Addressing the Circular Economy’s Information Challenges

Awareness of how our behaviour affects the planet is higher than ever. Yet while the majority of countries have taken steps to improve recycling, the steady build-up of defunct electronics, landfills, and mass exporting of waste and old products suggests there is more to be done. The ecological (and moral) case for the circular economy is pretty well established: we all want to see our products put to use one way or another after we have finished with them. But there still seem to be barriers that prevent governments and communities from building the good practices that will make a circular economy a reality.

This paper proposes two key solutions to help address information problems and assist with the upcoming digital-governance problems within the circular economy:

1. A global circular-economy commons (GCEC) can better organise basic and critical information and knowledge around products, materials and practices. The GCEC will function as a global public resource and may be analogously compared to GitHub, Stackoverflow and Wikipedia.

2. Modular, open-source circular services (MOSCS) can provide replicable models of public digital services – from national material and product registries and circular product identifiers to reuse and refurbishment matching platforms and local repairability indexes – that can help the transition from a linear to a circular economy. The MOSCS, once integrated and designed to fit the specific needs and requirements of that nation and local area, will work like a bundled collection of software, like Microsoft Office.

Together, these two proposals can help address information barriers and information-flow problems when paired with investments in public-sector training and organisational capacity to manage and deploy these tools. These proposals are intended only to work in parallel with further regulatory and policy action to drive investment and change, along with local adaptation to the specific context of sociocultural demand, industrial development, and public-sector capacity.

To achieve the climate goals set by the Intergovernmental Panel on Climate Change (IPCC), both high- and low- to middle-income countries need to shift from a linear take, make and dispose economy to a sustainable production and resource model. In the past 40 years, the circular economy (CE) has emerged as a leading framework for rethinking sustainable production and consumption by framing how materials can be sustainably managed in an economy.

Since 2010, the CE has been adopted by both high-income countries (HICs) and low- to middle-income countries (LMICs) to frame industrial and environmental policy. In parallel, commercial and entrepreneurial attention to circular opportunities has grown internationally with $1.3 trillion annual investment driven from startup, corporate and financial-institution initiatives, with the Just Economics research programme identifying $800 billion driven into corporate circular initiatives. Despite this growth, the uptake and adoption of circular practices at scale remains slow and ad hoc.

Improving the expansion and understanding of circularity and its potential relies on addressing a fundamental, underlying issue: the circular economy has a critical information gap. This gap is demonstrated by the lack of consistent, reliable answers to the following: how much of what materials or products are where? Who can do what with those materials or products? What is the value of different options of material use relative to the location of those materials? And who can use them?

A digital product passport, for example, is intended to address the questions of what products are where, what is their current state of use and what is their history of use. With such information, a digital passport for the built environment means effective long-term cooperative planning on repairing parts of buildings, such as air-conditioning systems, as climate and weather changes increase, and on coordinating long-term disassembly of the building.

If national and local information problems are addressed, public and private actors will face less uncertainty and lower costs of experimentation for pursuing circularity. Addressing the information gap can help lower the cost and uncertainty of addressing all other gaps facing the circular economy. Put simply, critical information needed to ensure ease of coordination, and connection among circular actors and waste streams need to be better collected, better organised and better governed. While collection and organisation are in drastic need of improvement, any improvement without an improvement to governance will fail to support future desirable circular innovation.

There is no consensus on a global, regional or national policy approach to closing information gaps facing circularity. There is likewise high experimentation and no consensus on incentives and infrastructural gaps, nor any common agreement on how to relate the information barriers within the circular economy to a business model. Nor is there common demand-side innovation, a single industrial-policy approach or agreed model of circularity or circular development.

In the 40 years since the introduction of the circular-economy framework, policy and industrial attention across both HICs and LMICs have been over-focused on the material recycling and recovery side, closing the very end loop of material flows. This closure reduces the information burden on the upstream actors in the supply chain, deferring to state investment in recycling capacity. In a functional circular economy, recycling and recovery are minimised at the last stage; efforts to improve recycling and recovery as primary strategies end up subsidising the linear and waste-based economy. In response, public- and private-sector attention, particularly within the European Union, has turned towards the stages before recycling, with high focus on reuse, repair, refurbishment and remanufacturing.

These barriers are not unknown to policy actors across HICs and LMICs. In response, a number of unique digital services and proposals have emerged in the past decade to address these information barriers. The Repair Efficiency Wales platform focuses directly on the matching question, where users can quickly discover repair shops in their local area. The ZeroWasteScotland initiative has been serving as a public–private financing and facilitation model to grow regional circular programmes. Platforms such as circularity.com take a broader approach, assessing a geo-referenced system for valuing production waste, transport of that waste, waste recovery and secondary raw-material usage. And further, as is exemplified by RepairCafe, the largest collection of DIY repair-service groups, critical information to assist with repair and refurbishment is under-organised and highly tied to people’s local knowhow.

Below is a larger section of these proposals and services.

As circular innovation policy and investment are increasingly moving towards digital tools and services, policymakers will need to pay attention to two key structural issues within digital services and digital markets: the appropriation of public-sector information for private purposes, and the anti-competitive evolution of the platform-driven market. The move from an analogue to a digital economy with the expansion of the internet has decreased the costs of information production and distribution, along with new incentives for market actors to organise this information. This market faces exceptional value-production opportunities with an exceptionally high incentive for monopolisation and oligopolistic market formation, as represented in the last years of antitrust concerns on major information actors, from Amazon and Google to Meta and Ticketmaster.

With these tech actors positioned to dominate the digitalisation of circularity, and the prior tech market already tending towards a global ‘winner takes all’, decisions on how to organise and manage circular information have long-term global implications. Across any given model, information will play a role; but it should be up to that society to decide what role information plays and how to govern it.

With better organised and accessible critical information on material flow and viable product-circularity strategies, public and private actors can reduce frictions among circular actors, and reduce duplicative development and information-search costs. The most transformative change for the circular economy will not be the use of any one technological moonshot but the systematic improvement of information management among existing processes, while aligning with effective data and digital-asset governance.

A GCEC is proposed to provide an online repository of critical public information, tools and services to reduce the cost of circular-solution implementation and management for public and private actors. This public-facing repository focuses on the integration of existing public-access information and location/access conditions for storing relevant information and knowledge in a single location. Who has what information, what information is needed for which task, and how can that information be used or accessed needs to be subject to constraints.

The primary focus is on the reduction of cost for public actors in the creation of public or public–private services, such as dedicated, city-level or national-level platforms, materials databases, matching systems, product-passport integration and dedicated information commons or fiduciaries. The intention is to facilitate a continuously expanding publicly searchable and organised library of information on materials, circular processes, circular management and repair, and to enable learning. What the Wikimedia Foundation did for peer-produced knowledge and Stackoverflow and Github did for community-driven code collaboration, a GCEC can do for circularity.

Existing information asymmetry needs standardisation and registration of the new generation of products. The legacy generation of products and materials, along with related knowledge on specifics of different repair environments means there is a need for additional information creation alongside any decentralised identifier and digital product passport. The GCEC is not intended to replace any such proposal, but rather to serve as an assistant to such services. The function of the GCEC is not to aggregate real-time local information, but instead to offer the less time-dependent high-value information – such as product repairability, manufacturability and conditions of a manufacturability – so that any given national or local actor can align this information with local availability. Understanding the circularity of a given product or the conditions of making a set of actors more circular should not be a national competitive advantage.

The commons can assist with organising this information and providing incentives or replicable models for aggregation and collection. But to address the global asymmetry in circular capacity, the commons will need to either provide and assess or work in parallel to an additional entity, aggregating and providing best-in-class open-source systems for circular process implementation through MOSCS. The aim of MOSCS is to reduce the cost of experimentation and development, while avoiding potential international dominance of local digital infrastructure needed to power and grow circularity.

Private and public actors across HICs may find such services equally relevant. At the simplest level of digital offerings in the United Kingdom, there remains regional disparity in the creation and management of repair, refurbishment and remanufacturing matching platforms where actors in need of these services can identify potential vendors.

LMICs are the primary focus, with a need to rapidly develop and align national circular and digital capabilities, whereas HICs tend to have existing digital and circular capabilities which remain misaligned, creating governance challenges. LMICs have an opportunity to have better-governed circularity by design in future industrial strategies. MOSCS can play a role in reducing the cost of exploration, experimentation and development of key public digital services for circularity, such as reproducible digital-product-passport frameworks.

The interaction between MOSCS and the GCEC should be mutually reinforcing to identify and assemble improved information on materials, existing product ranges and legacy product ranges, while making it available to local and international actors. A commons helps aggregate key information, but the value will come from how the specific knowledge and knowhow is distributed, as exemplified by the RepairCafe model.

Not all information can be made globally available under the same conditions. In the UK, a national material registry to help align investment with the specifics of material stockpiles may accelerate the circular economy, but this also creates risks from both the security and defence sides, as well as market manipulation and rent extraction. Moreover, a fundamental point is that not all circular problems are addressable through digital services.

While a GCEC is intended to be a global public service, the specific model of funding will create divergent development models. Likewise, alternative governance models for a GCEC will need to be considered. In particular, at the local level, particularly in urban areas across HICs and LMICs, public actors may benefit from taking on information fiduciary duties to manage both public and private access to relevant circular user information. For instance, Loop is both a durable packaging replacement and a precision consumption service, with the latter identifying granular consumption, health and nutritional information; as circular services begin to align with more precise user information requirements, greater attention to governance will be needed.

Two initial proposals for the funding and governance of the GCEC may be considered.

First is an independent, philanthropically funded non-profit endeavour. Subject to funder agreement and independence, the non-profit model offers a higher degree of geopolitical neutrality in circular service and information gathering.

The second model is an international cooperative project with weighted funding based on climate impact and industrial requirement. This second proposal may concern either a joint consortium and international-institutional model, or an independent consortium model. The multilateral forum provides greater incentive for bringing public-sector stakeholders together, improving potential for regulatory harmonisation alongside the GCEC. However, in the multilateral model, the MOSCS approach would be recommended to be an independent venture. The table below provides a highly preliminary overview of GCEC and MOSCS priorities and related considerations.

In order to pursue digitally aligned circular policy, whether independently or in consort with a GCEC/MOSCS approach, governments around the world need to invest in improved and long-term digital capabilities and aligned digital circular-policy frameworks. Governments, particularly in LMICs, need to evaluate the state of internal capabilities required to operate and manage circular digital services such as national material databases and local circular waste-matching platforms. In the absence of an internal understanding of the capabilities that are needed, governments are at risk of over-relying on external vendors and consultants for critical digital-infrastructure needs.

Nations need to create dedicated national material-flow programmes, which serve to align resources across competition, innovation and industry, and environment ministries. These offices for material flows are intended to identify the key barriers, transition requirements and policy options – from information asymmetries and information aggregation to rent-extractive concerns and market creation assessment – to shape the second and third generations of governmental circular-economy strategies. The alignment between these offices and resources for new-product registration, new-material proposals, and related health- and market-safety regulatory concerns has a high capacity for intergovernmental sharing and cooperation. However, prior to these offices being established, larger public–private consortia are needed to evaluate a particular country’s product and material mix.

The GCEC is intended to be an aid to public-sector digital circular services and private-sector activities, instead of a replacement for these services. In particular, while MOSCS are focused on reproducible services, the legal-institutional models for governing data should be considered in parallel to manage local and national high-value information.

In particular, LMICs will need to consider such models to avoid knowledge-appropriation from HICs. National and local information fiduciaries, which take on collective bargaining for user information to negotiate with private and public firms seeking to use that information for policy or commercial gain, provide a potential model for managing local, high-value, granular information creation. A cross-governmental study on governance challenges from aligning digital and circular policy models should be conducted, at both the global and regional levels, with funding from the OECD and regional development banks.

This investment must cover the ability to coordinate with domestic actors on retrieving and validating old and new product information and circular requirements. While repairability indexes have emerged, there is a need for a global convention on repair, refurbishment and remanufacturing to better codify and identify the precise trade-offs between material composition as intellectual property and universal repair, refurbishment and remanufacturing capacity.

A further forum for LMICs should be established to identify initial barriers and concerns around the alignment of digital and circular policy for structural industrial change. This forum should help to establish clear dialogue between HICs and LMICs on potential trade and specialisation concerns.

How public and private actors choose to frame and approach the circular information challenges will have high downstream implications for national and global circular development. If the current framework for global technology competition holds, either the world may face a new set of digital oligopolistic actors within the circular space, or the existing oligopolistic actors may own and operate key segments of the circular economy. The GCEC and MOSCS approach is intended to help address the critical information problems within circularity and the global inequality of information and digital service access, while simultaneously providing an alternative model to compete with the potential circular oligopoly.

The circular-economy argument of this paper was funded through the Progress Fellows programme at the Tony Blair Institute for Global Change. The digital-governance argument was based on prior research from a funded grant from the Rockefeller Foundation at UCL.

Lead Image: TBI