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Circular Economy and Employment

figure displaying employment effects of eco-innovation
Author: 
Prof. Dr. Jens Horbach, Klaus Rennings, Katrin Sommerfeld
Publication Date: 
09/2015
Country: 
Germany

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Contact: 
Jens Horbach

Circular Economy and Employment first summarizes the main definitions and conceptualisations of a circular economy, then clarifies the relationship to related concepts such as green growth and eco-innovation. This report is the outcome of a project estimating the employment effects of a circular economy.

The Circular Economy mainly focuses on savings on the shares of material, labour, energy, and capital embedded in the product. In finite systems it is intended to “design out waste”. An important difference is made between consumables (one or few time usage) and durables (years of usage) products. Material savings can be achieved by already established recycling and remanufacturing activities finally aiming at a “zero waste economy”. More recently, the contribution of green ICT leading to less material inputs (“digital revolution”, e.g. photos are no longer printed but distributed by e-mail or social media), a general greater importance of services, the evolution of the sharing economy (e. g. car sharing) or a higher utilisation rate for products for the circular economy are discussed.

Detailed concepts of green growth from OECD, UNEP, EEA and the Global Green Growth Institute are also considered. Green growth means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies. Investment and (eco-) innovation activities shall give rise to new, more sustainable sources of growth and development. Moving towards a circular economy may be understood as a tool to achieve a green economy, a circular economy is one of the main elements helping to achieve the greening of an economy.

Employment and the circular economy: Job creation in a more resource efficient Britain

Employment and the circular economy: Job creation in a more resource efficient Britain

Britain employment in CE report title page

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Author: 
WRAP, Green Alliance
Publication Date: 
12/2015
Country: 
United Kingdom

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Britain faces huge economic challenges in its use of labour and scarce natural resources. Although unemployment is now falling, the risk of being out of work is higher in some regions and for some types of occupations. While Britain has significantly increased its resource efficiency in recent years, supply risks in an increasingly competitive global economy mean that we need to get better at using natural resources. A new research study, undertaken jointly by WRAP and the Green Alliance, shows that these challenges are linked: improving our resource efficiency can make a valuable contribution to improving Britain’s labour market situation.

One route to improving resource efficiency is to develop a circular economy. This involves keeping products and resources in use for as long as possible through recovery, reuse, repair, remanufacturing and recycling. In addition to protecting the environment, this potentially offers substantial economic benefits. These include greater economic stability through increased resource security and new business and employment opportunities from an expanding industrial sector. This study focuses on the second aspect and identifies the scope for the growth of the circular economy to offer new jobs.

The study finds that regions where unemployment is higher, such as the North East and the West Midlands, could see the greatest impact on job creation, especially among low to mid-skilled occupations where job losses are projected for the future.

The study finds that if we stay on the current development path for the circular economy in Britain, then by 2030 the sector could:

  • require an extra 205,000 jobs;
  • reduce unemployment by around 54,000; and
  • offset 11% of future losses in skilled employment.

Alternatively, under a transformational scenario where there was a more extensive expansion of circular economy activities, by 2030 the sector could create over half a million jobs, reduce unemployment by over 100,000 and potentially offset around 18% of the expected future losses in skilled employment.

Circular Jobs: Understanding Employment in the Circular Economy in the Netherlands

Circular Jobs: Understanding employment in the Circular Economy in the Netherlands

circular jobs title page

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Author: 
Circle Economy, EHero
Publication Date: 
03/2017
Country: 
Netherlands

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Contact: 
Harald Friedl

To ensure that policymakers and governments know how and where to implement the circular economy effectively, there is a great need for practical tools to measure it.

Aimed at defining, identifying and quantifying employment opportunities that are needed in the circular economy, Circle Economy and the Erasmus Research Institute for Happiness Economics (Ehero) have developed a standardised and replicable methodology that measures circular employment in cities around the world. This opens up the possibility of monitoring circular employment and therefore empowers cities and governments to effectively invest in the jobs of the future.

The initial findings of this joint research show that 8.1% of all jobs in the Netherlands are currently circular. Once identified, the circular jobs were categorised according to the seven key elements of the circular economy, showing that a large majority are focused on ‘incorporating digital technology’ and ‘preserving and extending what’s already made’. In the past fifteen years, activities that involve ‘repair & maintenance‘ have remained stable in numbers, with the ‘incorporation of digital technologies’ becoming an up and coming job provider. This points to the importance of knowledge-intensive industries and innovation within the Dutch economy.  

Breaking the Barriers to the Circular Economy

Deloitte UU white paper title page

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Author: 
Deloitte, Utrecht University
Publication Date: 
10/2017
Country: 
Netherlands

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Contact: 
Julian Kirchherr

The Copernicus Institute of Sustainable Development, Utrecht University, the Netherlands and Deloitte have jointly carried out research on barriers to the Circular Economy (CE) in the European Union. For this research, a survey with 153 businesses, 55 government officials and expert interviews with forty-seven thought leaders on the circular economy from businesses, governments, academia and NGOs have been carried out. Two types of barriers emerged as main barriers.

Firstly, there are the cultural barriers of lacking consumer interest and awareness as well as a hesitant company culture. This finding is at odds with claims that the circular economy concept is hyped; rather, the concept may be a niche discussion among sustainable development professionals.

Secondly, market barriers emerged as a core category of barriers, particularly low virgin material prices and high upfront investments costs for circular business models.

Government intervention might be needed to overcome the market barriers which then may also help to overcome cultural barriers. Cultural barriers do also need to be overcome by circular start-ups. And, even though there is still no circular startup that has made global headlines, this may change soon.

Developing a national programme for textiles and clothing recovery

Developing a national programme for textiles and clothing recovery

Author: 
Mohammad Bukharu, Ruth Carrasco-Gallego, Eva Ponce-Cueto
Publication Date: 
03/2018
Country: 
France

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Textiles waste is relatively small in terms of weight as compared to other waste streams, but it has a large impact on human health and environment, and its rate is increasing due to the ‘fast fashion’ model. In this paper, the authors examine the French national programme for managing post-consumer textiles and clothing through a case study research.

France is the only country in the world implementing an extended producer responsibility (EPR) policy for end-of-use clothing, linen and shoes. The case highlights the benefits of using an EPR policy and provides interesting insights about the challenges faced by the textiles waste sector. For instance, the EPR policy has contributed to a threefold increase in the collection and recycling rates of post-consumer textiles since 2006. In addition, the material recovery rate of the post-consumer textiles can reach 90%, 50% of which can be directly reused. However, the ‘reuse’ stream is facing some challenges because its main market is in Africa and many African countries are considering banning the import of used textiles to encourage a competitive textiles industry locally and internationally.

The EPR policy shows a great potential to identify new markets for ‘reuse’ and to improve the textiles waste sector. Such an EPR policy also could drive societies to financially support innovation and research to provide feasible solutions for fashion producers to adopt eco-design and design for recycling practices. This paper provides guidance for policy makers, shareholders, researchers and practitioners interested in diverting post-consumer textiles and clothing waste from landfills and promoting circular textiles transition.

Moving in circles: Logistics as key enabler for a circular economy

Moving in circles: Logistics as key enabler for a circular economy

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Author: 
Verena Fennemann, Christian Hohaus, Jan-Philip Kopka
Publication Date: 
07/2018
Country: 
Germany

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The principle of Circular Economy is to keep raw materials within the economic cycle as long as possible while generating the lowest possible amount of waste and emission. To do so, end-of-life products and materials must be kept at the highest possible level of value creation according to their original use. Adapted logistical concepts to coordinate both material and information flows - in addition to innovative business models and new approaches to product design for recycling - are necessary to realise circularity in the economy.

The megatrend of digitalisation, especially through Industry 4.0 and the Internet of Things, offers solutions that have not yet been applied extensively. Possible disadvantages of rebound effects due to Circular Economy and increased demand for resources caused by the deployment of digital technologies must also be taken into consideration. Due to its strong integration into the processes of production, there is scope for digitised management of resource and waste logistics to make a substantial contribution to a sustainable economy

The white paper discusses the various dimension of logistics that support the Circular Economy transition by reflecting upon the following trends: atomisation of shipments, information logistics and data sovereignty, new manufacturing technologies, autonomous systems in Industry 4.0 and Social Networked Industry. Uses cases are developed for each of these trends, whose respective impacts on respectively producers, consumers, recycling businesses and the environment are also analysed.

Further scenario analysis for both a gradual and radical transition to Circular Economy shows the differing impact these trends might have in varying intensity on manufacturing, logistics and recycling. The white paper concludes that logistics is crucial in all levels of the transition to a circular economy, as it forms the core of transporting goods, transferring information in self-organising supply chain networks and developing new business models. 

The circular economy: New or Refurbished as CE 3.0?

The circular economy: New or Refurbished as CE 3.0?

Author: 
Denise Reike, Walter J.V. Vermeulen, Sjors Witjes
Publication Date: 
08/2018
Country: 
EU

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Contact: 
Denise Reike

Over the last decade, the concept of the circular economy has regained attention, especially related to efforts to achieve a more sustainable society. The ‘revival’ of the circular economy has been accompanied by controversy and confusion across different actors in science and practice. With this article the authors attempt at contributing to advanced clarity in the field and providing a heuristic that is useful in practice. Initially, they take a focus on the historical development of the concept of circular economy and value retention options for products and materials aiming for increased circularity.

The authors propose to distinguish three phases in the evolution of the circular economy and argue that the concept – in its dominant framing – is not as new as frequently claimed. Having established this background knowledge, they give insights into ‘how far we are’ globally, with respect to the implementation of circularity, arguing that high levels of circularity have already been reached in different parts of the globe with regard to longer loop value retention options, such as energy recovery and recycling. Subsequently, the authors show that the confusion surrounding the circular economy is more far reaching. They summarize the divergent perspectives on retention options and unite the most common views using a 10R typology.

From their analyses, the authors conclude that policymakers and businesses should focus their efforts on realization of the more desirable, shorter loop retention options, like remanufacturing, refurbishing and repurposing – yet with a view on feasibility and overall system effects. Scholars, on the other hand, should assist the parties contributing to an increased circular economy in practice by taking up a more active role in attaining consensus in conceptualizing the circular economy.

Social Circular Economy: Opportunities for People, Planet and Profit

Social Circular Economy Report cover

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Author: 
Social Circular Economy, Winston Churchill Memorial Trust, The Frank Jackson Foundation
Publication Date: 
07/2018
Country: 
United Kingdom

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Is the current circular economy paradigm enough? Will it get us to a fairer society and flourishing planet? Will it allow us to meet the UN's Sustainable Development Goals? Perhaps not. There could be a different way: by combining social enterprise and circular economy (= social circular economy), to deliver benefits to people, planet and profit.

​The Social Circular Economy report provides insights from our engagement with 30+ organisations from around the world that are using the value creating approaches of the circular economy to deliver environmental, societal and economic benefits. From a recycling hub supporting a disability rehabilitation centre to corporate uniform repurposing with women's collectives, there are organisations innovating business models and processes to do business better and help meet UN Sustainable Development Goals. This report covers:

  • What is the social circular economy?
  • What are the themes across social circular enterprises?
  • What are examples of these organisations?
  • How can you or your organisation participate?

Impacts of the circular economy policies on labour market

Impacts of circular economy policies on the labour market

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Author: 
ICF, Trinomics, Cambridge Econometrics
Publication Date: 
05/2018
Country: 
EU

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Contact: 
Juan Perez Lorenzo

How does a transition to a more circular economy affect jobs and skills demand in Europe?

This report looked at trends of circular economy activities across different sectors and quantified these activities as modelling inputs to provide employment changes for different sectors. The analysis also provides estimates of the occupational shifts and skills requirements that a shift to a more circular economy could entail.

The aim of this report is to develop an understanding of how a transition towards a more circular and resource efficient economy in Europe will affect labour markets across the Member States. Our analysis is the most comprehensive quantification of the EU jobs impacts from the circular economy to date. By using a fully integrated energy-environment-economy model (E3ME), our analysis considers both direct job losses and job creations that result from a shift to a more circular economy. It also captures indirect, induced and rebound impacts from interactions between sectors, Member States, and between economic, environment, material, energy and labour market indicators.

Our findings suggest that the EU is on the right track by making the circular economy a policy priority as circular economy policies will contribute to reducing negative environmental impacts, while simultaneously contributing to higher employment levels. By moving towards a more circular economy, GDP in the EU increases by almost 0.5% by 2030 compared to the baseline case. The net increase in jobs is approximately 700,000 compared to the baseline through additional labour demand from recycling plants, repair services and rebounds in consumer demand from savings generated through collaborative actions Although the magnitude of job creation is driven by our assumption of the rate of circular economy uptake in the scenarios, our analysis confirms that it is possible to become more resource efficient and increase employment at the same time.

Die Oekonomischen auswirkungen einer Verbesserung des Deutschen Gewaehrleistungsrechts

Study on the economic impact of extending warranty rights in Europe

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Author: 
Kilian Bizer, Martin Fuehr, Till Proeger
Publication Date: 
09/2016
Country: 
Germany

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Contact: 
Otmar Lell

The study analysed the economic effects of the transposition of Directive 1999/44/EC concerning warranty rights, which had to be transposed into national law by January 2002. A number of publications had suggested that strengthening warranty rights for consumer goods as foreseen in the directive could increase the price level of these goods, possibly resulting in a reduced purchases. The study addressed both questions by analysing data from several EU countries. The first question was addressed by analysing inflation rates of general prices and of prices for the consumer goods affected by the directive in the time period 1998 until 2002. The second question was analysed by looking at the share of consumers who used online consumer-to-consumer markets, which were not covered by the warranty rights foreseen in the directive.

The comparison of inflation rates for consumer goods showed that inflation rates for consumer goods were below the general inflation rate between 1998 and 2004. Therefore, between 1998 and 2004 prices for the different groups of consumer goods covered by the directive did not increase but actually appear to have decreased slightly. This effect has been found for all countries analysed with no significant differences between countries transposing the minimum standards and those that went beyond. The second part of the analysis addressed the question if a developed market for online consumer-to-consumer selling of goods exists, for which the new seller's warranties weren't valid. In case of price increases for business-to-consumer markets – which have not been found in the first part of the analysis – part of the transactions could be transferred to these markets. The analysis showed that the vast majority of consumers in Western European countries used the internet regularly to purchase goods, including the online-platform Ebay. In case of increasing prices for consumer goods because of strengthened warranty rights, part of the transactions would move to online consumer-to-consumer markets rather than resulting in an overall decline of consumer goods purchases. The general conclusion was that over the analysed time period no negative impact of strengthened warranty rights on the price level of consumer goods could be found.

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