Moving Faster towards a Circular Economy: A Review of Policies and Indicators

Finland’s Strategic Programme for a Circular Economy seeks to increase both resource productivity and circular material use rate twofold by 2035. Evidence suggests that current policies may not be adequate to reach these targets. Consequently, greater efforts are needed to bridge the gap. The purpose of this report is to review policy instruments that have been proposed in the context of circular economy (CE), describe how they operate and differ, while also highlighting existing indicators for evaluating progress in the adoption and use of CE practices. Current indicators for measuring the CE, though still limited in scope, provide valuable insights into the direction of CE development. A range of policy tools have been identified to promote CE, encompassing fiscal measures like taxes and subsidies, standards, informational guidance, and financing. Pricing externalities across the value chain through taxes or fees could serve as a powerful incentive for sustainable production and consumption choices. But implementation of a system with multiple policy interventions requires careful analysis. One potential approach to accelerate the transition is the targeting of R&D subsidies for CE solutions.