This paper, ‘An empirical exploration of the unintended effects of circular economy policies in the European Union: the case of textiles’ by Solis, Milios, Tonini, Hansen, Scheutz, and Huygens (2025), investigates the overlooked or secondary impacts of EU circular economy (CE) policies, with a specific focus on the textile sector. Drawing on expert interviews, stakeholder surveys, and thematic analysis, the study categorises first-order (direct) and second-order (indirect or unintended) effects to evaluate how current policy assessment tools capture or fail to capture the real-world consequences of CE initiatives. 

The research responds to a critical policy gap: while circular economy measures aim to improve resource efficiency and sustainability, they can unintentionally trigger complex socio-economic and environmental dynamics that reshape markets, behaviours, and governance frameworks. 


Key findings

1. Parity of first- and second-order effects

• The study reveals an almost even split between direct (52%) and unintended (48%) policy effects.
• Many second-order impacts arise from feedback loops such as changes in consumption habits, regulatory loopholes, and trade shifts that alter the intended outcomes of CE interventions.

2. Drivers and categories of unintended effects

• Key drivers include changes in legal and trade frameworks, price fluctuations, behavioural adaptations, and institutional responses.
• Some effects are beneficial (e.g., innovation spillovers), while others risk undermining policy goals by creating new inefficiencies or inequities. 

3. Gaps in policy assessment tools

• Common evaluation methods like life-cycle assessment and cost benefit analysis often miss broader macroeconomic and behavioural impacts.
• Although experts recognise the importance of these unintended effects, most available tools remain limited in scope and data integration.

4. Recommendations for future policy design

• Engage stakeholders early in the policymaking process to identify and map potential side-effects.
• Combine quantitative models with qualitative foresight to better capture systemic and cross-sectoral interactions.
• Integrate social, behavioural, and international dimensions into CE impact assessments.
• Recognise that unintended effects are not inherently negative some may create adaptive advantages or new policy learning opportunities.

The paper demonstrates that circular economy policies, while essential for sustainability transitions, can generate unintended consequences that require early identification and adaptive governance. Acknowledging and analysing these effects can lead to more resilient, evidence-based, and socially balanced policy frameworks. 

For a deeper understanding of the study’s methodology and policy insights, readers are encouraged to access the full paper here.