This is the final version of the article. It first appeared from Elsevier via https://doi.org/10.1016/j.gloenvcha.2016.02.003This article proposes a fundamental methodological shift in the modelling of policy interventions for sustainability transitions in order to account for complexity (e.g. self-reinforcing mechanisms, such as technology lock-ins, arising from multi-agent interactions) and agent heterogeneity (e.g. differences in consumer and investment behaviour arising from income stratification). We first characterise the uncertainty faced by climate policy-makers and its implications for investment decision-makers. We then identify five shortcomings in the equilibrium and optimisation-based approaches most frequently used to inform sustainability policy: (i) their normative, optimisation-based nature, (ii) their unrealistic reliance on the full-rationality of agents, (iii) their inability to account for mutual influences among agents (multi-agent interactions) and capture related self-reinforcing (positive feedback) processes, (iv) their inability to represent multiple solutions and path-dependency, and (v) their inability to properly account for agent heterogeneity. The aim of this article is to introduce an alternative modelling approach based on complexity dynamics and agent heterogeneity, and explore its use in four key areas of sustainability policy, namely (1) technology adoption and diffusion, (2) macroeconomic impacts of low-carbon policies, (3) interactions between the socio-economic system and the natural environment, and (4) the anticipation of policy outcomes. The practical relevance of the proposed methodology is subsequently discussed by reference to four specific applications relating to each of the above areas: the diffusion of transport technology, the impact of low-carbon investment on income and employment, the management of cascading uncertainties, and the cross-sectoral impact of biofuels policies. In conclusion, the article calls for a fundamental methodological shift aligning the modelling of the socio-economic system with that of the climatic system, for a combined and realistic understanding of the impact of sustainability policies.J.-F. M. acknowledge the UK Engineering and Physical Sciences Research Council (EPSRC), fellowship no EP/ K007254/1 and J.-F.M. and J. V. acknowledge a networking grant of the EPSRC (Newton Fund) EP/N002504/1

This paper deals with the territorial dimension of a circular economy. We review the territorial factors shaping closed-loop systems, upon which a territorial definition of a circular economy is developed. We consider six categories of territorial factors: (1) Land-based factors emphasize the significance of physical endowment to satisfy the growing demand of secondary and biotic materials in a circular economy; (2) agglomeration factors are important determinants for a circular economy, as these provide circular businesses with the necessary access to resources, knowledge and collaboration, as well as viable markets; some of these functions are enabled by (3) hard territorial factors, in particular by accessibility and connectivity infrastructures as well as by (4) access to state-of-the-art technologies; softer territorial factors, including (5) knowledge-related factors and (6) governance and institutional arrangements, support collaboration among companies and between them, as well as among consumers and public institutions. Our review shows that agglomeration and land-based factors contribute to define the framework conditions of circular transformations, the harder territorial factors (accessibility and technologies) enable the circular economy in practice, and the softer factors (knowledge, awareness, governance and milieus) contribute to catalyse circular transformations. These findings base and complement research done in the ESPON CIRCTER project.

An increasing global population and growing wealth are raising demand for energy and food, impacting on the environment and people living in river basins. Sectoral decision-making may not optimize socio-economic benefits because of perverse impacts in other sectors for people and ecosystems. The hydropower–food supply nexus in the Mekong River basins is assessed here in an influence model. This shows how altering one variable has consequent effects throughout the basin system. Options for strategic interventions to maximize benefits while minimizing negative impacts are identified that would enable national and sub-national policy makers to take more informed decisions across the hydropower, water and food supply sectors. This approach should be further tested to see if it may aid policy making in other large river systems around the world.