DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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50 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS 2.1.3 Select focus sectors Objective: Focus assessment of sector opportunities (Chapter 2.2) on the most relevant parts of the economy. End product: Set of focus sectors based on a prioritisation matrix that maps sectors on ‘role in national economy’ and ‘circularity potential’. The sector selection is a key tool in the methodology, as it determines the focus for the rest of the project, not only in terms of analysis but also in terms of stakeholder engagement. A large part of the analysis is sector-specific, as opportunities, barriers and policy options typically differ significantly by sector. Stakeholders from the selected sectors (and their broader value chains) need to be engaged extensively in the sectorspecific analysis, as detailed in Chapter 2.2. To select focus sectors in a circular economy initiative, both the role in the national economy and the circularity potential can be assessed. Below, a framework to analytically assess both dimensions is laid out. This analytical framework is not an end in itself, but can serve as a facilitator for a structured debate with key stakeholders and experts. The two natural dimensions to prioritise sectors in a circular economy initiative are the sectors’ role in the national economy and their resource profile. These can be divided in a number of sub-dimensions, for example 53 : i. Role in the national economy: size (and growth) measured by share of GVA (gross value added), contribution to employment (and growth), international competitiveness. ii. Circularity potential: material and energy intensity, volume of waste generated, share of waste landfilled/incinerated, high-level estimate of scope for improved circularity. This list does not aim to be exhaustive, and can be adapted based on, among others, data availability and national priorities. Other sub-dimensions, such as the environmental impact of resource extraction and use, or the scarcity of required resources, could be taken into account. An additional, pragmatic dimension could be the sectors’ relative receptiveness to the circular economy. A semi-quantitative approach to score these sub-dimensions and aggregate them into overall scores for sectors’ role in the national economy and circularity potential was used in the Denmark pilot, and can be useful for other countries. As the availability of quantitative data for sub-dimensions may vary and it might be desired to use sub-dimensions that cannot be evaluated quantitatively, it can be useful to express each dimension as an aggregate, semi-quantitative ‘score’ of normalised scores from each sub-dimension. Each sub-dimension is thus evaluated quantitatively or semiquantitatively, 54 based on the nature of the underlying data. The final result of the sector evaluation for the Denmark pilot is visualised in Figure 11 where the top-right quadrant guides the final selection. A good starting point to conduct the sector selection is to consider the producing sectors 55 , as they typically have the largest direct material footprint. This already narrows down the scope of the exercise – the producing sectors in Denmark, for example, represent 24% of the Danish economy. 56 It can also be useful to look at non-producing 53 More details on the sub-dimension and exact quantification methodology can be found in Appendix A. 54 This could for example be a numerical, ‘traffic-light’-based ranking, or a product of several numerical rankings. 55 Producing sectors include agriculture, forestry and fishing; mining and quarrying; construction; electricity and gas; manufacturing. 56 Statistics Denmark, based on gross value added 2011.
DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 51 Figure 11: Results of sector prioritisation in Denmark pilot CIRCULARITY POTENTIAL Basic metals and fabricated products Food and beverages Construction Machinery Electronic products Hospitals Water supply, sewerage Electricity, gas Packaging (not sized) Rubber and plastic products Agriculture, forestry and fishing Pharmaceuticals Mining and quarrying ROLE IN NATIONAL ECONOMY Producing sectors Prioritised sectors Non-producing sector Size = Gross value added NOTE: Only producing sectors (24% of national GVA) and hospitals (3.5% of national GVA) considered SOURCE: Statistics Denmark (2011 data); Danish Business Authority; Danish Environmental Protection Agency; Ellen MacArthur Foundation sectors that are large consumers of resources. As can be seen in Figure 11, the ‘hospitals’ sector was included in the Denmark pilot since it is an important consumer of resources. In addition, it is mainly public sector owned, which allowed to investigate opportunities in public procurement – important in an economy where the public sector represents 26% of the national economy. 57 Another non-producing candidate that could be considered is the transport sector – one of the top energy consumers in any country. As seen from Figure 11, the food and beverage, construction and real estate, machinery, and hospitals sectors were prioritised based on the assessment of their role in the national economy and the circularity potential. Four key insights resulted from this analysis: • The economic size of a sector is not the only factor for the ‘score’ on the ‘role in national economy’ dimension. Consider construction and real estate versus mining and quarrying. Both sectors have similar contributions to national gross value added and trade, but the construction sector has grown by twice the rate of mining and quarrying over the past 10 years, and employs nearly 30 times more people. 57 Statistics Denmark.
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DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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