Policy makers in Germany are increasingly aware that the transformation towards a circular economy is a crucial necessity: From an environmental point of view, the Paris climate targets will only be achievable by drastically increasing the circularity of the German economy. At the same time, Germany’s future competitiveness will depend on new circular business models that offer results and services instead of simple products.
Introduction: The Need for More Circularity
Current patterns of production and consumption not only in Germany but around the globe are characterized by a linear “take-make-dispose” approach, by a throwaway culture that focuses on improving waste management instead of addressing the actual root causes of waste production. Products are not designed in a manner amenable to recycling, business models are based on a maximization of throughput, and waste regulations focus on safe disposal, not on on optimizing the quality of recycled materials. On a global scale, the year 2020 represents a dangerous milestone: For the first time, mankind exceeded the extraction threshold of 100 billion ton of natural resources from the various ecosystems.
Policy makers in Germany are increasingly aware that the transformation towards a circular economy is a crucial necessity for multiple reasons: From an environmental point of view, the Paris climate targets will only be achievable by drastically increasing the circularity of the German economy. At the same time as well, Germany’s future competitiveness will depend on new circular business models that offer results and services instead of simple products. The traditional German industry approach of importing raw materials and intermediate goods and then exporting finished products clearly has reached its limits: The raw material supply is becoming increasingly insecure as new countries, especially in Asia, have copied the resource-heavy industrial production processes. The circular economy offers the opportunity to re-strengthen German capital productivity and innovation capacity, while at the same time reducing dependence on raw material imports.
Already in 1996, the German Closed Substance Cycle and Waste Management Act came into force, which named the promotion of the circular economy as an explicit goal. The act also defined a “waste hierarchy,” according to which waste is to be avoided first and foremost and waste-management planning is also to be oriented towards this goal. Only if this is not feasible should waste be reused, recycled or (ultimately) incinerated. Landfilling of waste without prior treatment has been practically prohibited in Germany since 2006 due to the requirements of the "Technical Guidelines on Municipal Solid Waste." In combination with the introduction of extended producer responsibility for packaging waste as well as the "can deposit," Germany set the bar worldwide in the 1980s and 1990s for a comprehensive waste policy that was geared to the goal of safe disposal, stipulating that waste should no longer pose any direct danger to the environment and especially to the German population. One ensuing result, for example, was that the specifications for pollutant loads from waste incineration plants were also tightened considerably - in the production of the necessary technologies, Germany is still very well positioned today, even in global competition; technologies for incineration plants are exported to almost all countries in the world and contribute to the protection of the environment there. The "Status Report on the German Environmental Service Sector" lists exports of environmental technology worth more than 5 billion euros for 2018. Overall, more than 300,000 people are employed in these fields of the circular economy in Germany, generating a gross value of more than 28 billion euros.
However, the success of such downstream environmental protection is contrasted by other core aspects of the circular economy, in which Germany is treading water. Despite the unambiguous legal requirement to consider the avoidance of waste as a priority task, the amount of waste generated in Germany has been rising continuously for years to over 400 million tonnes per year – although not quite as fast as the gross domestic product. Similarly, raw material consumption (RMC) continues to rise and is now over tonnes. The "relative decoupling" of waste production from the GDP, however, is misleading, as it is due, for example, to the decline in waste from mining, i.e. it is more a consequence of structural change than the success of concrete waste prevention measures. In many areas, it can be shown that industry naturally strives to reduce material use and waste quantities per product, for example through ever- thinner packaging; however, such efficiency gains are regularly overcompensated for by the increase in production and sales volumes. For example, the amount of plastic packaging has more than doubled in the last 20 years, driven in part by changes in consumer habits such as eating and drinking "to go."
Despite these environmental as well as economic benefits, the transformation towards a circular economy has stagnated also with regard to the closure of material loops; more than 88% of the raw materials used in the German industry are still virgin materials (see Figure 1). Germany continues to be one of the countries with the highest recovery or recycling rates worldwide for most waste streams. However, it can be seen that the recovery rates measured in this way do not necessarily say anything about whether industry actually wants to use the secondary raw materials obtained in the process – the quality of the recovery processes and thus also of the raw materials obtained plays no role in the recycling rates as calculated traditionally. If we look at the circular economy rate, for example, as one of the European Commission's core indicators for the transformation to a circular economy, we see that the development in Germany has been stagnating for years and countries such as the Netherlands – for various reasons – have now clearly overtaken Germany.
Despite impressively high recycling rates – of over 90 per cent for packaging, for example – the share of recycled materials in plastic packaging, for example, is only around eleven per cent; a large portion of what is considered recycling? is still only "thermally recovered," i.e. simply incinerated. The German economy is thus still largely based on primary raw materials whose supply situation the European Commission considers critical (European Commission 2020a), which have to be imported and which are increasingly exposed to price fluctuations. The indicator for circular economy mentioned in the German Resource Efficiency Programme "Direct and Indirect Resource Savings Effects through Recycling" (DIEREC), which strives for the conservation of natural resources through the use of recycled materials, is less than 20 percent. In Germany, a lot of recycling is done to meet quotas, but so far neither industry nor the environment benefit sufficiently from these efforts.
The business model of the linear economy is based on maximizing material throughputs that become waste after products have been used for as short a time as possible. According to this logic, waste avoidance is primarily detrimental to business: If products last longer or are easier to repair, the sales of new products and thus the company's profits decrease. The development of new, circular business models is therefore needed so that, from the point of view of business, investments in circular design or take-back systems for their products actually pay off.
Studies by the OECD or the Circular Economy Initiative Germany (2020) point to the potential of such business models, which are often associated with higher initial investments, but can achieve significantly higher returns in the medium and long term. The fact is, however, that there is either hardly any data available on their actual distribution and market relevance. If such data exist e.g. for carsharing they show that these circular business models are of limited relevance with a market share of below 1%.
A Widely Accepted Necessary Transformation and its Barriers
The transformation to a circular economy is thus faltering in various places in Germany, despite the constant stream of findings regarding the many advantages actually associated with it (Weber/Stuchtey 2019). The reasons for this are certainly complex, but the classic environmental policy instruments increasingly seem to be reaching their limits. This can be exemplified by the above-mentioned challenges of ever-increasing waste volumes and the low proportions of recyclates shown.
In order to avoid waste (top level of the waste hierarchy), the EU Waste Framework Directive obliges all member states to draw up a waste prevention program that contains both measures that have already been implemented and those that are still in planning stages as well as indicators and desired targets. In Germany, the federal and state governments have developed a joint program that was updated at the beginning of 2021. This was preceded by an evaluation of the predecessor program, which very clearly highlighted that although the waste prevention program is perceived as a helpful source of information, it can hardly lead to significant results in practice. In addition, the actors relevant to waste prevention, such as municipalities or associations, often lack the financial and human resources for programs to succeed. While the costs for disposal are apportioned via waste charges, a comparable mechanism for prevention has been lacking up to now. Finally, the generation of waste can hardly be prevented with instruments of waste law, which focus mainly on hazard prevention, and only apply to the prevention of waste in exceptional cases. Waste legislation only takes effect long after the waste has been produced; incentives for avoidance, on the other hand, would have to be created much earlier in the value chain.
On the topic of recyclates, in order to increase their use, the new Closed Substance Cycle Waste Management Act (KrWG), for example, provides for even stricter requirements for federal authorities than for private companies. For example, § 45 para. 2 requires that authorities "give preference to products that [...] have been manufactured using recyclates [...]" in the context of public procurement; exceptions are only provided for in the case of "unreasonable additional costs." Here, too, however, practice shows that public procurement decisions cannot be shaped in essence by waste law; the shares of secondary raw materials, for example in the construction sector or in plastics, remain at their still-too-low initial levels. Similarly, in various laws on individual waste streams, such as the Packaging Act or the Waste Electrical and Electronic Equipment Act, there are requirements to design products in a recycling- or repair-friendly way, but here there is a complete lack of concretization that would enable the authorities to enforce prohibitions on market access for individual products. And even regulations in the core area of waste law, such as requirements for the separate collection of waste in the Commercial Waste Ordinance, have only limited effect in practice because they are hardly enforced due to a lack of political will and personnel resources; sanction mechanisms are hardly provided for here. Overall, the various waste legislation regulations do not yet provide a consistent framework that could actually promote the necessary transformation to a circular economy.
With the German Resource Efficiency Programme (ProgRess), the German government has presented a comprehensive strategy for the protection of natural resources, which identifies possible starting points along the entire value chain, including attention to the topic of "resource-conserving business models." Here, for example, ProgRess will contribute to "supporting digital business models and identifying and taking into account possible risks [...]" (BMU 2020: 47). On this basis, research projects can be justified or corresponding references can be anchored in the "Environmental Digital Agenda" of the Federal Ministry for the Environment and thus indirectly and in the long term positively influence the framework conditions for circular business models. However, the niche status of such approaches and the obstacles responsible for them, as stated above, leaves many factors unaddressed.
In addition to the German Sustainability Strategy, the High-Tech Strategy 2025 of the Federal Ministry of Research, the Raw Materials Strategy of the Federal Ministry of Economics and Technology and the "National Programme for Sustainable Consumption," there is also a whole series of other strategies that all have interfaces with the topic of circular economy, without providing a consistent overall picture that would, for example, allow economic actors to align their investments with a jointly supported vision. The circular economy is not a goal in itself, but is intended as an instrument to contribute to overarching goals such as climate neutrality and resource conservation. In contrast to climate protection, however, resource conservation, as a strategy to create a circular economy, lacks concrete and quantified targets and sanction mechanisms; for industry, it is thus only a limited guide to action.
Circular Economy in Practice: What Needs to be Done?
On the European level, the Commission has launched its “Circular Economy Action Plan” in 2020, which has set extremely ambitious targets for the next decade, inter alia a 50% reduction for residual waste and the creation of 700,000 new circular jobs. In Germany, it is becoming increasingly obvious that such a radical transformation will require a completely new policy approach: Environmental policy instruments such as waste legislation alone will clearly not be sufficient to overcome the existing and firmly established linear economic system. Recycling quotas and minimum technical standards for treatment processes form important framework conditions and indirectly create economic incentives for improved product design or innovations that help the economy in its way towards circular business models – these can certainly be better coordinated and more ambitiously designed. In the end, however, the circular economy in Germany fails primarily due to the lack of integration into other important policy areas.
The circular economy is a cross-cutting political issue that, like climate protection, requires an integrated policy approach. The debate on both the concrete content and the process of such policy integration is still in its infancy in Germany. Where are the key levers for the circular economy beyond classic environmental policy? What have been the most significant obstacles so far, and what could be decisive drivers in the future? In what follows, initial approaches and cornerstones are identified at both the national and EU levels. In addition to the more traditional topics such as innovation and industrial policy, policy topics that have hardly been systematically considered from the perspective of the circular economy will also be considered.
Innovation and Research Policies
The transformation to a circular economy is essentially an innovation policy challenge. Central to this is the generation and implementation of new knowledge with a view to the functioning of systems and the change of the existing linear system. On the topic of the circular economy, the Fraunhofer Institute for Systems and Innovation Research (ISI), as part of a study commissioned by the Federal Environment Agency, comes to the conclusion "that the transformation towards the circular economy in Germany is still in an early development phase with little momentum" (Gandenberger 2021: 35). For purposes of the study, various functions of an innovation system were considered, for example "knowledge development and diffusion," the support of "entrepreneurial experimentation" and "market development," all of which are only slowly gaining relevance. The study attests to a high level of societal interest in topics such as offers to extend the product life or waste avoidance (concretely evident, for example, in the rapidly increasing number of unpacked shops in Germany). With regard to the function "influence on the direction of the search," i.e. bringing about a consensus on necessary innovations and measures, reference is made to the role of the European Commission, but here the conclusion is that "these initiatives in Germany – beyond government research funding – do not seem to contribute to a significant 'mobilisation of resources' so far, or [they] do not translate into ambitious political steering."
An important point here is certainly research funding, where the topic of the circular economy as an integrated approach is only slowly coming into focus, even if there are initial funding programs that support more innovative forms of research. In the context of the framework program "Research for Sustainability," for example, the Federal Ministry of Education and Research has explicitly called not only for interdisciplinary research and the involvement of practice partners in the funding call "Resource Efficient Circular Economy – Plastics Recycling Technologies," but also named the coverage of entire value chains as a funding requirement. In contrast, the classic funding instruments of the German Research Foundation, for example, are still generally very discipline-oriented; integrated courses of study on the topic of circular economy have also hardly become established in university education.
Industry and Economic Policy
As described, the topic of the circular economy is a central component of an industrial policy agenda at the European level: The transformation from the classic linear model to the circular economy hinges on ensuring that European industry can maintain its competitiveness in the future. In the medium and long term, the inherent risk is that the current efficiency advantage in linear production can hardly be maintained, given the pressures of high wages and social and environmental standards, that threaten survival in globalized competition. From this point of view, the global competitiveness of Europe as an industrial center will be secured if Europe moves to a circular economy in which both direct cost savings can be achieved through the use of secondary raw materials and indirect effects come to bear (i.e.the establishment of new business models, increased innovation activity through new forms of cooperation and improved access to capital markets in which contributions to climate protection and resource conservation are increasingly weighted).
The circular economy is also seen here as a counter-model to modern "commodity colonialism,” the model whereby individual economic powers secure access to raw materials through direct investments in emerging and developing countries, for example China in various African countries. Instead, import dependency is to be reduced by recycling raw materials.
The Industrial Strategy 2030 of the Federal Ministry of Economics and Technology also names the circular economy as an important strategy element in this context, referring to the raw materials strategy: "Against the backdrop of increasing raw material consumption worldwide and the finite nature of numerous primary raw materials, secondary raw materials are increasingly coming into focus" (BMWi 2021). However, with regard to the individual measures, there is a clear difference between securing raw materials, which the Industrial Strategy supports very specifically, for example, through guarantees for untied financial loans or the establishment of competence centers, and the topic of circular economy, where there is relatively vague and non-binding talk of dialogue processes and support for research projects (measures 12 and 13).
In the discussion on the transformation to a circular economy, the focus has so far been primarily on its associated socio-economic benefits. The European Commission, for example, speaks of up to 700,000 new jobs that are to be created by 2030 through the implementation of the Circular Economy Action Plan. In addition, existing jobs are anticipated due to an increased competitiveness of important industrial sectors (European Commission 2020). However, this focus on net benefits should not obscure the fact that a transformation on the scale of the circular economy involves massive changes that will lead to relevant parts of the classic linear industry encountering economic difficulties and being forced to make massive job cuts. According to industry statements, the ban on disposable plastic tableware alone has led to the loss of thousands of jobs in the EU. While new jobs will almost certainly have been created in the manufacture of reusable alternatives and in the cleaning and logistics industries required to manufacture them, these are not exactly replacements, as they are presumably in different locations and with different skill requirements. Research by the UK Waste and Resource Action Programme (WRAP) has shown that in the transformation to the circular economy, the loss of one net job actually creates employment opportunity as part of massive structural changes: In gross terms, when two jobs in linear industry are eliminated and three new circular jobs are created in their place(Morgan et al. 2015). If we look at the necessary skills profiles, it is mainly well-paid and low-paid workers who will benefit from the change to a circular economy (in the high-wage sector, for example, the bioeconomy, in the low-wage sector the logistics industry); in contrast, there could be net job losses for middle-income earners, see Table 2.
In order for the circular economy to continue to be perceived as an opportunity and not as a threat, such structural change effects would have to be anticipated in the long term and cushioned by appropriate social policy measures. Among other things, massive investments in education and training would be necessary. If one compares the energy transition and the circular economy as central challenges of structural change in Germany, the burdens of the transformation to a circular economy will certainly not be as spatially centered as in the case of the energy transition, for example in the coal regions, but the overall extent of the shifts is likely to be similar.
Integrated Circular Economy Policy in the Multi-Level System
Such a broad approach to a transformation towards a circular economy raises the question of which level in the multi-level system is best suited in each case. In addition to consistency in content, the coherence of policy-making from the local to the global level will thus also play a central role in determining the success of circular economy policy. In many areas, Europe is the level at which the course is set for the circular economy. In particular, when it comes to prescribing the durability or recyclability of a product, as is the case with the EU's Ecodesign Directive, national rather than regional requirements only make sense in exceptional cases, as the collective buying power of European consumers is needed to persuade globally active companies to actually adapt their production processes to such requirements. The example of the EU chemicals regulation REACH shows that the EU is capable of developing regulations that are then also implemented globally, the so-called "Brussels Effect" (Bradford 2020). For other policy areas, such as trade policy, the EU member states have already formally ceded most of their competences to the EU, which regulates the standards and access requirements for the common internal market. In select areas, even global agreements seem appropriate, for example when it comes to standards for package labelling.
At the same time, the local level, even down to the municipal level, will also have a central role to play if the transition to a circular economy is to succeed. Pioneer cities, such as those organized in the Urban Agenda Partnership on Circular Economy (Jentoft 2018), in a variety of pilot projects, sometimes at the neighborhood level, are demonstrating how the circular economy can function, how it creates new jobs and what concrete technical development needs still arise from it. These are therefore necessary “laboratories” in which innovations can develop until they are mature enough to replace linear structures. In addition to this innovation policy role, opportunities arise at the municipal level to integrate the concept of the circular economy into infrastructure and spatial planning, supported, for example, by regional approaches that encourage industrial symbioses or municipal urban mining cadastres, in which the raw materials used in individual buildings or entire neighborhoods are systematically recorded so that they can be managed in a more targeted manner in the district. Particularly with regard to the first stages of the waste hierarchy, i.e. waste avoidance and reuse, it becomes apparent that the structures required for this must be adapted very precisely to the framework conditions on site. In the future, however, more precise agreements will be needed to work out the concrete distribution of responsibilities, especially when questions of financing are involved, for example, when a new waste prevention program also contains a mandate to examine the extent to which municipalities can also finance waste prevention measures through waste charges. In Germany, the role of the federal states in the circular economy is also still unclear, and there are a range of ways in which it is interpreted and manifested. Some Länder, such as North Rhine-Westphalia or Saxony, have had circular economy or zero-waste programs drafted, while others are focusing more strongly on raw material strategies, etc. The role of the Länder in the circular economy is also still unclear and embraces a range of interpretations. In many areas, the federal states have the role of enforcing the federal government's guidelines, which is also a central function for the transition to a circular economy.
In view of this complex web of functions at both supra- and sub-national level, the question of the actual scope for action at national level remains: Is it even possible in Germany – an EU member state with a federal structure and municipal services of general interest anchored in the constitution – to set binding guidelines and framework conditions for the circular economy at the federal level? In view of the policy areas outlined above, the answer can only be yes; for many areas such as industrial, financial or research policy, the federal government will continue to be the appropriate level for sensibly coordinating processes and content in the sense of the circular economy. In the past, the European Commission has also mainly relied on the instrument of the directive, which gives the member states extensive freedom to go beyond defined minimum standards in implementation. However, the basis for this would of course be a clearly defined federal vision of a future circular economy in Germany that is jointly supported by all actors, with an integrated strategy on how the path to this goal could be shaped.
Outlook: Circular Economy at the Crossroads
It seems clear that the next government will re-structure the German circular economy policy landscape. Currently German is at a crossroads: It could re-gain its position as front runner of a global circular economy movement (like it was in the 1990s), it could leave this topic to the European Commission (which currently is the key driver of this debate). There is of course also the big risk that like in the area of digitalization, Germany could simply fall behind, risking the foundations for future socio-economic well-being. Unfortunately many other developing countries that in the past used to look at Germany for waste policies could use this as a pretext for continuing on their linear development pathways.
In view of the multitude of technologies under development, potential circular business models and possible regulatory approaches, this raises the question of prioritization and the necessary framework conditions: What would be the cornerstones for advancing the transformation to a circular economy at the necessary speed with high efficiency? Two points should be named here as an approximation to this question:
- The circular economy must learn more from climate protection models.
- The circular economy needs new formats and clear responsibilities.
What Can be Learned from Climate Protection?
Climate protection on the one hand and resource protection through the circular economy on the other are of course very different in their concrete challenges, have completely different actor structures and need specific approaches to solutions. Nevertheless, they have great similarities in many areas: Both are environmental policy challenges that require a fundamental process of transformation and cannot be "solved" by individual actors, but at the same time have considerable socio-economic potential for Germany as an industrial location. Both topics are also linked to socio-political challenges (keyword "energy poverty"), the overcoming of which will be quite decisive in gaining the population’s approval for individual measures.
However, the discourses differ considerably in their "degree of maturity": Climate policy can now draw on almost three decades of experience with concrete instruments: The Electricity Feed Act, the predecessor of today's Renewable Energy Sources Act (EEG), was passed as early as 1991, and subsequently became a global prototype of a market-based instrument for climate protection.
Therefore, a much more intensive exchange of experiences on which concepts and approaches from climate policy could be transferred to the circular economy would be appropriate:
- What concrete lessons could be learned from the EEG, for example, for the design of minimum recycling quotas?
- To what extent could the concept of a CO2 tax be transferred, for example, to the ecological footprint or ecological rucksacks of individual products? What role does the use of such tax revenues also play? Would a concept like the emissions trading system be usefully transferable to the circular economy?
- Would a comprehensive set of regulations analogous to the Climate Protection Act be conceivable for the circular economy? Would it be possible for example? In addition? to develop specific sectoral requirements for the circular economy, non-compliance with which would be subject to financial sanctions?
Beyond the transferability of concrete instruments, the advocates of the circular economy should reflect on how political majorities could be formed for such an enormous transformation process.
Processes, Priorities and Formats
Of course, there is no lack of proposals, roadmaps or key point papers for the support of the circular economy that have been presented by different political entities, research projects and representatives of individual lobby groups. They all contain a multitude of differently detailed instrument proposals, starting points along individual value chains or proposals for quantified goals of a circular economy. In view of the still faltering transition to a circular economy, three political tasks can be identified in order to build on this and position Germany as a global pioneer again (which will also require proactive participation in shaping European framework conditions, as the mere 1:1 implementation of EU requirements falls short of the pressing needs of the future).
1. Prioritize. Comprehensive transformation processes such as the transition to a circular economy have, on the one hand, the charm that contributions to the circular economy are possible at virtually every stage of the value chain – from product design to disposal – as well as for each individual material stream, and for each waste stream. Yet from the point of view of both political decision-makers and companies, this charm amounts to a practically unmanageable variety of possible measures that could contribute to the circular economy in the most diverse ways.
Clear, transparently derived political priorities would be of enormous benefit here, so that industry, for example, could coordinate long-term investment decisions or research developments. In view of the complexity of possible side effects and possible trade-offs between individual areas of action, etc., an improved data basis and further research efforts are needed in many In many places, however, what is needed even more urgently is a political weighing up of scope for action and feasibility along the entire life cycle. This is not a question of either-or; it is about planning and investment security and guard rails for medium-term developments.
2. Define responsibilities. No one can manage the circular economy alone, neither in practical implementation nor in setting the political framework. As a cross-cutting task, the circular economy requires new forms of cooperation along the entire value chain, in which a large number of different actors must be involved. However, this also raises the question of the distribution of responsibilities, both for successes and for steps that are still necessary. If one compares the circular economy to classic waste legislation, it is very clear who is responsible for complying with limit values or achieving plant-related recycling quotas. In the circular economy, it is usually much more difficult to assign responsibilities: Who exactly is responsible, for example, for the fact that the total volume of waste in Germany is not falling significantly?
Against this background, the circular economy needs clearly designated responsibilities, both for individual processes and their results. For the latter, among other things, a set of indicators is necessary to record developments in the various fields of action and subject areas: How can we tell, for example, whether products are becoming more durable and/or repair-friendly on average? Or whether packaging has actually become more recycling-friendly in recent years? At the same time, there would also need to be responsibilities for the content, based, for example, on the "climate cabinet" in combination with separate staff units in the various houses. Analogous to the Climate Protection Act, concrete responsibilities could be defined within the framework of a national circular economy strategy, of the kind that various countries have already developed.
3. Transparency of opportunities and risks. The transition to a circular economy is without alternative for reasons of climate and resource protection; the linear economy will sooner or later lead to a dead end. Those who position themselves therein in good time – be it as an individual company, sector or entire national economy – will be able to significantly increase their competitiveness and tap new economic potential. When considering the opportunities, however, the associated risks and potential losers must not be lost from view: The linear economic system is so firmly established because it has made Germany a very successful business location, from which broad sections of the population continue to benefit today. The transformation to a circular economy will thus inevitably cause enormous uncertainties that have hardly been addressed so far.
Political support is needed here in order to address such risks and fears at an early stage and to prevent central actors from blocking the process. As described above, this includes clear concepts for the provision of circular qualification profiles, but also a political discourse on how the gains and losses resulting from the transition to a circular economy are distributed fairly. Many actors at the beginning of the chain, for example packaging manufacturers, are already questioning why they should increase the recyclability of their products at enormous financial expense if it is primarily the recycling economy that will profit from this in the end. Closely related to this is the risk of oligopolization of entire sectors: With a view to optimizing the entire product life cycle, large players will be tempted to take complete control of value chains – from product design to disposal – in order to secure secondary raw material sources. From the point of view of the circular economy, this may even make sense; from the point of view of competition or consumer protection, however, completely new, hitherto scarcely discussed questions then arise regarding the long-term safeguarding of innovative strength in terms of the circular economy.
Conclusion: The Circular Economy as a Task for Political Decision-Making
The considerations expressed here on the necessity of the circular economy, on possible instruments and necessary framework conditions make it clear that the transformation to a circular economy must be understood as an urgent political task. The classic instruments of environmental policy and especially waste legislation are clearly reaching their limits when it comes to such a comprehensive process of change. At the same time, it is clear that the market alone will not be able to manage this process, especially at the necessary speed. Innovative policy approaches are therefore needed, but above all, what is required is an integrated approach that conveys a positive vision of a circular economy and thus also prepares the ground for social acceptance. A national circular economy strategy could provide an important building block for such a process.
This Backgrounder is published in the framework of the European-Israeli Forum for Environment and Sustainability, a collaboration between the Israel Public Policy Institute (IPPI) and the Heinrich Böll Stiftung Tel Aviv.
The opinions expressed in this text are solely that of the author/s and do not necessarily reflect the views of the Israel Public Policy Institute (IPPI) and/or the Heinrich Böll Stiftung Tel Aviv.