DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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94 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS Figure 24: Ten circular economy opportunities in five focus sectors FOOD AND BEVERAGE 1 Value capture in cascading bio-refineries 2 Reduction of avoidable food waste CONSTRUCTION AND REAL ESTATE 3 4 Industrialised production and 3D printing of building modules Reuse and high-value recycling of components and materials 5 Sharing and multi-purposing of buildings MACHINERY 6 Remanufacturing and new business models PLASTIC PACKAGING 7 Increased recycling of plastic packaging 8 Bio-based packaging where beneficial HOSPITALS 9 Performance models in procurement 10 Waste reduction and recycling SOURCE: Ellen MacArthur Foundation These ten identified opportunities are already being pursued to some extent today, inside or outside Denmark. There is however significant potential to scale up. Doing so could bring Denmark from the – dependent on the sector – early or advanced transitioning economy it is today to an advanced transitioning and in some areas almost fully circular economy by 2035 (see Figure 25 on the next double page spread). For the impact assessment, two scenarios were defined – ‘conservative’ and ‘ambitious’ – to differentiate assumptions on the scalability of the focus products to the wider focus sectors, and of the five focus sectors to adjacent producing sectors. The impact estimated for pumps and windmills, for example, is scaled up to the full machinery sector. The impact for the machinery sector is then, in turn, scaled up to the adjacent electronics sector. In the conservative scenario, such scale-up is heavily discounted – for example, when scaling up the results from the construction of buildings to infrastructure construction, these results are reduced by 80%. In the ambitious scenario, higher scaleup rates are used. A detailed overview of the scale-up used in the two scenarios can be found in Appendix B. Overall, the underlying assumptions for both scenarios can be considered relatively conservative. The scenarios rely, for example, only on technologies currently at commercial stage or late R&D. In addition, the analysis focused on the producing
DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 95 sectors and hospitals only, representing, in total, 25% of the Danish economy 122 . No direct circularity effects have been modelled for the service sector (except hospitals), which represents (excluding hospitals) over 70% of the Danish economy. The Danish energy mix was assumed to be the same in the ‘business as usual’ and circular economy scenarios – which limits the size of the potential CO 2 reduction. More details on key model assumptions and data sources can be found in Appendix C. Relative to a ‘business as usual’ scenario, the identified circular economy opportunities, along with their potential knock-on effects on other sectors of the Danish economy, could produce significantly positive economic and environmental results (see Figure 26). While such estimates by necessity rely on a number of assumptions and recognising that the methodology used to estimate them will continue to be developed, these findings support conclusions from a growing body of research (see Figure 4 in Chapter 1.1) that the impact of a circular economy transition on economic growth, job creation and carbon emissions is likely positive. Figure 26: Estimated potential impact of further transitioning to the circular economy in Denmark Economy-wide impact by 2035. Absolute and percentage change relative to the ‘business as usual’ scenario. GDP EUR billion (2015 prices) Employment 1 Job equivalents CO 2 footprint 2 Million tonnes of CO2 CONSERVATIVE AMBITIOUS 3.6 6.2 0.8% 7,300 0.4% -0.8 -2.5% 1.4% 13,300 0.6% -2.3 -6.9% x% Percentage change 2035 vs. ‘business as usual’ scenario 1 Employment impact modelled through conversion of labour bill to job equivalents via a wage curve approach (elasticity = 0.2). Percentage change is vs. 2013 total full-time employment (Source: Statistics Denmark) 2 Change in Global CO2 emissions vs. Denmark baseline 2035 emissions; other GHG emissions are not included. SOURCE: Ellen MacArthur Foundation; NERA Economic Consulting The economy-wide impact assessment of the conservative and ambitious scenarios of circular economy opportunities produced positive results for Denmark. Positive changes relative to the ‘business as usual’ scenario were identified in five key areas: Economic growth (measured as change in Gross Domestic Product): Economic modelling suggests that the identified circular economy opportunities could expand 122 Based on 2011 gross value added provided by Statistics Denmark.
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