Facilitated application of selected tools from theToolkit for policymakers report

INTRODUCING THE ELLEN MACARTHUR FOUNDATION PLUG-AND-PLAY TOOLS

WHAT IS THE TOOLKIT?

2

We have developed a circular economy Toolkit forpolicymakers, with Denmark as a case study, givingpolicymakers who wish to embark on a circulareconomy transformation access to the tools andmethods they need.The report underlines that circular businessopportunities are mainly hindered by non-financialbarriers. It suggests that a sector-by-sectorapproach is the most appropriate to identify themost relevant opportunities, barriers and policyoptions. Furthermore, system-wide measures, suchas broader changes to the fiscal system, couldsupport the transition towards the circular economy.

PROJECT MEMBERS

Sponsor

Key contributors

Core project team

International public bodies and academics

EXTERNAL STAKEHOLDERS

Danish ministries

Danish stakeholders incl. industry associations, unions

Individual businesses

The Toolkit was developed in collaboration with the Danish Business Authorityand Danish Environmental Protection Agency as key contributors to the pilotphase; analytical support was provided by the McKinsey Center for Businessand Environment, with macroeconomic and policy analysis were provided byNERA Economic Consulting, and funding from MAVA Foundation. In addition, alarge number of stakeholders were involved as contributors, including 25+Danish and international businesses, a number of policymakers, academics andother society stakeholders.

WHAT ARE THE PLUG AND PLAY TOOLS?

3

Since the Toolkit launch in June 2015, there has been a great deal of interest frompolicymakers to apply the methodology. To make this new analytical approachpresented in Toolkit more accessible for a broader audience The Ellen MacArthurFoundation has developed a suite of easy-to-use Plug-and-play tools. They movethe methodology one step further by offering flexible and customizable advancedtemplates to guide the analyses

The Plug-and-play tools facilitates assessment of circular economy potentials for the steps where it is most needed.• The methodology includes: aligning on starting point, ambition and focus;

assessing sector specific opportunities; and analysing economy-wide implications

• It is critical for policymakers to take a collaborative approach, engaging all relevant business and society stakeholders

DISCLAIMER: None of the plug-and-play tools provide the first hand data needed to conduct the analysis.They provide a methodology and framework for assessment. While the plug-and-play tools can be used forstand-alone analyses, the most powerful impact can be achieved when using them as part of the overallmethodology described in Delivering the circular economy – a toolkit for policymakers. The Ellen MacArthurFoundation does not assume responsibility for any of the outcomes of applying the tools.Please reference the Plug-and-play tools as follows: “Ellen MacArthur Foundation, Delivering the circulareconomy – a toolkit for policymakers (2015)”

THREE PLUG-AND-PLAY TOOLS AS A COMPREHENSIVE “HOW TO” GUIDELINES

Food and beverages

Basic metals and fabricated products

Rubber and plastic products

Pharmaceuticals

Electronic equipment

Other manufacturing

Electricity and gas

Water supply, sewage and waste management

Wholesale

Retail

Transportation services

Other services

Agriculture, forestry and fishing

Mining and quarrying

Machinery and vehicles

Circ

ular

ity p

oten

tial

Role in economy

Sector prioritisation

Sector selection

Impact quantification

Barrier identification and policy prioritisation

I

II

III

5

• SECTOR SELECTION

Target outcome: To assess which sectors in the economy would be most relevant to screen for circular economy opportunities.

Methodology• Sectors are assessed on two

dimensions: Role in the economy and Circularity potential

• Each dimension is an aggregate of a number of metrics chosen by the user

• Metrics are either purely quantitative (e.g. employment, contribution to GVA, resource consumption) or semi-quantitative (quantities derived from a series of qualitative inputs)

• IMPACT QUANTIFICATION

Target outcome: To quantify the potential impact of a given circular economy opportunity at sector level, based on detailed, bottom-up estimates.

Methodology• A bottom-up estimate is made of

the value of each opportunity in one sub-sector

• The sub-sector impact is then scaled up to sector level using a top-down estimate of ‘scalability’

• A range of ‘modules’ can be employed to assess different types of opportunity

NOTE: This tool analyses one activity at a time – the user needs to run a separate analysis for each identified opportunity.

THE PLUG-AND-PLAY TOOLS IN A NUTSHELL

Input and expertise required Economic, environmental and other data at sector level, ideally with a historical time series. Expert input from economy and environment specialists to qualitatively assess scope for circularity.

Input and expertise required Data by sub-sector or product category for the sector assessed (will vary by type of opportunity assessed). Company interviews are required to assess and validate potential cost savings and adoption rates.

I II

6

• BARRIER • IDENTIFICATION AND • POLICY PRIORITISATIONTarget outcome: Assessment of key barriers to the implementation of each opportunity, and identification and scoring of potential policy options to address these barriers

Methodology• A framework with 16 barrier types

is used to identify key barriers on a 3-grade scale

• For each barrier, the user identifies potential ways to address them using policy instruments of 6 types

• The policy options are scored on their potential impact (short- and long-term) and their cost of implementation

NOTE: This tool analyses one activity at a time – the user needs to run a separate analysis for each identified opportunity

ASSESSMENT SUMMARY TEMPLATE

A complementary is available which provides a template to summarise the results from the impact quantification, barrier identification and policy prioritisation exercises.It is not a tool in itself, but as the user will likely handle several complex spreadsheets, this is a helpful way of summarising and presenting the results.

THE PLUG-AND-PLAY TOOLS IN A NUTSHELL

Input and expertise required: Interviews with companies, relevant authorities and policymakers to identify and assess barriers and policy options.

Total GVA 10-year CAGR Total Employment 10-year CAGR Export volume Import volume

1 Food and beverages 4,698 0.12 18,649 0.10 7,304 1,232

2 Basic metals and fabricated products 4,612 0.06 51,767 0.03 11,130 4,159

3 Rubber and plastic products 3,722 0.03 46,089 0.02 11,918 3,847

4 Pharmaceuticals 2,289 0.03 32,881 0.02 3,583 1,990

5 Electronic equipment 2,378 0.09 18,668 0.02 4,950 1,136

6 Machinery and vehicles 1,059 0.03 12,379 0.01 1,980 1,009

7 Other manufacturing 7,560 - 80,518 - 22,900 7,967

8 Electricity and gas 14,885 0.07 135,664 0.04 13,436 3,773

9 Water supply, sewage and waste management 9,264 0.04 119,094 0.04 1,385 4,722

10 Wholesale 7,199 0.08 125,300 0.06 12 691

11 Retail 7,191 0.09 2,228 0.06 5 982

12 Transportation services 6,497 0.02 4,255 0.07 4,580 339

13 Other services 3,786 0.08 15,212 0.07 23,608 20,635

14 Agriculture, forestry and fishing 3,640 0.04 9,740 0.04 1,301 1,248

15 Mining and quarrying 2,923 0.06 30,292 0.02 3,188 1,807

16 - - - - - - -

17 - - - - - - -

18 - - - - - - -

19 - - - - - - -

20 - - - - - - -

21 - - - - - - -

22 - - - - - - -

23 - - - - - - -

24 - - - - - - -

25 - - - - - - -

This sheet contains charts for each sub-dimension plotting the relative contribution of each sector. This charts can be used, for example, by copying them into a presentation to provide additional background on the sector selection.

Sector contribution to economy Sector contribution to employment and job creation Trade openness and security of supply

Role in economy

All Plug-and-play tools come with extensive instructions, guidelines and worked examples

III

7

NATION, REGION OR CITY?The Plug-and-play tools are designed to be flexible and adaptable to the user’s context and needs. As such, they can be used at any level of government.

However, data constraints typically make it difficult to assess cities using traditional metrics. In addition, few sectors or value chains are confined to city boundaries.

WHO ELSE CAN USE THE TOOLKIT?Companies and educators might find it useful to use the Plug-and-play tools for analysing circular economy opportunities.• The Sector selection tool could

be tuned by companiaes to compare business opportunities across regions/markets.

• The Impact quantification tool is designed to evaluate business opportunities on a high level, and so could be used by companies and academics.

FLEXIBILITY IN APPLYING THE PLUG-AND-PLAY TOOLSThe plug and play tools are designed to be flexible, to suit any context and starting point, and to allow for analysis of a wide variety of opportunities. The user has the option to go in-depth in the analytical work or to remain on a moderate to high level.

The tools draw on knowledge from years of research within the Ellen MacArthur Foundation. For example, the Impact Quantificationtool has a database of 50+ estimated impacts from previous research, which can be used to guide further analyses.

However, the tools cannot produce meaningful results without significant user input. The more carefully researched and credible the input data, the more meaningful will be the results.

THE TOOLS TARGET A WIDE AUDIENCE

READ MOREFor more details and the other tools in the Toolkit, policy case examples, and an FAQ, please see the original report and the Toolkit website.

Global Partners of the Ellen MacArthur Foundation: