NERA contributes policy and macroeconomic analysis on the circular economy in a new study from the Ellen MacArthur Foundation: “Delivering the circular economy – a toolkit for policymakers”

26 June 2015

Brussels—NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, provided macroeconomic and policy analysis support to the latest research by the Ellen MacArthur Foundation Delivering the circular economy – a toolkit for policymakers, released in Brussels today.

Delivering the circular economy – a toolkit for policymakers, is the result of a collaboration led by the Ellen MacArthur Foundation and with key contributions by the Danish Business Authority and the Danish Environmental Protection Agency. The report is intended to be an actionable toolkit for policymakers who wish to embark on a circular economy transition.

A team led by NERA Associate Director Dr. Mauricio Bermudez-Neubauer contributed to the study by developing and applying new methodologies for policy and macroeconomic analysis on the circular economy. The NERA team supported two core parts of the research, which included developing methodologies for quantifying the economy wide impact of greater circularity, mapping and prioritising sector-specific and economy-wide policy options, and applying those methodologies to a case study of Denmark.

The study finds that even in a country with a starting position as advanced as Denmark, there are significant opportunities to scale up the transition towards the circular economy. The macroeconomic modelling suggests that opportunities identified in five focus sectors (food and beverage, construction and real estate, machinery, plastic packaging and hospitals), covering just 25% of the economy, could lead, in Denmark and by 2035, to 0.8–1.4% additional GDP growth, the creation of 7,000–13,000 jobs, a 3–7% reduction in carbon footprint, and 5–50% reduction in virgin resource consumption for selected materials. To quantify the these economy wide impacts of greater circularity in the Danish economy and its main trading partners, NERA developed and ran a version of its “NewERA” computable general equilibrium (CGE) global model.

The report also underlines that circular business opportunities are mainly hindered by non-financial barriers and suggests that a sector by sector approach could be appropriate to identify the most relevant opportunities, their barriers and the policy options to enable them. It also suggests that system-wide measures, such as broader changes to the fiscal system around incentives for resource use, could support the transition towards the circular economy.

The report may be downloaded from: www.ellenmacarthurfoundation.org/books-and-reports

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

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