Circular economy international trade is a BIG business opportunity
Building a circular economy is critical as materials and energy are wasted only to damage the environment we rely on for our health and well-being, while the same inputs are also growing scarce and more expensive. Although the circular economy provides innumerable business opportunities and can grow the world’s economy, clear understandings of the opportunities and incentives are needed to motivate change. Therefore, this study demonstrates the direct linkage between circularity and international market opportunities to motivate firms to change and invest in the innovations and business of the circular economy.
Selling into international trade markets is an attractive incentive for firms to engage. Using several years of data, this study examined whether higher European Union countries’ circular material use rates were related to more international exports of the main types of waste trade: metals, plastics, and chemicals. Results showed that across material types, higher national circularity drives international trade in waste and scrap.
Given this circularity-trade relationship holds, countries and companies need to know how to increase their circularity so that they can take advantage of the increased trade opportunities. This study found that circular economy policy, circular economy research and innovation, and their combination positively influence countries’ circular capabilities.
Overall, the findings show that circularity provides economic benefits through increased international trade and that a combination of levers support and increase circular capabilities. At the same time, in building a global circular economy that inherently provides economic and environmental benefits, we must also consciously and consistently make the effort to achieve these benefits sustainably, considering the human condition at every step, and by ensuring a fair distribution of benefits.
Finally, this study was only possible because European Union countries coordinate on policy and research, thus offering publicly available data that measures country-level circularity over several years. To oversee the progress of global circularity, and many other internationally critical phenomena, all governments and other concerned stakeholders need to partner to collectively invest in coordination on policy, research and innovation to develop and evolve better and more sustainable industrial policy in the public interest.
Deborah de Lange (2024). Circular economy international trade: An investigation of the relationship between european union circularity and international trade (external link) . Journal of Cleaner Production, 484, 144350.
