Scenario Analysis for a Circular Economy

Workpackage: 

WP5 Impact Assessment

The transition from a linear economy to a more circular economy requires systemic changes involving a wide range of interconnected actors, sectors and geographies. Prospective analyses of the systemic changes required can be carried out via scenario-based approaches. This report examines different approaches to carrying out scenario analyses. The paper distinguishes three scenario approaches that use different starting points for the analysis: one approach starts with available opportunities that may be realised, another starts with the targets to be reached, and the third starts with the policies implemented. The role of case studies as analyses of circular opportunities is discussed. In addition, the role of outcomes of circular scenarios for the European Semester, i.e. a governance framework of the European Commission to coordinate policies between the European countries, is discussed. It is argued that the main focus of future research should be on empirical research to gain better insight into the mechanisms relevant for the transition from circular policy towards macroeconomic and environmental outcomes, which may be implemented in macro-econometric or general models or be used for more causal-descriptive analyses of circular scenarios.