The transition towards a Circular Economy – Policy Tools and Business Models
Closing the production cycle: severing the connection between consumption and the wasteful use of resources, and production and economic growth.
The world’s economy is currently mostly linear – a product’s life-cycle begins with a production process, moves to consumption and ends up as waste. Both production and consumption are characterized by inefficiency and are wastefully using natural resources, resulting in negative effects on the environment and on personal well-being (depletion of resources; waste; air, water and soil pollution).
Circular economy aims to close the production cycle: to reduce the amount of new resources used together with the amount of waste generated as a result of the processes of production and consumption. This is achieved by using business models enabling re-use of resources, renewable use of products, and recycling.
Since 2012, the Jerusalem Institute for Policy Research has been leading a series of projects and research-papers aimed at setting in motion a transition towards a circular economy. This move is expressed in the development of circular business models and the formulation of policies encouraging the removal of barriers obstructing the implementation of such models, while maintaining the competitiveness of companies and factories. During its years of operation, the Jerusalem Institute has gained comprehensive and unique experience in the field, by working both with business companies and policy-makers. Today the Institute promotes the implementation of such principles in both local and national authorities in Israel, with Yamit Naftali heading the project.
The development of Circular Economy research in the Jerusalem Institute:
The R2π Project:
The R2π project was undertaken between 2016 and 2019. The project took place within the framework of the European Union’s Horizon 2020 program. R2π dealt with the development of business models and circular finance policies, while exploiting opportunities and dealing with market failures in European countries.
The key outcomes of the project are:
- A Tool-Box for implementation of circular economy business models.
- Policy kits – recommended policy tools to help promote a circular economy.
Within the project’s framework, 22 circular economy business models for leading international companies were selected. These companies included: Philips, Rolls-Royce, Inditex, Mud-Jeans and Rock-Wool, among others. This analysis led to the development of policy kits for six different sectors: water, food, construction, plastics, textiles and electronics.
The project’s recommendations were accepted and adopted in the new EU program for promoting circular economies. (EUCEAP 2.0)
The Spree Project
This project was carried out for the European Union during the years 2012 to 2015, as part of the FP7 7th Framework program. In the course of the project, business models were built to differentiate the consumption of products as a service, from buying and owning such products. Policy kits were drafted with the aim of changing consumer behaviour: from the purchase of products to the purchase of services (servicizing). These policy kits dealt with three sectors: water, transportation, and food and agriculture.
The Target Project
This project was carried out as part of the FP7 program for the European Union between 2010 and 2012. It aimed to assist policy makers create a strategic road-map for their research and development policy. Among the project’s outputs were the estimation of technological gaps, recognition of system failures, and the development of effective policies to efficiently focus resources.
The toolkit encouraged policy-makers and government offices to choose their desired modes of involvement in the market, in order to support the growth of biotechnology and innovation-based industries.