Breaking Circular Economy Barriers

Abstract

Despite high estimated gains of a circular economy implementation, progress on the macro, meso and micro level is sluggish. The purpose of this paper is to examine, from a theoretical economics perspective, how four barriers – technological, market, institutional and cultural – can prevent the implementation of a circular economy. The barriers that currently hinder a circular economy from developing are identified and a mapping of these barriers is performed to understand how they are interdependent and entangled. The conclusion is that even small barriers could stop the emergence of a circular economy. Even though a circular economy is different from our traditional “linear” economy, the theoretical analysis in this paper gives no reason to believe that a circular economy will not follow the same rules as a traditional economy. There will be property rights, rule of law and price signals guiding the economy. If some of the essential parts of a market are lacking, a weaker circular economy than otherwise possible will materialize.