European Circular Economy Stakeholder Platform

This paper reviews the existing literature on modelling the macroeconomic consequences of the transition to a circular economy. It provides insights into the current state of the art on modelling policies to improve resource efficiency and the transition to a circular economy by examining 24 modelling-based assessments of a circular economy transition. Four key conclusions emerge from this literature. First, most models find that a transition to a more circular economy – with an associated reduction in resource extraction and waste generation – could have an insignificant or even positive impact on aggregate macroeconomic outcomes. Second, all models highlight the potential re-allocation effects – both between sectors and regions – that the introduction of circular economy enabling policies could have. Third, certain types of macroeconomic model are more appropriate for assessing the transition than others, notably due to their accounting of interactions between sectors and macroeconomic feedbacks. Fourth, of the assumptions that are fed into these models – those concerning future rates of productivity growth, the substitutability between different material types, and future consumption patterns – are key determinants of model outcomes. 

Achieving the 2030 UN Sustainable Development Goals and Paris Agreement climate targets will hinge upon the global transition to a low-carbon circular economy. Replacing finite and fossil-based materials with responsibly managed renewable materials could decrease carbon emissions whilst reducing dependency on finite resources.

However, the role that renewable materials can play in the circular economy is often under-rated, and, so far, most of the conversation has focussed on biodegradability, instead of the role they could play in reuse, remanufacturing, and recycling streams. The aim of the Collaborative Project was to start a conversation on the role of renewables in the circular economy, and in order to do this, set out the opportunities and challenges that companies face when using/shifting to renewable materials today and propose a shared vision for the future.

In order to support public purchasers to leverage support for a transition to a circular economy, in October 2017 the European Commission published 'Public Procurement for a Circular Economy'. This brochure contains a range of good practice case studies as well as guidance on integrating circular economy principles into procurement.

This report is the result of a collaborative project which was carried out by members of the Circular Economy 100, a program curated by the Ellen MacArthur Foundation. The participants aimed to: (1) understand the implications of a circular economy on the business and financing models of companies; (2) determine how a transition to a circular economy can be supported and accelerated by the financial system; and (3) co-develop and share communication strategies and tools to make the transition clear and tangible to our colleagues, clients, and academics.

To support the transition to the circular economy, governance, regulations and business models will play a crucial role. More importantly, circular business models (CBMs) would allow the retention of an asset at its highest value over time and support enhancement of natural capital. Different CBMs will be required at different stages of a lifecycle of an asset and may work independently or collaboratively. Successful implementation of these business models will require action from designers, suppliers, service providers, contractors and end-of-life companies by sharing materials, systems, energy, as well as information and services.

The circular economy offers a new way of looking at the relationships between markets, customers and our use of resources. It uses innovative new business models and designs, disruptive technologies and reverse logistics to transform the current ‘take, make, dispose’ economic model. Circular initiatives work to three principles of designing out waste and pollution, keeping products and materials in use and regenerating natural systems. 

Highlighting that many retailers are already tapping into circular economy thinking, this report is the output of a Collaborative Project carried out by Arizona State University, Cranfield University, eBay, Kingfisher, PA Consulting, Philips, Stuffstr and Wrap to identify new ways of working to generate value, discover new business opportunities and reduce resource costs - strategies which fundamentally change the relationship these retailers have with customers.

All societies produce waste, though its characteristics and what happens to it depend on cultural, economic and political factors at local, national and global scales. New business models, technological innovations and social enterprise have the potential to reduce waste. Policymakers have a key role to play in supporting these efforts by fostering better communication between stakeholders; through regulation that prioritises reuse and quality recycling; and by encouraging resource efficiency through education, research and manufacturing initiatives.

Waste nationally and globally is increasingly problematic and challenging to policymakers. It is a problem that is increasing in scale and scope. It matters to all of us for a series of reasons:

• There is simply so much waste. In a country with a small land area and a large population, the sheer bulk of waste is in and of itself a problem;
• As humans congregate in cities around the world, the production of waste has become highly concentrated and that creates particular challenges for its collection and disposal:
• Much waste is harmful. The scale of that harm has become global. It harms both humans and the other species with which we share the planet. That harm comes in many forms.

In a circular economy, materials are more durable and easier to repair, reuse and recycle while waste is turned into a resource. In addition, processes from production to waste management become more resource efficient. Innovative business models enable companies to create value by selling services rather than products. Digital technologies will be pivotal in bringing about this systemic change. The European Union has to make the most of digital solutions for the benefit of a circular economy. This requires addressing the barriers to their uptake, enabling the free flow of data across borders, fostering trust in the data economy, and maximising synergies between the digital and circular economy agendas.

The Knowledge Alliance on Product-Service Development towards Circular Economy and Sustainability in Higher Education (KATCH_e) is a 3-year EU funded project that was launched in January 2017. KATCH_e brings together 11 partners from four EU countries to address the challenge of reinforcing the skills and competences in the field of product-service development for the circular economy and sustainability in the construction and furniture sectors. It develops training materials targeting universities, researchers, practitioners and businesses for the development of sustainable product-services. The main results of KATCH_e are:

• KATCH_e Curriculum;
• KATCH_e Course with 10 Modules;
• MOOC;
• KATCH_e Tools;
• Innovative product ad product-service concepts;
• Business strategies towards circular economy;
• Didactic recommendations for learning approaches on circular economy.