Ratio Working Paper No. 338 Breaking Circular Economy Barriers

Abstract

Despite high estimated economic gains the implementation of a circular economy (CE) in most areas is generally slow. The purpose of this paper is therefore to examine the potential causes to this sluggish implementation and to discuss and illustrate how different types of barriers (technological, market, institutional and cultural) can prevent the further implementation of a CE. We conduct a systematic literature review where academic articles and “grey literature” on the barriers to a CE transition are analysed and classified into technological, market/economic, institutional/regulatory, and cultural/social barriers. We approach the research problem in a twofold way. Firstly, we recognize the barriers that currently seem to hinder a CE from developing. Secondly, we map these barriers to better understand how they are interdependent and entangled. Our main conclusion is that even small barriers can stop the emergence of a CE.

An Anatomy of Failure – Wind Power Development in China

Article (with peer review)Publication

Grafström, J.

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.

Government Support to Renewable Energy R&D: Drivers and Strategic Interactions among EU Member States

Article (in press)Publication

Grafström, J., Söderholm, P., Gawel, E., Lehmann, P., & Strunz, S.

Publication year

2020

Published in

Economics of Innovation and New Technology

Abstract

Although the climate challenge requires proactive policies that spur innovation in the renewable energy sector, various countries commit vastly different levels of support for renewable energy R&D. This paper addresses the question why this may be the case. Specifically, the objective is to analyse the determinants of government support to renewable energy R&D in the European Union (EU), and, in doing this, we devote particular attention to the question of whether the level of this support tends to converge or diverge across EU Member States. The investigation relies on a data set of 12 EU Member States and a bias-corrected dynamic panel data estimator. We test for the presence of conditional β-convergence, and the impacts of energy dependence and electricity regulation on government R&D efforts. The findings display divergence in terms of government support to renewable energy R&D, and this result is robust across various model specifications and key assumptions. The analysis also indicates that countries with a low energy-import dependence and deregulated electricity markets tend to experience lower growth rates in government renewable energy R&D. The paper ends by discussing some implications of the results, primarily from an EU perspective.

Breaking Circular Economy Barriers

Article (with peer review)Publication

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.

Ratio Working Paper No. 338 Breaking Circular Economy Barriers

Working Paper No 338

Abstract

Similar content

An Anatomy of Failure – Wind Power Development in China

Government Support to Renewable Energy R&D: Drivers and Strategic Interactions among EU Member States

Breaking Circular Economy Barriers