The nexus between the circular economy and social-ecological transition

Reducing raw material consumption, establishing binding frameworks for a sustainable economy, safeguarding a high level of product quality and enabling a shared positive vision for the future: these are the key tasks to be addressed on the path towards a genuine closed-loop economy. The Oeko-Institut’s new Policy Brief shows how this might look in practice. It offers recommendations for action, but also reveals the challenges: the circular economy needs to become more profitable than the current linear economic model. Climate change mitigation, resource conservation, protection of biodiversity, security of the raw materials supply and human wellbeing can only be achieved with a fundamental transformation of our economic model and consumption.

Focus on more justice and social cohesion

Reducing raw material consumption is the key objective in the transition to a circular economy. In sectors which offer great potential for resource-saving, such as housing, mobility and food, circular economy measures can be aligned with policy instruments for more climate action. In other resource-intensive sectors such as information and communications technology (ICT), textiles and packaging, the aim should be to improve durability and boost product reuse and repair and the utilisation of secondary raw materials. Consumption should satisfy needs while remaining within resource boundaries. Many measures will entail changes in everyday habits and are therefore sensitive from a social policy perspective. However, these changes will also create scope for more justice and social cohesion, free up time and enhance wellbeing.

A Resource Conservation Act for legal certainty

A Resource Conservation Act, like the Climate Change Act, could set binding targets for reducing raw material consumption and define options for verifying compliance. This creates a need for further policy measures: ambitious minimum standards for products in the new European Ecodesign for Sustainable Products Regulation (ESPR), and taxes on single-use and hard-to-recycle packaging, for example. It would also be sensible to introduce Extended Producer Responsibility (EPR) so that businesses contribute more consistently towards the expenses, costs and liabilities associated with their products’ environmental impacts.

Positive approaches already exist: with an effective regulatory framework in place, the waste management and recycling sector has developed into an innovative branch of the economy. Second-hand shops and used goods are attracting a growing number of consumers, while legislation at EU level is breaking new political ground, such as the Batteries Regulation, which entered into force last year.

The Policy Brief is the key publication within the framework of the Oeko-Institut’s donation-funded Circular Economy – An Appeal and Proposals for Closing the Loop project. The project explored options for establishing an effective circular economy.

Policy Brief: The Circular Economy – Social Wellbeing within Planetary Boundaries, by the Oeko-Institut

Further information

Factsheet „Circular Economy – Ein neues Konsumverhalten etablieren“ [Factsheet: The circular economy – establishing new consumer behaviour]

Factsheet „Circular Economy – Lebens- und Nutzungsdauerverlängerung von Elektro- und Elektronikgeräten“ [Factsheet: The circular economy – extending the lifespan and service life of electrical and electronic equipment]

Factsheet „Circular Economy – Rücknahme von Elektroaltgeräten“ [Factsheet: The circular economy – takeback systems for electrical waste]

Factsheet „Circular Economy – Reduktion des Verpackungsaufkommens“ [Factsheet: The circular economy – reducing the volume of packaging]

Blog posts on the circular economy