An empirical exploration of the unintended effects of circular economy policies in the European Union: The case of textiles

Abstract

With the need for further research on methods to estimate unintended effects, specifically in the context of circular economy, and the European Union's textile policy in the making, it is necessary to understand and account for any potential unintended effects ex-ante. This study explores the unintended effects of past and hypothetical future textile policies in order to categorise them empirically and to evaluate scientific tools for improving ex-ante impact assessments. The study combines interviews with policy development experts, a stakeholder survey and a thematic analysis of the findings, which confirm that an evident gap exists between the acknowledged importance of unintended effects and the tools used to address them. Second-order effects, defined as indirect and unintended effects prompted by changes in a socio-technical system (e.g., policy implementation and its direct effects) prove to be as equally relevant as first-order effects or direct effects. The categorisation of these effects showed that most of them were related to alterations to legal requirements influencing import-export and value chain dynamics, the exploitation of loopholes in legislation and fraud, as well as price alterations affecting household consumption patterns and business strategies. The experts' suggestions for addressing better the unintended effects of policies in ex-ante impact assessments confirm the importance of reinforcing or expanding the use of scientific tools during policy processes, i.e. stakeholder engagement, combined micro- and macro-economic modelling, extended consideration of the European Union's resilience and the inclusion of a behavioural and social component. It was highlighted that unintended effects are not always negative, and even when so, they do not necessarily have to discredit a policy altogether. This study contributes to informed decision-making on future circular economy policy in the European Union.