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From incineration to recycling – An economic and environmental assessment of circular economy of plastics in Finland

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  • Savolainen, Hannu
  • Honkatukia, Juha

Abstract

In circular economy, the value of products, materials and resources is maintained as long as possible. This is done by minimizing the waste generation by using production side flows as resources and reusing and recycling products. The recycling and other waste management actions are in the heart of CE. In this paper we perform a scenario assessment of increased plastic waste recycling in Finland by using environmentally-extended CGE model. Impacts on aggregate economic outcome, growth contributions and value chains are in the focus. We also shed light on the need for policy instruments to enable such a change in plastic waste treatment from incineration to recycling and secondary material manufacturing. Economic indicators are combined with environmental indicators including material use and greenhouse gas emissions. In all three scenarios the costs of increased recycling exceeded the increased production in waste management sector. Overall effect on GDP was negative in every scenario, but least in the case where domestic plastics were subsidized over imported plastics. In this scenario material flow impacts were also favorable, since imported materials were substituted with recycled materials. We could not find a win-win situation where both economic impacts and environmental consequences were simultaneously positive.

Suggested Citation

  • Savolainen, Hannu & Honkatukia, Juha, 2021. "From incineration to recycling – An economic and environmental assessment of circular economy of plastics in Finland," Conference papers 333272, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333272
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    File URL: https://ageconsearch.umn.edu/record/333272/files/10510.pdf
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    References listed on IDEAS

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    1. Andrew McCarthy & Rob Dellink & Ruben Bibas, 2018. "The Macroeconomics of the Circular Economy Transition: A Critical Review of Modelling Approaches," OECD Environment Working Papers 130, OECD Publishing.
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