Ratio Working Paper No. 338 Breaking Circular Economy Barriers - Ratio

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Article (with peer review)

Barriers to circularity in the metals industry: an analytical framework of feedback and lock-in effects

Grafström, J., Poelzer, G., & Pettersson, J.

Publication year

2025

Published in

Mineral Economics.

Abstract

The metals sector faces multiple and interconnected barriers to achieving circularity. This study examines steel, aluminum, and copper to illustrate how challenges vary between metals. While copper can often be recycled without quality loss, steel and aluminum face alloy-related limitations that drive downcycling and quality degradation. Using a matrix-based analytical framework, the study maps the interactions between economic, technological, institutional, and social constraints, distinguishing between primary drivers, secondary effects, feedback loops, and lock-in mechanisms. The results show strong reinforcing links between economic, technological, and institutional domains, with social factors playing a more indirect role. These findings align with observed industry patterns while adding a structured, quantitative perspective. By clarifying how different barriers combine and reinforce one another, the analysis identifies priority areas for intervention to advance metals recycling and support the transition toward a more circular economy.

Article (with peer review)

An Anatomy of Failure – Wind Power Development in China

Publication year

2021

Published in

Quarterly Journal of Austrian Economics

Abstract

China is currently the world’s largest installer of wind power. However, with twice the installed wind capacity compared to the United States in 2015, the Chinese produce less power. The question is: Why is this the case? This article shows that Chinese grid connectivity is low, Chinese firms have few international patents, and that export is low even though production capacity far exceeds domestic production needs. Using the tools of Austrian economics, China’s wind power development from 1980 to 2016 is documented and analyzed from three angles: (a) planning and knowledge problems, (b) unproductive entrepreneurship, and (c) bureaucracy and government policy. From a theoretical standpoint, both a planning problem and an entrepreneurial problem are evident where governmental policies create misallocation of resources and a hampering of technological development.

Article (with peer review)

Breaking Circular Economy Barriers

Grafström, J. & Aasma, S.

Publication year

2021

Published in

Journal of Cleaner Production

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.