Aveneu Park, Starling, Australia

As of four different functions, identified by

As a forerunner to the theoretical framework of circular economy, the utility of the environment for humans through an economic perspective will be explained. This utility can be measured in terms of four different functions, identified by Pierce and Turner (1990). Below, these four functions and their linkages will be presented.1. Amenity values: Those are the pleasures that the environment offers directly to humans without interference from the economic system. This includes the beauty of landscapes, weather conditions, and the existence of different species that humans accord some sense of value.2. Resource base: Both renewable and non-renewable resources provide inputs for the economy. Renewable resources, such as fish stocks, can be harvested for economic purposes and as long the harvest does not exceed the annual limits, this will have no or very little impact impact on the environment. For non-renewable resources such as fossil fuels, the physical stock will be depleted over time. However, depletion is also possible for renewable resources.3. Sink: The environment also functions as a waste bin for the residuals of economic activity such as waterborne-, airborne-, and solid-emissions. When the environment’s capacity for receiving residuals is exceeded, a negative environmental impact can occur (e.g. air pollution or water pollution).4. Life-support system: This function basically acknowledges that the inherent biological character of the environment works as a life-support system for all life. This can be influenced by certain economic activities (Andersen, 2006, p. 135)Because of the interrelationship between them, these four functions should not be viewed as isolated functions. For instance, if residuals discharged to the environment exceed the assimilative capacity, it can cause a negative impact not only on amenity values and the life-support functions but also from the point of view of the economic system. However, circular10economy has the potential to postpone the loss of residual materials in the economic system by reuse and recycling.3.1.2 Linear EconomyTo put circular economy in context, the linear economy will be briefly explained. Until recently, the global world economy has been focusing on the short-term linear model for production and consumption (Ellen MacArthur Foundation, 2015). This efficiency-based model is known for its ‘take, make, dispose’-constellation of resources such as materials and energy but the model is said to be reaching its limits (Ellen MacArthur Foundation, 2017, p. 1).