Connecting the Loops; A Systems Thinking Analysis and Identification of Process Shifts and its Consequential Costs in Swedish Circular Construction

Abstract

The construction sector is currently responsible for a significant portion of global resource extraction and greenhouse gas emissions. While the Circular Economy offers a pathway to decouple economic activity from environmental degradation, the transition from linear to circular models introduces significant operational complexities. Existing research has largely focused on technical feasibility and material flows, leaving a knowledge gap regarding how circular interventions reshape construction processes and influence economic dynamics in practice. This thesis investigates these processual shifts and cost implications within the context of Swedish new development projects. Using a Systems Thinking approach, the study analyzes three ongoing projects in Gothenburg. The Botanical Garden, Sonyas Culture House, and Gothenburg Grand Central, where White Arkitekter serves as a key design stakeholder. Data was collected through semi-structured interviews and analyzed using Causal Loop Diagrams to visualize the non-linear feedback loops between circular strategies, process changes, and costs. The findings reveal that circularity disrupts the traditional linear efficiency of construction, shifting the operational focus from production to early-stage planning, logistics, and verification. This shift generates significant "transaction costs" related to information search, risk management, and administrative friction. The study identifies that successful implementation relies on "organizational fit", large institutional actors benefit from standardized, supplier-led circularity to mitigate risk, while smaller, agile actors can leverage trust and experimental learning. Furthermore, the analysis demonstrates that while circularity often incurs higher upfront costs, these can be neutralized through financial leverage points, such as green bonds, or minimized through relational contracts that reduce uncertainty. The thesis concludes that for circular construction to scale, the industry must move beyond pilot projects to develop standardized market infrastructure and adopt relational governance models that account for the friction of circular flows.