The Circular Economy and its Impact on Developing and Emerging Countries
An explorative study
Langsdorf, Susanne; Duin, Laurens (2022). The circular economy and its impact on developing and emerging countries. An explorative study. Ecologic Institute, Berlin.
The circular economy is a key solution to reduce resource use and tackle a range of environmental impacts that arise from resource use. In recent years, many strong economies have developed strategies to foster the circular economy. But what do we know about how these plans impact developing and emerging countries? Do the strategies itself take the effects on developing and emerging countries into account? Which risks and opportunities arise from a shift to a circular economy in industrialised countries to developing and emerging countries?
This study puts a spotlight on some of these effects. It presents selected (inter)national and regional initiatives for the circular economy, including the European Circular Economy Action Plan and the circular economy in China's 14th Five-Year Plan and shows if and how these strategies take developing and emerging countries into account. Furthermore, the study explores some of the key effects that come with increased circularity. Key topics discussed are the effect on trade in primary raw materials, the shift to bio-based products, a possible reduction in waste exports and knowledge transfer. The report also provides a brief analysis of selected specific measures from the EU's Circular Economy Action Plan of 2020, with a special focus on their potential impact on developing and emerging countries.
Based on their analysis, the authors distil four key recommendations and highlights:
- Reduction in waste flows: Circular economy policies can help reduce waste flows to developing and emerging economies. In the case of valuable waste, such as metal scrap, this reduces income and raw material supply for developing and emerging countries. A reduction of less valuable, low quality waste streams helps to reduce negative environmental and social effects.
- Keeping resources affordable: Increasing circularity can help cushion the projected increases in demand and related price increases for raw materials. This keeps raw materials more affordable for developing and emerging countries. Substitution of raw materials may impact countries that rely strongly on the export of the substituted raw material.
- Right to repair: The 'right to repair' that is part of the revision of the EU's Ecodesign Directive can help to shift treatment from hazardous recycling to repair in e-waste importing countries.
- Increased demand for biomass: The shift to biobased materials will increase demand for biomass from industrialised countries. This provides a trading opportunity in developing and emerging countries, but also the risks of land use changes and biodiversity loss.