The Circularity Paradox: The Rebound Effect, Governance, and the Limits of Corporate Sustainability

ABSTRACT The circular economy (CE), often celebrated as a sustainable panacea, faces increasing criticism due to the rebound effect (RE)—a paradoxical phenomenon in which efficiency gains indirectly lead to an increase in resource consumption. This study fills a relevant gap by analyzing, through a systematic review, how contemporary literature discusses the REs in circular strategies between 2015 and 2025. After screening the bibliographic portfolio, 75 relevant articles indexed in Scopus and Web of Science remained. The main results indicate that the RE is present in several circular strategies—such as reuse, recycling, remanufacturing, and rental models—and manifests itself through direct, indirect, psychological, and systemic mechanisms. Such effects are intensified by the absence of multilevel governance, appropriate indicators, and the diffusion of circular practices decoupled from cultural changes. The literature also points out that technological innovations, when devoid of regulation and sufficiency criteria, tend to legitimize overconsumption. The conclusion of the research reinforces that CE, if operated under a technocratic logic and based only on efficiency, runs the risk of reproducing the same unsustainable patterns of the linear model. Overcoming this paradox requires the articulation of robust governance, education for sufficiency, inclusive innovation, and specific metrics to monitor rebounds. As a groundbreaking contribution, this study proposes an original integrative framework—unparalleled in prior reviews—that dynamically interlinks circular strategies, RE types, conditioning factors, and mitigation instruments, drawing from an unprecedented multifactorial analysis of 75 articles to challenge the technocratic CE narrative and advance a regenerative, interdisciplinary agenda for true sustainability, with direct implications for policy, management, and future research.