Given the holistic and systemic nature of circular economy solutions, designing measures to drive circularity may be a challenge to policymakers used to the more focused interventions often applied within a linear economy. We will highlight here six of the challenges that CE policymakers will have to overcome.

Swimming against the tide

Most countries’ economies are overwhelmingly linear in nature, and that is what we are all used to as consumers, businesses, or policymakers. It can be difficult to disconnect from the dominant paradigm, with the result that many policies labelled ‘circular economy’ are, in fact, just minor evolutions of existing measures. An obvious example here is recycling. Many so-called circular economy policy documents — see, for example, European Commission (2015) and Defra (2018) — contain as a key legislative element mandatory recycling rate targets (a familiar and well-understood waste policy measure), while placing much less emphasis on novel policy approaches that could drive more radical solutions, such as circular economy business models (CEBMs).

Legislating is hard

Many policymakers, particularly in the EU, see legislation as the primary weapon in their armoury. However, as moving to a fully CE would involve major changes in the way that both businesses and consumers operate, it can be difficult to legislate for. Regulation enforcing radical change is likely to encounter significant resistance from incumbent businesses that will face high compliance costs or may even find their current mode of business no longer viable. The new, circular businesses that would be aided by such legislation are unlikely to exist yet and so cannot lobby in support of the change. The result is that radical legislative change is vetoed.

Where’s the evidence?

It is difficult to design effective policy measures without a sound evidence base. Unfortunately, a lack of robust data and evidence is characteristic of the resources and waste sector in the United Kingdom and many other countries (Defra, 2018: 134). This problem has plagued traditional policymaking for decades. If more radical policy measures are under consideration, the need for a sound evidence base is much higher, to convince the sceptics, yet the potential to produce one is likely to be much lower. The result is an inability to convince stakeholders of a policy’s merits.

Making the perfect the enemy of the good

A constant challenge for policymakers is to find the right balance between, at one end, designing a policy measure that would, in theory, deliver precisely the objective intended but is, in practice, impossible to implement and, at the other, a measure that is easy to introduce but whose practical effects bear but a poor relation to the original policy intention.

This general problem is of particular relevance here because of the complex nature of the problem to be addressed. To take a concrete example, the first case study described earlier concerns EPR for packaging in the United Kingdom. In designing the modulated fees that producers will pay when putting their packaging on the UK market, which should act as a key driver for future ecodesign efforts by those producers, the policymaker is faced with exactly this problem. Should the fees be modulated by reference to something that is well understood and easy to validate, such as the extent to which the particular packaging material and format are recycled in practice? Or should they reflect a more holistic judgement of the ‘circularity’ of the packaging over its entire life cycle, referencing many other issues beyond recyclability, even if such a metric is contested, hard to measure, and subject to data gaps? The former decision will enable early implementation but may have unintended consequences (see below for details); the latter may provide a more circular policy measure but may delay implementation until a robust version of the intended metric is available.

The risk of unintended consequences

This is another widespread difficulty in policymaking. Attempts to solve one problem through policy can inadvertently lead to the creation of other problems.

To continue with the example of packaging EPR discussed immediately above, one potential unintended consequence of implementing packaging EPR using the simple and workable metric of recyclability to determine the size of modulated fees can be seen in the following: in recent years, several instant coffee brands have introduced plastic refill pouches which enable consumers to reduce their waste production by up to 97% per unit of coffee bought, in terms of the weight of the plastic refill pouch compared to the traditional glass jar it replaces. Although the glass jar is recyclable, the non-recyclable plastic pouch is significantly more resource efficient, given that both glass and plastic are carbon-intensive materials to produce, and most environmental impacts are broadly proportional to weight. However, if packaging EPR uses recyclability as its sole metric for setting modulated fees, the heavier glass jar will survive, while the more resource-efficient plastic pouch is likely to be discontinued.

What do we want?

One further challenge to CE policymaking is the response of consumers. There are many examples in the literature of well-meaning environmental policy measures — particularly those focused on providing information and raising awareness — which failed to have any substantive impact on the behaviour of mainstream consumers. Multiple examples are discussed in Phillips and Scott (2012), for example. This is particularly relevant to those trying to promote a circular economy. More than six decades of marketing efforts focused on persuading us all of the necessity of owning the newest, latest, shiniest gizmo (see Packard, 1960, for an early analysis) will not be easily reversed, particularly when the vast majority of today’s marketing budgets remain dedicated to promoting the products of a largely linear economy.

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