Circular Economy Innovation and Environmental Sustainability Impact on Economic Growth: An Integrated Model for Sustainable Development

Abstract

This study examines the link between selected indicators of a circular economy, including essential components of environmental and economic growth. Developed economies are continuously innovating to promote growth and giving governmental support to the producers to move from linear economies to circular ones. Hence, waste materials in industrial systems are recycled or re-used, improving the efficiency of using finite resources with the no-waste approach. The aim of this paper is the following: (1) to identify the main components of a circular economy, which are also supportive of sustainability and development; (2) to check the impact of these variables in the economic growth of European Union countries; (3) to find out if the three components of sustainable development adopted to circular economy (CE) indicators (environmental–social–economic) are significant to economic growth. We used a fixed effect panel data analysis to identify the circular economy’s impact on the economic growth of European countries. Additionally, to support the results of the regression analysis, we employed a second method—generalized methods of moments—computing the Arellano–Bond dynamic panel data estimation method. The model included five independent variables, such as environmental tax rate, a recycling rate of waste, private investment and jobs in a circular economy, patents related to recycling, and trade of recyclable raw materials. The identification of each variable was made based on a deep search through literature. The results of both econometric models showed a strong and positive correlation between a circular economy to economic growth, highlighting the crucial role of sustainability, innovation, and investment in no-waste initiatives to promote wealth.

Environmental effects of COVID-19 pandemic and potential strategies of sustainability

“…For sustainable industrialization, it is essential to shift to less energy-intensive industries, use of cleaner fuels and technologies, and strong energy efficient policies ( Pan, 2016 ). Moreover, industries should be built in some specific zones, keeping in mind that waste from one industry can be used as raw materials of the other ( Hysa et al., 2020 ). After a certain period, industrial zones should have been shut down in a circular way to reduce emission without hampering the national economy.…”

“… Waste recycling and reuse: To reduce the burden of wastes and environmental pollution, both industrial and municipal wastes should be recycled and reused. Hence, circular economy or circularity systems should implement in the production process to minimize the use of raw material and waste generation ( Hysa et al., 2020 ). Moreover, hazardous and infectious medical waste should be properly managed by following the guidelines ( WHO, 2020c ).…”

The Impact of 4IR Digital Technologies and Circular Thinking on the United Nations Sustainable Development Goals

“…There are tools that can be used for the transition from a linear to a circular economy [10][11][12][13]. These tools are shown and explained in Table 2 below: Adapted from the Ellen MacArthur foundation butterfly diagram, which captures the essence of a circular economy using 4IR digital technologies; it attempts to capture the flow of materials, components, and products, while adding an element of financial value and sustainability.…”

“…There are tools that can be used for the transition from a linear to a circular economy [10][11][12][13]. These tools are shown and explained in Table 2 below: Table 2.…”

The Markets of Green Cars of Three Countries: Analysis Using Lotka–Volterra and Bertalanffy–Pütter Models

“…Still, another pressure for the transformation of automotive industry comes from demands for a circular economy. For example, in 2015, the European Commission set up the action plan "Closing the Loop" [78]. Remanufacturing conventional cars from end-of-life parts saves energy, materials, and costs [79].…”