Improving the understanding of circular economy potential at territorial level using systems thinking

Abstract The definition of Circular Economy (CE) has evolved over time. It includes intervention options for reducing consumption, improving the efficiency of production, introducing recycling and reuse for materials management, including new business models geared at waste prevention. With the use of Systems Thinking and the creation of Causal Loop Diagrams (CLDs) we explore how CE strategies are related to territorial dynamics and how the outcomes of such strategies can support sustainable development. We first reviewed the literature, to identify the main drivers of change (i.e. feedback loops) triggered by CE interventions. We then applied the same systemic approach to six case studies across Europe in synergy with ESPON CIRCTER project. This allowed us to review, validate and improve the general systemic approach and further explore the role that specific territorial characteristics can play in the identification, selection and effective implementation of CE interventions. We find that some of the feedback loops emerged from the case studies are not found in the literature. On the one hand, new balancing loops have emerged, representing localized challenges to the implementation of CE strategies. On the other hand, new dynamics related to behavioural change have also emerged, which lead to self-reinforcing mechanisms in the case studies analysed, creating a stronger will for the implementation of CE interventions. The main result of our research is comprehensive CLD that can be used to assess and compare different CE strategies, fully considering the complexity of the CE and its various outcomes across social, economic and environmental indicators.