DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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12 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS TABLE OF CONTENTS Foreword 3 Disclaimer 7 Acknowledgements 8 Executive summary 13 Reader’s guide 16 1 Why the circular economy matters 19 1.1 From linear to circular – Accelerating a proven concept 19 1.2 A favourable alignment of factors makes the transition possible 28 1.3 The role of policymakers and this toolkit 32 2 Methodology for policymakers to accelerate the transition 39 2.1 Align on starting point, ambition and focus 39 2.2 Assess sector opportunities 52 2.3 Analyse economy-wide implications 73 2.4 How regional differences could impact the methodology 85 3 Case study – Denmark 91 3.1 National perspective 91 3.2 Food & Beverage 102 3.3 Construction & Real Estate 111 3.4 Machinery 123 3.5 Packaging 129 3.6 Hospitals 140 List of figures and boxes 174 About the Ellen MacArthur Foundation 176
DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 13 EXECUTIVE SUMMARY Business leaders and governments alike are acknowledging that continued long-term value creation requires a new economic model that is less dependent on cheap, easily accessible materials and energy, and that is able to restore and regenerate natural capital. In its research to date, the Ellen MacArthur Foundation has demonstrated that the circular economy is a clear value creation opportunity. As many policymakers become interested in this promising model, they envisage the important role they can play in creating the right enabling conditions and, as appropriate, setting direction to unlock it. This report looks at the circular economy opportunity from a country and policymaker perspective, and aims to provide policymakers with an actionable toolkit to help accelerate the transition towards the circular economy. Delivering the circular economy – a toolkit for policymakers is the result of a collaboration led by the Ellen MacArthur Foundation, with the Danish Business Authority and the Danish Environmental Protection Agency as key contributors, especially in the Denmark pilot phase. The toolkit was developed in cooperation with Danish and international stakeholders, including leading policymakers, businesses and academics. The McKinsey Center for Business and Environment (“MCBE”) provided analytical support. NERA Economic Consulting provided support for the macroeconomic and policy analysis for Parts 2 and 3 of this report. The MAVA Foundation funded the project. Eight key insights emerged from developing the toolkit and testing it in the Denmark pilot: 1 A transition towards the circular economy can bring about the lasting benefits of a more innovative, resilient and productive economy. Modelling conducted in this study suggests that it could lead, in Denmark, to 0.8–1.4% additional GDP growth, the creation of 7,000–13,000 job equivalents, 3–7% reduction in carbon footprint, and 5–50% reduction in virgin resource consumption for selected materials. These estimates are for 2035 and only consider producing sectors and hospitals, covering 25% of the Danish economy. They do not take into account a further shift towards renewable energy. While such estimates rely by necessity on a number of assumptions and are associated with uncertainty, they confirm the findings from a growing body of research that the impact of a transition to the circular economy on economic growth, job creation and the environment is likely to be positive. 2 Many circular economy opportunities have a sound underlying profitability, but there are often non-financial barriers limiting further scale-up or holding back development pace. Policymakers can play an important role in helping businesses overcome these barriers. Barriers include unintended consequences of existing regulations (e.g. definitions of waste that hinder trade and transport of products for remanufacturing), social factors such as a lack of experience among companies and policymakers to detect and capture circular economy opportunities, and market failures such as imperfect information (e.g. for businesses to repair, disassemble and remanufacture products) and unaccounted externalities (e.g. carbon emissions). In addition to creating enabling conditions, policymakers can, as appropriate, set direction for a transition to the circular economy.
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DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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