From indicators to interventions: Economic assessment of circular strategies for informed policy design

While the circular economy (CE) is a central sustainability objective, its implementation in industrial value chains remains challenging. This calls for targeted policy interventions under fiscal and regulatory constraints. Although environmental - and to some extent social - indicators are widely used to assess circular strategies (CSs), economic assessments that capture policy and price (P&P) scenarios and inter-organizational cost dynamics remain underdeveloped. This paper introduces the Comparative Economic Assessment of Circular Economy (CEACE), a process designed to evaluate the cost-effectiveness of CSs across entire national value chains and derive policy recommendations. By quantifying and disaggregating circular life-cycle costs across actors and over time and by introducing the Circular Cost Effectiveness Index (CCEi), CEACE reveals economic “winners” and “losers” and identifies strategic leverage points for cost-effective and minimally intrusive policy interventions. Applied to the Swiss expanded polystyrene (EPS) insulation sector, the framework demonstrates how Swiss P&P scenarios are insufficient to increase the financial attractiveness of environmentally desirable CSs. This study establishes CEACE as a systematic process. It identifies cost-effective and environmentally desirable CSs. Thereby it contributes to evidence-based policy design to accelerate the transition to a sustainable CE.