The Economics of the Circular Economy Transition

As the global economy expands and living standards rise, the world's raw materials consumption is expected to nearly double by 2060. This is particularly alarming because materials extraction, processing, use and waste management lead to very significant environmental pressures, ranging from local pollution at mining sites to GHG emissions from metal processing or air pollution from waste handling and disposal. In parallel, the mismanagement of plastic has resulted in significant environmental pollution and, if left unchecked, has the potential to cause even more important economic and social impacts since annual global plastics production is projected to triple by 2060. A circular economy aims to transform the current linear economy into a circular model to reduce the consumption of finite material resources by recovering materials from waste streams for recycling or reuse, using products longer, and exploiting the potential of the sharing and services economy. Circular economy policies and initiatives largely take place domestically at the national or regional level. They also have essential interlinkages with international trade.