Work

Mapping public investment in circular economy: A taxonomy-based analysis of Korea's public budgets

Year: 2025

Type: article

Abstract: This study presents one of the first national-scale, quantitative assessments of public spending on circular economy, analyzing 5592 government-funded projects in Korea using a harmonized taxonomy. Despite growing recognition of circular economy, absence of standardized classification systems to define circular economy activities hinders both policy evaluation and effective resource allocation. To address this gap, the study developed a comprehensive taxonomy by integrating eight leading frameworks, including the Ellen MacArthur Foundation's ReSOLVE, EU taxonomy, ISO 59004, and IFC guideline, and refined it through iterative application to Korea's 2023 budget data. This classification system was designed for large-scale investment datasets where project descriptions are often limited. The taxonomy categorized circular economy activities into eight types across four lifecycle stages. Application to Korea's national ministry budgets, Greenhouse Gas Reduction Cognitive Budget, and Climate Response Fund revealed that circular economy spending represented only 0.3 % of total government expenditures, but 3.4 % and 12.3 % of the two climate-related funds, respectively. Activity distribution exhibited pronounced downstream bias, with 49 % of ministerial circular spending concentrated in end-of-life material recovery and collection, while upstream prevention strategies received minimal support (circular design 0.4 %, intensification of use 1 %). This allocation pattern contradicts both the hierarchical logic of circular economy frameworks prioritizing prevention and Korea's policy vision emphasizing lifecycle circularity. The findings highlight needs for standardized definitions, enhanced institutional awareness, and lifecycle-based impact metrics. The proposed taxonomy provides a replicable tool for tracking circular economy finance, supporting green budgeting and strategic planning in Korea and beyond.

Source: Journal of Cleaner Production

DOI: 10.1016/j.jclepro.2025.147054

Authors: Yiseul Hong, Jooyoung Park

Institutions: Seoul National University, Institute of Construction and Environmental Engineering

Language: English

Topic: Sustainable Supply Chain Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Responsible consumption and production

Open Access status: hybrid

Estimated APC paid: $4,660