From barriers to solutions: an ensemble ranking-based framework for circular economy adoption

From barriers to solutions: an ensemble ranking-based framework for circular economy adoption

Abstract

Several governments and organizations have embraced the Circular Economy model to promote sustainable economic development. While implementing the Circular Economy, organizations face various barriers that hamper their adoption. In this regard, this study investigates the various barriers to Circular Economy adoption and their overcoming solutions. Therefore, this study proposes a robust framework for assessing Circular Economy adoption barriers and their overcoming solutions. The proposed framework is grounded on the half-quadratic based ensemble ranking to prioritize the solutions by considering Circular Economy barriers. Twenty barriers to Circular Economy adoption and their solutions are identified through Systematic Literature Review and domain expert input. These identified barriers are prioritized using the Best Worst Method. Further, the identified solutions are also prioritized using Technique for Order of Preference by Similarity to Ideal Solution, Weighted Aggregated Sum Product Assessment, and Combined Compromise Solution methods. An HQ-based ensemble ranking that is more robust and reliable is employed to obtain the aggregated rank of these solutions. Based on the aggregated rank, "top management consciousness and participation," "consumer awareness," "develop the Circular Economy business model," "alignment of Circular Economy goals with strategic objectives," and "reward and appreciation policies for Circular Economy" five most effective solutions for Circular Economy adoption. The findings suggest that organizations need to employ high-ranking solutions on a priority basis for Circular Economy adoption. The finding is also helpful for an organization that seeks Circular Economy adoption, especially in developing countries. Further, the proposed framework helps managers and policymakers assess the barriers and solutions for adopting Circular Economy in their context.

One Introduction

Rising populations, economic growth, and increasing consumption have intensified the exploitation of natural resources, leading to higher input costs, environmental pollution, and sustainability challenges. Despite these pressures, many organizations still depend on the linear model, which generates waste, depletes resources, and harms the environment. To address these issues, the Circular Economy has emerged as a sustainable alternative, aiming to minimize waste, reduce resource scarcity, and support economic growth. The recent circularity report indicates that the volume of resource extraction and utilization over the past six years has exceeded the cumulative total of such activities throughout the entire twentieth century. Therefore, several countries are making concerted efforts to transition from a linear economy to Circular Economy. For example, the European Commission introduced a Circular Economy strategy and action plan aimed at "closing the loop," China introduced a Circular Economy promotion law, and India constituted a circular economy cell for fostering the Circular Economy principles in various sectors. Decoupling economic growth from resource exploitation and promoting the creation of sustainable economic systems that guarantee ecological survival requires a shift towards a Circular Economy. However, the circularity report shows that the percentage of the world economy that follows circular principles is just seven point two percent, and it has been progressively falling over time. The global industrial ecosystem has mostly failed to integrate the central idea of a Circular Economy despite tremendous efforts to promote sustainable development goals.

Designed to be restorative and regenerative, the Circular Economy approach delivers benefits in terms of cost reduction, environmental sustainability, and waste minimization. Used items such as apparel and electronics products are refurbished and sold again on the secondary market, extending their lives and supporting the Circular Economy. Circular Economy can be a panacea for several environmental and sustainability problems, especially in developing countries. Mostly, developing countries rely on a linear economy to fulfil their needs by extracting many natural resources and generating waste in the same proposition. For example, according to the Central Pollution Control Board, India generates more than sixty-two million tonnes of waste each year, of which about seventy percent (approximately forty-three million tonnes) is collected. However, only around twelve million tonnes of the collected waste is treated, while the remaining thirty-one million tonnes is disposed of in landfills. Waste generation is projected to reach one hundred sixty-five million tonnes by two thousand thirty. Therefore, it is imperative to establish robust mechanisms for repairing, remanufacturing, and recycling products. As a result, the product cost can be reduced (economics), pollution can be minimized (environment) through recycling, and the environment can be protected through "non-discard" behavior, along with providing low-cost recycled products to the local community (social). In spite of the acclaimed Circular Economy potential, its adoption remains underperformed in contemporary industries located in developing economies.

Literature on Circular Economy adoption in business suggests a variety of reasons or barriers for the slow adoption of Circular Economy. These barriers emerge from various perspectives such as management, cultural, technological and many more. Therefore, getting a comprehensive insight into barriers that impede or slow the transition to a Circular Economy is vital. Developed countries like the United States, the European Union, Denmark, the Netherlands, Japan, Italy, and other developed countries have well-established Circular Economy practices that are continuously refined to enhance overall Circular Economy adoption. In contrast, the Circular Economy adoption remains concealed in countries like India, largely due to its vast population and huge waste generated. Furthermore, the Circular Economy practices are inadequate, primarily due to limited awareness and insufficient technological advancements in developing countries. The literature suggests that significant scientific work has been done on Circular Economy adoption in the context of developed countries, and a few attempts have been made to identify the barriers in emerging economies. Considering the importance of Circular Economy-related barriers, a systematic study must be conducted to identify and analyze Circular Economy barriers in the context of emerging nations. The identification of the barriers provides only half of the solution to Circular Economy adoption; therefore, it is also important to propose solutions to overcome these identified barriers. Overcoming these barriers is essential to effectively adopt the Circular Economy practices and ensure a successful transition towards sustainability. Barriers can slow down or completely block progress toward Circular Economy transition. Therefore, solutions need to be developed to streamline the Circular Economy initiatives and ensure progress towards Circular Economy. The proposed solutions help managers and policymakers to overcome these barriers during Circular Economy implementation. Therefore, a systematic approach is required to investigate Circular Economy barriers that hamper their adoption and find solutions to overcome these barriers.

Several studies have focused on investigating the barriers and their overcoming solutions using various tools. Businesses are not able to implement all aspects of the Circular Economy simultaneously, so attempting to overcome all barriers at once would be a resource waste. Hence, there is a need for a systematic analysis specific to Circular Economy barriers and their solutions. The use of relatively new methods in making decisions has become increasingly important in recent years to achieve an accurate assessment. Organizations will be able to better deal with barriers to Circular Economy adoption by understanding the nature of these barriers and finding solutions to overcome them. Thus, the paper proposes a robust framework for identifying and assessing various barriers to Circular Economy adoption and develops solutions for addressing them. In this regard, the present study establishes the following research objectives:

To identify the CE adoption barriers and their overcoming solutions.

To propose a MCDM based framework for analyzing the barriers and solutions.

To prioritize the barriers and solutions using the proposed framework in the context of emerging economies.

A framework is proposed to address the above research objectives. Initially, SLR and expert feedback were used to identify CE adoption barriers and their potential solutions in the context of emerging economies. These barriers and solutions are ranked by using multi-criteria decision-making method. Further HQ-based aggregation is used to determine the final ranking of solutions.