Methodologies for Measuring the Macroeconomic and Societal Impacts of the Circular Economy

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This report assesses methodologies that are used to measure the macro-economic and societal impacts of the circular economy. It provides insights relevant for relating circular opportunities as analysed in case studies to GDP growth, employment, competitiveness and welfare. Macroeconomic effects of circular-economychanges maydiffer in the short-versus long-term perspectives. Case studies can be viewed as elements in a list of circular business opportunities that are not realised in a baseline scenario due tobarriers. A circular economy scenario consists of a number of policies to reduce these barriers. In the literature,a large number of studies suggests that GDP and employment will rise as a consequence of circular opportunities being realised or circular policies being implemented. The methodologies used in these studies are critically evaluated, and it is concluded that severalassumptions are necessary in order to reach suchresults. Especially, it is important to consider to what extent the relevant comparison between the baseline and circular scenariosis being made. Is the point of reference that no measures are taken thatreduce barriers to profitable business opportunities, or that instead of reducing barriers for only circular opportunities policy is focused on reducing barriers for all business opportunities?In the latter case,it is much more difficult to prove that circular opportunities generate an increase in GDP or employment. Therefore, a thorough investigation of the methodology behind macro-impact evaluationsof the circular economy, though difficult,is important to undertake. Based on the analysis,possible indicators are suggested, both at the level of circular business opportunities and at the macro level.
Original languageEnglish
Number of pages38
Publication statusPublished - 6 Apr 2018


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