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Introducing the Circular Economy to Economists

Author

Listed:
  • Don Fullerton

    (Department of Finance, University of Illinois at Urbana-Champaign, Champaign, Illinois, USA)

  • Callie W. Babbitt

    (Department of Sustainability, Golisano Institute for Sustainability, Rochester Institute of Technology, Rochester, New York, USA)

  • Melissa M. Bilec

    (Mascaro Center for Sustainable Innovation, University of Pittsburgh, Pittsburgh, Pennsylvania, USA)

  • Shan He

    (Department of Economics, University of Illinois at Urbana-Champaign, Urbana, Illinois, USA)

  • Cindy Isenhour

    (Department of Anthropology and Climate Change Institute, University of Maine, Orono, Maine, USA)

  • Vikas Khanna

    (Department of Civil and Environmental Engineering, University of Pittsburgh, Pittsburgh, Pennsylvania, USA)

  • Eunsang Lee

    (Institute for Environmental Science and Policy, University of Illinois at Chicago, Chicago, Illinois, USA)

  • Thomas L. Theis

    (Institute for Environmental Science and Policy, University of Illinois at Chicago, Chicago, Illinois, USA)

Abstract

A circular economy (CE) would reduce both extraction and disposal by encouraging green design and circular business models, as well as repair, reuse, remanufacturing, and recycling. The CE started among architects and engineers, with little interest among economists. This article introduces CE concepts to economists, introduces key insights about the CE from other disciplines, and describes how economists can use these insights for a more complete economic analysis of policies that can better improve human welfare. An economic model of CE behavior can benefit from understanding the environmental gains from green designs based on engineering,transaction-cost savings from information based on blockchain technology, life cycle assessments based on industrial ecology, and behavioral science concepts of cultural barriers and social decision making that affect how producers and consumers respond to incentives. With various disciplines brought to bear on the subject, the combined analysis can exceed the sum of its parts.

Suggested Citation

  • Don Fullerton & Callie W. Babbitt & Melissa M. Bilec & Shan He & Cindy Isenhour & Vikas Khanna & Eunsang Lee & Thomas L. Theis, 2022. "Introducing the Circular Economy to Economists," Annual Review of Resource Economics, Annual Reviews, vol. 14(1), pages 493-514, October.
    • Handle: RePEc:anr:reseco:v:14:y:2022:p:493-514
    DOI: 10.1146/annurev-resource-101321-053659
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    Citations

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    Cited by:

    1. Egger, Peter H. & Keuschnigg, Christian, 2024. "Resource dependence, recycling, and trade," Journal of Environmental Economics and Management, Elsevier, vol. 128(C).
    2. Don Fullerton, 2024. "The Circular Economy," CESifo Working Paper Series 11109, CESifo.
    3. Ahmed Chennak & Konstantinos Giannakas & Tala Awada, 2024. "On the Economics of the Transition to a Circular Economy," Circular Economy and Sustainability, Springer, vol. 4(4), pages 3007-3023, December.

    More about this item

    Keywords

    blockchain; disposal; extraction; green design; life cycle assessment; recycling;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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