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The Brussels and California Effects? Circular Economy Policy Influence Across Borders
Nancy Bocken1,2,3, Matthew Coffay3,4, Carl Dalhammar2
1Maastricht Sustainability Institute, School of Business and Economics, Maastricht University, Tapijn 11 Building D, P.O. Box 616, Maastricht, 6200 MD The Netherlands.
Circular Economy and Sustainability
|June 26, 2025
Summary
US companies are influenced by international circular economy policies, like the Brussels effect, and U.S. policies, such as the California effect. Overcoming barriers requires legal support and lobbying for supportive regulations.
Area of Science:
- Environmental Policy
- Circular Economy
- International Business
Background:
- Environmental policies can transcend borders, influencing other regions.
- The "California effect" and "Brussels effect" exemplify policy diffusion.
Purpose of the Study:
- To determine the extent to which U.S. companies are influenced by external circular economy policies.
- To understand how U.S. companies engage with and influence these policies.
Main Methods:
- Qualitative study involving interviews with companies operating in the United States.
- Analysis of how external and internal policies impact circular economy adoption.
Main Results:
- U.S. firms are influenced by and actively shape both international (Brussels effect) and domestic (California effect) circular economy policies.
- Barriers include a fragmented U.S. policy framework, competitor opposition, and legal/business model challenges.
- EV battery recycling stands out as a sector with supportive U.S. policy.
- Consumer characteristics necessitate tailored circular business models.
Conclusions:
- Companies actively navigate and influence circular economy policies across different jurisdictions.
- Strategic approaches like legal support, lobbying, and collaboration are crucial for overcoming barriers.
- Policy clarity, as seen in EV battery recycling, significantly aids circular innovation.
- Future research should explore policy's role in driving international circular economy adoption.
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