A circular economy toolkit for policymakers provides the tools and methods needed to embark on a circular economy transformation.
At the core of this programme is the report Delivering the circular economy: a toolkit for policymakers, which describes a step-by-step methodology and demonstrates its application through a case study in Denmark.
This toolkit is a much needed and relevant aid to policymakers globally to assist them in the transition towards a circular economy. The pilot has been very helpful for Denmark by clearly outlining effective options for Danish policymakers to accelerate the shift towards a circular economy.
The circular economy offers business leaders and governments a clear opportunity for long-term growth that is less dependent on cheap materials and energy, and which can restore and regenerate natural capital. This report complements the recently published report Growth Within: A circular economy vision for a competitive Europe by providing an actionable toolkit for policymakers. The executive summary, key charts, and an interactive version of the full report may be downloaded below.
The Ellen MacArthur Foundation developed the toolkit with the Danish Business Authority and Danish Environmental Protection Agency as key contributors to the pilot phase; analytical support was provided by the McKinsey Center for Business and Environment, with macroeconomic and policy analysis were provided by NERA Economic Consulting, and funding from MAVA Foundation. In addition, a large number of stakeholders were involved as contributors, including 25+ Danish and international businesses, a number of policymakers, academics and other society stakeholders. For a list of individuals and organisations contributing to the content, please see page 8 of the report.
"This report provides a useful methodology that will help move all stakeholders involved in a circular economy transition into action."
Pere Torres Grau, Secretary for Business and Competitiveness, Ministry for Business and Labour, Government of Catalonia
What's included in the report
The report provides a step-by-step methodology including 11 tools, which aim to:
- Assess a country’s circular economy starting position, define its ambition level, and select focus areas
- Systematically screen, sector-by-sector, circular economy opportunities, identify barriers that limit these opportunities and analyse policy options to overcome these barriers
- Assess economy-wide implications.
The case study of Denmark applies the tools presented in the methodology and evaluates opportunities in five focus sectors: food and beverage; construction and real estate; machinery; plastic packaging, and hospitals. The study demonstrates that even in a country with a starting position as advanced as Denmark, there are significant opportunities to scale up the transition towards the circular economy. Macro-economic modelling conducted in the study suggests that opportunities identified in these five focus sectors, covering just 25% of the economy, could lead by 2035 in Denmark to 0.8–1.4% additional GDP growth, the creation of 7,000–13,000 jobs a 3–7% reduction in the carbon footprint, and a 5–50% reduction in the consumption of certain virgin resources.
"Pinpointing economic opportunities through the combination of company level analysis, macro-economic modelling and barrier assessment provides a very powerful starting point for our future work on the circular economy."
Anders Hoffmann, Deputy Director General, Danish Business Authority
"The circular economy toolkit for policymakers project has been a fruitful experience for us. For the first time, we now have quantified some of the potential gains that lie in a circular economy for a country like Denmark."
Claus Torp, Deputy Director General, Danish Environmental Protection Agency
Barriers to transition
The report underlines that circular business opportunities are mainly hindered by non-financial barriers. It suggests that a sector-by-sector approach is the most appropriate to identify the most relevant opportunities, barriers and policy options. Furthermore, system-wide measures, such as broader changes to the fiscal system, could support the transition towards the circular economy.
Toolkit 'plug-and-play' tools
Resourcing and funding is often the most limiting factors for policymakers and public servants to perform a meaningful assessment of circular economy potential and policymaking in their region. The plug- and-play tools facilitates such assessments for the steps where it is most needed.
DISCLAIMER: None of these tools provides the first hand data needed to conduct the analysis. They provide a methodology and framework for assessment. While the plug-and-play tools can be used for stand-alone analysis, the most powerful impact can be achieved when using them as part of the overall methodology described
in Delivering the circular economy – a toolkit for policymakers. The Ellen MacArthur Foundation does not assume responsibility for any of the outcomes of applying the tools.
Sector selection tool – identifying focus sectors: This tool helps the user quantify and prioritise economic sectors in the region based on a) their role in the regional economy, and b) their circularity potential. The tool synthesises several quantitative and semi-quantitative factors (e.g., contribution to gross value add, trade, employment, resource use) into a two-dimensional matrix that gives a visual guide for selecting in which sectors to focus further analysis.
Impact quantification tool – sizing each opportunity, sector by sector: This tool provides the overall logic and mechanism to calculate the economic impact of an identified circular economy opportunity (such as remanufacturing or sharing of assets) for a specific sub-sector or product category and scale it up to the whole sector. The calculation is set up such that the results from the analysis can be injected into an economy-wide model (such as a computable general equilibrium model) for modelling of overall impact if desired. In addition, the tool contains multiple modules to help the user calculate savings/costs/revenues in a number of specific activities that differ by nature to an extent that a general model engine is not feasible. Finally the tool offers a compilation of key examples of impact calculated to date, which helps users benchmark their analysis and generate proxy estimates if needed.
Barrier identification and policy prioritisation tool – identifying and addressing barriers to implementation for each opportunity: This tools provides the framework to identify key barriers to implementation for a given circular economy opportunity. The user then identifies one or more policy options to address these barriers. The tool finally allows this long list of policy options to be ranked according to a qualitative assessment of their impact and cost, which provides a means to systematically prioritise among them. The tool also contains a library of policy options addressing specific barriers, derived from the case study in Denmark that was conducted as part of the development of the Toolkit for policymakers.