IN LAGOS: A new policy assessment to support the transition to a circular economy has shown that a combination of approaches targeting consumption and production can reduce material extraction in Europe.
The European Commission says this approach can help limit the volume of primary materials consumed by society — a particularly pressing concern when global consumption of goods is forecast to double by 2050.
The first set of (demand side) scenarios focused on policies that tax primary production of goods and subsidise the use of recycled materials, such as extraction levies for non-metallic minerals.
Meanwhile, the second set of (supply side) scenarios focused on circular economy policies that impact upstream design and consumption of products, such as extending product lifetime and reducing consumer demand.
Consumption shift
The European Commission reports that the consumption shift scenario leads to a 2.3% reduction in extraction of materials in Europe and a 2.6% decline in material consumption.
Policies to mitigate climate change were shown to have a larger impact on extraction of domestic fossil fuels, but a smaller impact on material consumption.
The study showed that a tax on the extraction of non-metallic minerals reduced their extraction by 4% but at the same time material consumption declined by only 1.1%, indicating that countries are sourcing materials from outside their borders. In this context, border tax adjustments within fiscal-type policies could reduce material leakage.
Results suggest that a package of circular economy policies can deliver a 15% reduction in Europe-wide extraction of materials relative to business-as-usual in 2030 compared to 2021. Reductions vary from above 14% in Romania to 9% in Croatia, Bulgaria, and other Eastern European countries.
On the economic and social impacts side, the study showed that at a Europe-wide level, the overall cost of implementing the combined circular economy scenario is around 1% of gross domestic production in 2030. For most individual policy scenarios, the cost does not exceed 0.3–0.4%.
As part of this new study, insights will be provided for policymakers by evaluating circular economy policies by the impact on material use, as well as their economic and social impacts. This includes the possible trade-offs from transitioning away from traditional production to circular approaches.
Write to Aaliyah Rogan at Mining.com.au
Images: European Commission