that is difficult to criticize, despite the lack of actual consensus on the magnitude of economic, social, and environmental benefits. By focusing almost exclusively on conflict-free solutions, initiatives that address the conflicts, trade-offs, and deep problems inherent in abandoning the linear economy are overlooked.

Critiques emphasize how the circular economy framework depoliticizes interventions across policy, industry, and even consumption roles. It is often presented as a technocratic or eco-modernist agenda, excluding alternative solutions that might challenge the current capitalist order. The consequence of this management and technocentric bias is a noticeable absence of socio-cultural and political issues, leading to the risk of merely displacing problems across time and space rather than achieving genuine resolution. By focusing on resource and waste recapture, the circular economy retains its status as an economic growth project that underplays the fundamental demand for continuous consumption.

The Crucible of Context: Economics, Psychology, and the Rebound Effect

The Jevon’s Paradox and the Consumption Trap

One of the most significant unresolved issues for the circular economy is the potential for the rebound effect, also known as Jevon’s Paradox. This phenomenon dictates that efficiency improvements, such as enhanced recycling or material savings, can lower the overall cost of a product or service, thereby stimulating increased consumption and usage that ultimately offsets or even reverses the initial environmental savings.

The psychological element reinforces this economic mechanism. The circular economy is often used as a reassuring discourse for policymakers and consumers, suggesting a future of planned circularity where consumption becomes unproblematic because materials are ostensibly recycled. This “green gloss” can trigger a consumer rebound, where the marketing of secondary products and the perception of a product being “circular” or “green by design” represses critical impulses and may even increase the demand for consumption. Paradoxically, considering waste as a resource may unintentionally increase the demand for waste rather than drive down volumes.

The ultimate result is that all potential gains from material efficiency and recycling can be “eaten up” by increased consumption, leading to wider material loops and expanded demand for recycled materials between cities and countries. This highlights a fundamental weakness: efficiency strategies, characteristic of the CE, are often insufficient if they are not complemented by sufficiency-based policies aimed at reducing overall material throughput.

Ideological Fetishism and Corporate Control

Critics view the circular economy narrative as inherently wedded to neo-classical and conventional economics, placing undue trust in the efficiency of markets and corporations as the primary driving forces. This corporate-led model encourages a “reboot for capitalism” that requires no radical change to institutions, markets, or infrastructures.

This leads to the paradox of commodity fetishism, where the shiny, green label of a circular product—such as an “iPhone being circular or green by design”—distracts the consumer from questioning the reality of how the product was manufactured, the labor conditions involved, and the inherent wasting involved in its production. Companies strategically use circular initiatives, such as H&M’s clothing return initiatives or Apple’s recycling robot ‘Liam,’ to preempt material policies and make them amenable to corporate interests. The circular economy offers corporations the opportunity to regain control over resources, such as waste streams, and simultaneously further drive the consumption of their products, thus obscuring the practices that lead to vast amounts of waste in the first place.

Cascade of Effects: Exclusion, Limits, and the Need for Sufficiency

The Social Equality Gap

A major criticism of the circular economy is its pronounced neglect of the social pillar of sustainability. Because engineering and natural sciences often lay the ground for the knowledge base, the concept shows little focus on socio-ethical issues like inter- and intra-generational equity, gender equality, or financial equality. The CE is frequently all but silent on what a circular economic society might look like and neglects issues of power asymmetries and political constraints.

If the transition is not guided by strong social concerns, there is an overwhelming risk that social concerns will be ignored, leading to winners and losers. For example, the focus on technical efficiency often overshadows the vulnerability of workers in resource recovery sectors. Critiques stress that the concept must be strengthened to take sociopolitical issues seriously, shifting away from a narrow focus on technical flow management to address who benefits and who might be harmed by circularity.

Sufficiency as the Necessary Counterbalance

To address the limitations imposed by physics and the consumption trap created by the rebound effect, many critics argue for the integration of sufficiency principles. Sufficiency fundamentally rejects the goal of endless economic growth, advocating instead for reduced overall consumption and production, particularly in wealthy countries, to ensure human well-being within planetary boundaries.

While the mainstream CE sees waste as a resource for generating more growth, sufficiency asks, “What is enough for a good life?”. This perspective introduces alternative priorities, moving beyond mere monetary value to focus on socio-ecological value and prioritizing non-market solutions. This sufficiency-based thinking would lead to solutions such as designing for less speed, tackling planned obsolescence through regulation, restricting advertising that fuels endless desire, and promoting community-based resource management.

Conclusion: Bridging Efficiency and Sufficiency

The circular economy, while fundamentally superior to the linear model, is far from being the panacea its advocates sometimes claim. Its entanglement with the rhetoric of sustainable green growth, combined with its technocentric bias, leads to the depoliticization of deep environmental issues and risks succumbing to the Jevon’s Paradox. This ideological constraint creates a gap between the transformative language of circularity and the incremental nature of many actual policy outcomes.

To evolve into a truly sustainable and resilient framework, the circular economy must internalize its most potent critiques. This means moving beyond the illusion of infinite loops and recognizing that decoupling economic growth from environmental pressures must be achieved not only through efficiency (narrower, slower cycles) but through sufficiency (reduced throughput). This requires policy and business models to shift from merely managing material flows efficiently to actively addressing consumption patterns, systemic inertia, and the underlying growth obsession that drives the entire wasteful system. The next step in legitimizing the circular transition is to ground it in political and ethical clarity, ensuring it serves social equity alongside environmental health.