The circular economy is coming. Governments across the world, from the EU [1], to China, Japan [2] and Latin America [3] are adopting circular strategies as part of their environmental action plans. The list of pioneering businesses adopting the circular economy as a means to reduce linear risks, generate new revenues, and reduce costs continues to grow.[4][5][6] However, despite—or rather because of—circular innovations happening at every scale around the world, more specific definitions and categorisations of what does or does not belong under the umbrella term ‘circular economy’ remain ambiguous.
The principles of a circular economy concern designing out waste, regenerating ecosystems and keeping items in use. Decoupling the economy from material flows—improving the rate of resource productivity faster than the economic growth rate—is also a consistent guide [8][9]. By evolving with the growing number of applications of circular economy principles, and consolidating these strategies across thematic areas, Circle Economy’s Key Elements Framework (KE) renders the elements of the circular economy salient and serves as a basis to derive contextual strategies and interventions. The Framework consists of:
The Key Elements framework is a conceptual framework of eight elements of circularity that can be applied at different intervention levels (for example, national, regional, sector, business, product, process, or material) towards a circular economy.
The KE framework consists of three core elements and five enabling elements. Core elements deal with physical flows directly, whilst enabling elements deal with creating the conditions or removing barriers, for a circular transition.
The core elements align with other common frameworks related to the circular economy and, specifically, the handling of physical flows. Represented below are the core elements as corresponding to Bocken’s Flows [10]—widely applied to various systems, the 10R framework, the 5R Framework (a simplified 10R) most commonly applied to supply chains and manufacturing, and the Ellen Macarthur Foundations’s principles of the circular economy [11][12][13].
The KE are thus unique because they include enabling elements. Despite the increased interest in, and efforts towards, executing core elements of the circular economy, there are persistent obstacles to their implementation. Some of the main obstacles to achieving the transition are that dominant economic incentives largely rely on traditional, linear ways of creating value. A lack of systems that keep track of cycled resources; recover resources from existing products, and a general lack of awareness and knowledge about the circular economy all hinder the transition.
Enabling elements can accelerate uptake of circularity by removing some of these obstacles. These are represented in the following table.
The KE Framework is suitable for a wide audience who require a comprehensive framework that is easy to remember and communicate to different audiences. It is fitting for speakers, policymakers, and journalists to guide conversations, as well as for educators to design workshops, exercises and learning resources for circularity. It can also be used by strategists, analysts and researchers who are looking to perform novel research about circularity in a given context. In this case, such a comprehensive framework helps to structure research and catalogue information.
Frameworks based on the circular economy can make the concept more accessible, easier to compare to other systems and, in this way, encourage its application across contexts.
The KE framework can be used at a high level, but can also be applied at different levels to design strategies or structure research. The KE framework has been a prominent framework across a variety of Circle Economy’s projects in the past few years.
The list below demonstrates the vast variety of its applications, both in terms of scale and intervention level.
Initially, the KE was created by mapping the various terms and definitions used by over 20 organisations—NGOs, government agencies, academia, consultancies, and more—working on elements of the topic. After interpreting and grouping these various terms, seven key elements emerged that defined the majority of terms linked to the circular economy.
Since then, the KE has been continuously researched in line with the ever-growing literature on defining circularity and its enabling conditions. A recent literature review of circular economy strategies in play today uncovered the gap of strategies related to knowledge. This literature review houses a detailed description of each element and will be released in the coming weeks and can be found in a summarised form in our upcoming updated Knowledge Hub. With its addition, our seven key elements will become the eight key elements.
The ongoing practical work of our organisation also complements the development process of the KE Framework. This ranges from developing circular strategies, delivering training and workshops, and designing and developing methodologies and digital products across more than 125 nations, cities and business around the world with over 3000 stakeholders. [14]
The KE Framework is robust in its structure of core and enabling elements and has proven its success across a variety of contexts. We have developed, or are currently developing, related strategy frameworks for nations, cities and products. However, these need to be continuously reviewed with stakeholders and updated accordingly. Related strategy frameworks for other territorial units—such as regions, businesses, sector analysis, materials—should also be researched and created.
The core elements are consistent across intervention levels, although the strategies differ according to the context. Enabling elements differ according to the context and scale of application of circularity and may not need to be applied in every context. These applications need to be researched continuously in line with the evolution and maturity of circular economies.
Elements, or applied strategy frameworks, need to be linked to appropriate success monitoring frameworks. This will allow us to track the successful implementation of circular strategies in different contexts. They need to also be linked to appropriate impact frameworks, first qualitatively (conceptually) and then enhanced through linking of quantitative indicators per scale. Coupled with the above success metrics for circular strategy implementation, this will allow us to track the impact of elements across different scales over time.
[1] https://ec.europa.eu/environment/circular-economy/
[2] https://www.mdpi.com/2313-4321/4/3/27
[3] https://www.ctc-n.org/technical-assistance/projects/assessment-current-status-circular-economy-developing-roadmap
[4] https://www.circle-economy.com/news/linear-risks-how-business-as-usual-is-a-threat-to-companies-and-investors
[5] https://www.weforum.org/agenda/2019/02/companies-leading-way-to-circular-economy/
[6] https://mailchi.mp/circle-economy.com/knowledge-hub-3-0-access
[7] https://www.sciencedirect.com/science/article/pii/S0921344917302835
[8] https://www.resourcepanel.org/reports/decoupling-natural-resource-use-and-environmental-impacts-economic-growth
[9] https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy
[10] https://www.tandfonline.com/doi/full/10.1080/21681015.2016.1172124
[11] https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy
[12] https://www.researchgate.net/publication/335602859_Circular_Economy_30_-_Solving_confusion_around_new_conceptions_of_circularity_by_synthesising_and_re-organising_the_3R's_concept_into_a_10R_hierarchy
[13] https://circulareconomy.europa.eu/platform/sites/default/files/1-s2.0-s0921344917302756-main.pdf
[14] https://impact.circle-economy.com/
National governments hold a privileged position: the ability to lead the discussion on societal goals and facilitate collaboration between different actors within society, spurring welfare improvements for their citizens. In doing so, governments have at hand a set of instruments that span from setting national strategies and convening stakeholders, to informing citizens about national priorities, incentivising economic actors through specific instruments or issuing laws and regulations.
National governments play a key role in the transition to a circular economy because of their leadership position: they set the goals and enforce the rules of the game through fiscal and economic measures and regulations.
By building on previous research and analysing circular policies and policy tools in use around the world, we present a framework of policy instruments that can be used to support the transition to a circular economy at the national level.
Check out our Urban Policy Instruments Framework for a set of policies applicable at subnational level.
This is a three tiered framework of policy instruments. Tier one indicates the key function that policy can have, Tier two presents key policy directions and Tier three presents the specific policy instruments that can be used by national policymakers to drive this change.
The key policy functions—Tier one—are:
Please refer to the PDF version of this content for the full framework, as well as illustrative examples.
This research and framework is aimed at professionals in the field of national policy, who are looking to structure and work with practical examples of how policy instruments are being applied across territories to advance the circular economy and other sustainability-related paradigms, such as green growth and eco-innovation.
The tiered approach, global geographical coverage of the examples included and the number of case studies make this work suited for use by researchers, consultants and policy analysts, whose work spans from academic research to advisory roles in public institutions, think tanks and the like.
Researchers can use the framework to structure analysis or to guide learning and research, and highlight emerging patterns, differences or relationships among circular economy policies.
Consultants may use the framework to establish a baseline for a nation, or to identify opportunities for policies that can support targets and goals. The framework is useful to structure analysis, and to extract a representative sample of cases for a given theme or region.
Finally, policy analysts can also benefit from the framework as a means to structure analysis, put together a policy mix and navigate repositories of examples.
This framework helps policymakers from national governments distinguish between the diversity of available tools and instruments applied worldwide, which could be useful to accelerate the transition towards a circular economy within certain contexts. It also highlights a variety of priority areas, such as energy, infrastructure, agriculture, or waste management, among others. Also, in the case where the debate on circular economy is yet to start or in its initial stages, this framework could act as a guide for designing a robust set of policies for the country in question.
Even if there is no explicit national circular economy strategy in place, there are likely several policies and strategies that already support the circular economy to some degree, and it is prudent not to 'throw the baby out with the bath water'. This assessment process could also help governments identify what institutional setting is necessary to move towards the achievement of circular economy goals.
Depending on legal structures, certain policies can be applied at different levels, from national to subnational. For example, the management of assets and land can take place at a national or subnational level, depending on the legislative mandate, as can the establishment of circular infrastructure or skills development, which can take place at the national level and then be applied to subnational.
Firstly, evaluate the legislative mandate of your federal agency or the agency you are working with to shortlist policies that are relevant and able to be applied. Moreover, for the effective implementation of the policies nationwide, it is crucial to have clear and institutionalised communication between different levels of government.
For example, the Australian Government is working in coordination with state governments, funding waste management and recycling infrastructure projects through the Recycling Modernisation Fund (RMF). Through National Partnership Agreements, the states and territories will receive funding. The allocation of funding to specific projects is the responsibility of state and territory governments, which will assess their jurisdiction’s major gaps in local reprocessing capacity (case study).
As the circular economy is cross-cutting, the approach in selecting a policy mix should itself be cross-cutting—and involve multiple departments and federal agencies and illicit a participative approach with industry and citizens. Depending on the list of priorities the government set for its transition to circularity, the collaboration would imply teaming up with specific sectors and Ministries, or having stakeholders come together that represent different actors within the economy.
For example, in 2016 the national government in the Netherlands, issued the Circular Economy in the Netherlands by 2050: a country-wide programme to achieve full circularity by 2050. This national initiative is led by the Ministry of Infrastructure and Water Management, in coordination with the Ministries of Economic Affairs and Climate Policy, Foreign Affairs, Interior and Kingdom Relations, as well as the private sector, civil society organisations and research institutes. The broad collaboration for this programme is crucial as it has set five priority areas: the construction sector, biomass and food, consumer goods, plastics, and the manufacturing industry (Case study).
In some cases, the installation of specific institutions for the management of circular economy activities and monitoring of progress could be a good starting point. For example, in 2018 Chile opened a Circular Economy Office as part of the Ministry of Environment. This new office is tasked with the monitoring of regulatory activities regarding waste management, extended producer responsibility and the promotion of recycling (Case study).
In order to support a circular intervention, a nation will likely design and employ a mix of policies, depending on context and which policies are already in place. The prioritisation of policies can and will differ across these contexts. Further to this, different policy instruments will vary for nations based on how far along they are in their circular transition and legislative mandates.
For example, Italy wanted to introduce a technological standard for communicating the recycled content of products. To increase the visibility of such an initiative, Italian authorities partnered with an NGO formed by the National Association of Recyclers to develop a voluntary certification (label) based on the technological standard. To increase its adoption, the government introduced a regulation to integrate the certification as a requirement in its Green Public Procurement (GPP) process, and provided certified companies with the possibility of applying for subsidies and tax breaks (Case study).
The framework has been developed based on a combination of academic literature and case studies. In its first iteration, the Toolkit for Policy Makers from the Ellen MacArthur Foundation (EMF) served as the basis. Using this foundation, the Circle Economy team collected over 400 case studies of governments across the globe supporting the circular economy and attributed these to the policy instruments put forward in the toolkit.
Check out 300+ examples of policies at national and subnational levels on Circle Economy’s Knowledge Hub.
Circular economy goals and interventions often spin off of national waste management policies that came about as early as the 1950s and 1960s, and have been extended and refined to include more circular concepts around design, industrial symbiosis and regeneration. The circular economy can be linked to the broader sustainability and environmental management movement beyond waste management. For instance, environmental education covers ‘nature’ at all levels of education, and has evolved in line with developments in the field. This movement can be naturally extended to include circular economy in schools and workplace training. Further research on how best to tie circular economy policies into existing environmental, sustainability and waste management profiles, will improve the application of this framework in the development of a suitable policy or mix of policies.
This framework includes policies as well as broader policy tools, so as to provide a larger set of ‘actions’ a national government can take to support a circular economy. This framework can be extended and improved by qualifying this more robustly, with differences across regions when required. Similarly, the framework can be extended to support profiling legislative mandates for different nations and regions.
Lastly, a final extension to the research will be to map the nation’s role in aligning with international standards and employing international cooperation, and how and where this should feature in the development of a circular economy national strategy.
We are striving to continually update our frameworks to ensure they remain relevant and are best suited to facilitate action. To this end, we welcome suggestions and comments on this framework from our Knowledge Community.
Please see this public google sheet for a list of the documents used in the analysis.
Bouwm, I.M., Gerritsen, A.L., Kamphorst, D.A., & Kistenkas, F.H. (2015). Policy instruments and modes of governance in environmental policies of the European Union: Past, present and future (WOt-technical report 60, pp. 1-46, Rep.). The Netherlands: Wageningen University.
European Commission & International Institute for Labour Studies. (2011). Policy options and instruments for a green economy (Ser. 12, Joint Discussion Paper).
Environmental Justice Organisations, Liabilities and Trade. (2012). Policy Instruments for sustainability. Retrieved from EJOLT Website
Ellen MacArthur Foundation. (2015). Delivering the circular economy: a toolkit for policymakers (pp. 1-177, Rep.). Ellen MacArthur Foundation. Retrieved from EMF Website
Innovation Policy Platform. (n.d.) Universities and public research institutions. The Innovation Policy Platform, OECD & World Bank. Retrieved from https://www.innovationpolicyplatform.org/content/universities-and-public-research-institutes
Jordan, A,, Wurzel, R.K.W., & Zito, A. (2005). The rise of ‘new’ policy instruments in comparative perspective: Has governance eclipsed government? Political Studies,53, 477-496. doi:10.1111/j.1467-9248.2005.00540.x
Martínez, L., Aravena, A.H., Castello, N.F., & Urrutia, R.R. (2019). Economía circular y políticas públicas: Estado del arte y desafíos para la construcción de un marco político de promoción de economía circular en América Latina (pp. 1-76, Rep.). Lima: Centro de Innovación y Economía Circular. Retrieved from Konrad Adenauer Website Matisoff, D. C., Noonan, D. S., & Flowers, M. E. (2016). Policy monitor—green buildings: Economics and policies. Review of Environmental Economics and Policy, 10(2), 329-346. doi:10.1093/reep/rew009
Organisation for Economic Co-operation and Development (OECD). (2010). Regulatory policy and the road to sustainable growth (pp. 1-107, Rep.). Paris: OECD. Retrieved from OECD Website
OECD. (2011). Environmental taxation: A guide for policy makers. Paris: OECD. Retrieved from OECD Website
OECD. (2013). A toolkit of policy options to support inclusive green growth. Paris: OECD. Retrieved from OECD Website
OECD. (2016). OECD policy instrument for the environment: Database documentation. Paris: OECD. Retrieved from OECD Website
Sánchez, Á.P. & Deza, X.V. (2015). Environmental policy and eco-innovation: An overview of recent studies. Innovar, 25(58), 65-80. doi:10.15446/innovar.v25n58.52426
Silva, E. & Acheampong, R. (2015). Developing an inventory and typology of land-use planning systems and policy instruments in OECD Countries (pp. 1-52, Working paper No. 94). Paris: OECD. Retrieved from OECD Website
Tojo, N., Neubauer, A., & Bräuer, I. (2006). Waste management policies and policy instruments in Europe (pp. 1-108, Rep.). Lund: International Institute for Industrial Environmental Economies. Retrieved from Ecologic Website
United Nations Environment Programme. (n.d.) Switch Africa green. Retrieved from UNEP Website
White, R. & Heckenberg, D. (2012). Legislation, regulatory models and approaches to compliance and enforcement (pp. 1-27, Briefing paper No. 6). Tasmania: University of Tasmania. Retrieved from University of Tasmania Website
Luis Sosa - Research Analyst Circular Jobs Initiative
Alex Colloricchio - Sustainability Data Analyst
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Esther Goodwin Brown - Lead Circular Jobs Initiative
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Max Russell - Project Manager Cities
Matthew Fraser - Lead Circularity Gap Report Initiative
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