EU’s circular economy can help the union thrive.
Europe’s economy has generated unprecedented wealth over the past century. Part of the success is attributable to continuous improvements in resource productivity—a trend that has started to reduce Europe’s resource exposure. At the same time, resource productivity remains hugely underexploited as a source of wealth, competitiveness, and renewal. Our new study, Growth within: A circular economy vision for a competitive Europe,1 provides new evidence that a circular economy, enabled by the technology revolution, would allow Europe to grow resource productivity by up to 3 percent annually. This would generate a primary-resource benefit of as much as €0.6 trillion per year by 2030 to Europe’s economies. In addition, it would generate €1.2 trillion in nonresource and externality benefits, bringing the annual total benefits to around €1.8 trillion compared with today.
This would translate into a GDP increase of as much as seven percentage points relative to the current development scenario, with an additional positive impact on employment. Looking at the systems for three human needs (mobility, food, and the built environment), our study concludes that rapid technology adoption is necessary but not sufficient to capture the circular opportunity. Instead, circular principles must guide the transition differently from those that govern today’s economy. Pursued consistently, the economic promise is significant and the circular economy could qualify as the next major European political-economy project.
Europe’s economy remains very resource dependent. Views differ on how to address this against an economic backdrop of low and jobless growth as well as the struggle to reinvigorate competitiveness and absorb massive technological change.
Proponents of a circular economy argue that it offers Europe a major opportunity to increase resource productivity, decrease resource dependence and waste, and increase employment and growth. They maintain that a circular system would improve competitiveness and unleash innovation, and they see abundant circular opportunities that are inherently profitable but remain uncaptured. Towards a Circular Economy
