Designing policies

There are multiple aspects to the design of products, services and systems fit for a circular economy: design of the product/service/system itself, design of the business model, design of the policies that incentivise a circular economy approach to become the norm. Circular designs and business models can already happen but when policy also aligns to support it, then we can really see the circular economy flourish at scale because the rules will be encouraging the whole system to shift. After all, how circular can you be in a linear system?

In 2021, the Ellen MacArthur Foundation published a paper which recommended five Universal Policy Goals (UPGs). Let’s look at them in turn:

Goal 1: Stimulate design for a circular economy. This looks at how policy can incentivise the switch to circular design practices and circular business models at scale and across sectors.

Goal 2: Manage resources to preserve value. Where Goal 1 supports the transition to circular designs, production, and business models, Goal 2 focuses on developing a rich system of resource management that keeps these goods and materials in productive use and at high value. These two policy goals go hand in hand and reinforce each other.

Goal 3: Make the economics work. To support the development of the resource flows that are the focus of Goals 1 and 2, Goal 3 focuses on creating the economic conditions needed to scale circular outcomes.

Goal 4: Invest in innovations, infrastructure, and skills. This focuses on using public finance capabilities to invest in circular economy opportunities and skills, and mobilise private investment.

Goal 5: Collaborate for systems change. Finally, to achieve an economy-wide transition to a circular economy, new international alignment and collaboration mechanisms will be needed. Goal 5 focuses on the ‘how’ of policymaking for system change – the mechanisms for developing new policies and aligning existing ones in order to unlock a systemic, economy-wide transition to a circular economy.

The UPGs were designed with a global outlook, and in consultation with the World Bank, UNEP, and UNIDO, as well as with the private sector. They are not designed to be prescriptive: every nation and region has to operate within its own context. Each goal is supported by a list of example policy measures, and countries can determine where they should focus first.