DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 169
• Energy sector assumptions remain the same between the baseline and the circular
economy scenarios (i.e. no explicit modelling of an additional shift towards
renewable energy).
Each circular economy scenario is represented by producing an input-output table that
represents the changes induced by the circular economy opportunities, quantified as
described in section 2.2.3. The allocation of changes in input factors (labour, materials,
energy and capital) was done based on an analysis of the changes in demand due to the
circular economy activities, 2 and from which sectors’ key material inputs are provided in
the current (2011) input-output table.
The main difference between the ‘conservative’ and ‘ambitious’ scenarios are how the
impact assessed for the deep-dive sub-sector is scaled up to adjacent (sub-)sectors.
This difference is described in detail in Appendix B.
Several data sources were combined to construct the baseline calibration and circular
economy scenario analysis. These are summarised in Figure C5.
D
Assessment of policy options
Figure D1 provides an overview of the basic arithmetic of the policy assessment tool
developed for the Denmark pilot study. The tool is a workbook that contains 87 policy
interventions identified to address the barriers to the circular economy opportunities
in the five focus sectors. The goal of the tool is to rank the policies by their relative
cost-effectiveness using a semi-quantitative scoring function. This is done by scoring
each intervention on two dimensions, ‘impact’ and ‘cost’, from which a weighted ‘costeffectiveness
score’ is derived.
The development and implementation of the tool described here is one of many
alternatives that policymakers can use as a first step to narrow down a long list of policy
options to those with the best potential to address the barriers to circular economy
opportunities. It should be noted that the main benefit of this tool was that it facilitated
discussion. Ultimately, the final sets of policy options for each sector as presented in
Part 3 of this report were determined with the help of significant input from government
stakeholders and sector experts. While the approach outlined here is a useful first step, it
is underlined that it is not meant as a substitute for adequate due diligence and impact
assessment in the standard policy making process.
The scoring rules and methodology used to arrive at a prioritised set of policy options
are described in detail below. Each policy intervention was scored independently of
others, i.e. not allowing them to work in conjunction with any other policy, but keeping
in mind their potential to work well as part of a package. All scores are relative, with
comparisons made across several dimensions including policy types, circular economy
opportunities and sectors to ensure adequate scoring distributions.
Scoring of impact dimension
The ‘impact score’ of a policy is the product of two equally weighted factors: the
‘importance of a barrier’, which builds on the detailed barrier analysis described in
Section 2.2.4; and the tentative effectiveness of the policy intervention at overcoming
the barrier. The methodology, described in detail below, was systematically applied to
all policy interventions to obtain a first set of impact scores, which were discussed and
iterated in sector ‘deep dive’ sessions with multiple stakeholders.
• Scoring the ‘importance of barrier’: Based on expert judgment on the size/
importance of the barrier to deliver the circular economy opportunity.
• Scoring the ‘effectiveness’ in 2020 and 2035: Based on an expert-guided es-
2 For example: reduced demand for materials and increased demand for labour due to remanufacturing in
machinery; reduced demand for labour and increased need for capital for industrialised production and 3D
printing of building modules.