Defining and Measuring the Circular Economy: A Mathematical Approach

The circular economy literature lacks unambiguous definitions. We argue that a convenient solution to this problem consists of defining the circular economy as a function of a metric, departing from a well-defined material flow and value system. In particular, we propose a metric that is derived from maximizing the value to society of materials used in the production of commodities that provide services to consumers. Our metric can accommodate for recycling but also for alternative strategies like lifetime extension and new business models that intensify the productivity of commodities. Following our methodology, we provide unambiguous definitions for linear economy, circular economy, and circular economic growth.