Circular economy and ecological footprint: A disaggregated analysis for the EU

Abstract

In this era of global ecological overshoot, understanding the interplay between the circular economy and ecological footprint is vital. This study examines data from the EU-23 from 2010 to 2020 using panel regression methods. It explores the long-term relationships between ecological footprint types and circular economy indicators, such as per capita municipal waste generation, the municipal waste recycling rate, investment, circularity rate, and trade in recyclable materials. This study revealed four key findings. 1) All ecological footprints showed negative or minimal growth, except for forest footprints. Positive yet weak elasticities were found in forest ecological footprint factors, such as municipal waste generation, investment, and recycling rate. 2) The municipal waste recycling rate displayed negligible negative elasticities in total and carbon footprints. 3) Investment elasticities all footprint categories except carbon footprint were generally positive, but slight, indicating an ecological footprint. 4) The circularity rate showed negative elasticities in total and carbon footprints, particularly for the latter. These insights suggest that targeted investments in waste management and zero-waste technologies can reduce the ecological footprint. The EU should also diversify investments beyond energy efficiency, including protecting, restoring, and enhancing forests as well as eco-friendly food systems. Encouraging secondary raw material markets can significantly reduce ecological footprints. The policy implications emphasize investing in zero-waste technologies and diversifying investments for ecological balance.

Keywords

• Ecological footprint
• Circular economy
• Panel regression model
• Elasticity
• European union