Abstract for:Circular-economy dynamics in the Danish construction industry

We present a stylized model of the development of markets for secondary products and materials, inspired by a study of the Danish construction industry.  The main purpose of the model is to explore how the substantial delays implied by the stock-flow structure of building construction and eventual demolition as well as the inertia implied by a host of positive feedback loops relating to scale and scope economies, market learning and word-of-mouth effects, can pose a barrier to the effective development of such markets.  Four policy initiatives proposed by industry participants are explored:  1) Certification and warranty schemes, 2) digital trading and matching platforms, .3) value demonstration projects, and 4) green public procurement.  Preliminary results suggest that while all four initiatives have potential for accelerating the market development, they operate at different points in the system and are therefore likely to have different effects depending upon what waste fragment is under consideration.  Moreover, it is clear from the results that the transition will take time, on the order of 15-20 years.  This has important implications for the risks and capital requirements for any startup venture wishing to enter this business area and suggests an important role for government in facilitating patient