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Circular economy for climate neutrality: Setting the priorities for the EU

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  • Rizos, Vasileios
  • Egenhofer, Christian
  • Elkerbout, Milan

Abstract

The previous Commission policy on resources management was part of the priority for jobs and growth and economic competitiveness. The circular economy will be no less important for the new political priority of climate neutrality; it will become one of the indispensable elements for meeting the EU’s ambitions. EU climate policy and the circular economy are by and large complementary and mutually reinforcing. The circular economy is more than just another ‘product standards’ policy. In order for this to happen, • there is a need for a framework that is able to systematically address trade-offs, such as between the circular and the bioeconomy, but also between material efficiency and energy use, as well as • a mechanism to steer and monitor progress, touching upon the question of whether and if so, how to increase ambition and develop tools to monitor progress, for example via targets, and • the new Commission will need to develop and then scale up successful products and processes to create opportunities for new value chains while addressing risks, such as dependency on raw materials. Circular economy products for the foreseeable future will require both technology push and market pull policies. Both the circular economy and low-carbon economy will require new and often yet unknown business models. This will also require new methods of regulation. The principal challenge will be to create ‘lead markets’ for the circular economy in combination with low-carbon products. Many ideas for this exist. They include, for example, ‘carbon contracts for difference’, carbon budgets for projects, consumption charges, taxes and tax exemptions, sustainable finance, product standards and public procurement. Ideas now need to be tested to see whether they could work in practice. Finally, the EU circular economy will need to be underpinned by a robust and transparent carbon accounting system. If effective, such as system can at the same time act as a catalyst for investment in the circular economy and low-carbon products and processes.

Suggested Citation

  • Rizos, Vasileios & Egenhofer, Christian & Elkerbout, Milan, 2019. "Circular economy for climate neutrality: Setting the priorities for the EU," CEPS Papers 25584, Centre for European Policy Studies.
    • Handle: RePEc:eps:cepswp:25584
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    References listed on IDEAS

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    1. Faure-Schuyer, Aurélie & Egenhofer, Christian & Elkerbout, Milan, 2018. "Value Chains based on Mineral Raw Materials: Challenges for European Policy and Industry," CEPS Papers 13468, Centre for European Policy Studies.
    2. Behrens, Arno & Rizos, Vasileios, 2017. "The Interplay between the Circular Economy and the European Semester: An assessment," CEPS Papers 13331, Centre for European Policy Studies.
    3. Korhonen, Jouni & Honkasalo, Antero & Seppälä, Jyri, 2018. "Circular Economy: The Concept and its Limitations," Ecological Economics, Elsevier, vol. 143(C), pages 37-46.
    4. Willi Haas & Fridolin Krausmann & Dominik Wiedenhofer & Markus Heinz, 2015. "How Circular is the Global Economy?: An Assessment of Material Flows, Waste Production, and Recycling in the European Union and the World in 2005," Journal of Industrial Ecology, Yale University, vol. 19(5), pages 765-777, October.
    5. Elkerbout, Milan & Egenhofer, Christian, 2017. "The EU ETS price may continue to be low for the foreseeable future – Should we care?," CEPS Papers 12666, Centre for European Policy Studies.
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    2. Durán-Romero, Gemma & López, Ana M. & Beliaeva, Tatiana & Ferasso, Marcos & Garonne, Christophe & Jones, Paul, 2020. "Bridging the gap between circular economy and climate change mitigation policies through eco-innovations and Quintuple Helix Model," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    3. Franklin Enrique Reyes-Soriano & Juan Carlos Muyulema-Allaica & Christina Michelle Menéndez-Zaruma & Jorge Manuel Lucin-Borbor & Isabel Del Roció Balón-Ramos & Gerardo Antonio Herrera-Brunett, 2022. "Bibliometric Analysis on Sustainable Supply Chains," Sustainability, MDPI, vol. 14(20), pages 1-13, October.
    4. Manav Khanna & Natalia Marzia Gusmerotti & Marco Frey, 2022. "The Relevance of the Circular Economy for Climate Change: An Exploration through the Theory of Change Approach," Sustainability, MDPI, vol. 14(7), pages 1-18, March.
    5. Andrea Ciambra & Iraklis Stamos & Alice Siragusa, 2023. "Localizing and Monitoring Climate Neutrality through the Sustainable Development Goals (SDGs) Framework: The Case of Madrid," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    6. Zhengai Dong & Lichen Zhang & Houjian Li & Yanhui Gong & Yue Jiang & Qiumei Peng, 2022. "Knowledge Mapping and Institutional Prospects on Circular Carbon Economy Based on Scientometric Analysis," IJERPH, MDPI, vol. 19(19), pages 1-25, September.

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