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What’s holding back the transition to Circular Economic Business Models in Europe? Stakeholder perspectives.
The threats to economic development and social welfare in the face of rapid depletion of natural resources and negative environmental impact - driven by traditional economic and business models - have led policy-makers across the globe, including the European Union, to seek interventions that promote circular economic business models. Such models may be defined as those which create, deliver and capture value in a manner that enables efficient and regenerative use of finite resources and that would keep products, components and materials at their highest value and utility. The nascent literature documenting circularity and its determinants suggests, however, that at both the business level as well as in policy intervention itself, barriers are present which could delay the transition to circularity. This paper contributes to the literature by documenting the key determinants of the uptake of circular economy business models, drawing upon an extensive set of interviews and consultation sessions conducted with stakeholders (including policy-makers, pressure groups, business executives, researchers, professional bodies, politicians and consultants) in multiple countries across Europe (including Spain, Brussels, Warsaw, France, Germany, UK, Switzerland, the Netherlands Israel and Malta). The issues are now being synthesised and will be a ranked using multi-criteria decision analysis in dedicated focus group sessions (envisaged 40 participants from pan-European policy and business in February 2019). Initial results indicate that at the company level, high-level commitment, long term visions, staff members' motivation and the promise of enhanced competitiveness drive the transition, while business financing models, resistance to change and the perceived lack of consumer demand act as obstacles. Multi-stakeholder platforms, citizen awareness and dedicated circular-economy policy act as positive pressures, while poor waste management legislation and enforcement, the lack of mandatory circular targets hinder the transition. Relative prices also continue to favour virgin material extraction as does public procurement led by financial criteria. At the EU level itself, funding programmes, the EU Action Plan for the Circular Economy, as well as the Plastics Strategy emerge as important enablers, but lack of harmonisation across the EU and obstructive regulation were found to be key obstacles. The need for environmental tax reforms, for material quality standards, and more broadly, for wealth-measurement systems other than GDP emerge as powerful (if unsurprising) recommendations with a view to overcoming obstacles for Europe to transition towards a circular economic model.