This pandemic crisis is mainly due to the relationship between man and nature.
If humans do not completely review their way of life, especially their relationship to the animal species, this pandemic crisis will be one of many.
The economic effects of Coronavirus are disastrous. States with a social protection system manage this crisis better than states with a purely liberal economy.
The role of the European Union already challenged, has been undermined by this crisis.
So an ambitious plan, with an economy focused on the circular economy and the green economy can help the countries of the European Union to revive the economy.
Faced with the withdrawal of the United States from the international scene, the European Union could be a model in its way of reviving its economy, in a sustainable manner.
A new deal is necessary after the economic crisis caused by the Covid-19.
So what are the implications Of The EU Circular Economy On The Global Economy?
Implications Of The EU Circular Economy On The Global Economy
The circular economy action plan includes initiatives across the entire lifecycle of products, from initial product design through to the processing of recyclable materials. It is an ambitious and transformative project that will involve many economic and social changes.
The key goals of the EU Circular Economy Action plan include:
But how will these changes affect the rest of the world? Here are a few of the key implications of the EU circular economy on the global economy.
Reduced demand for virgin natural resources
The EU’s circular economy has several initiatives designed to improve resource conservation. They include the improved use of second-hand goods, product recycling, material repurposing, and energy extraction from waste.
These measures will increase the circular use of raw materials and the proportion of secondary sources in raw material supply. This will have the effect of reducing the EU’s need for virgin natural resources.
As a result, there will be less demand for energy products (oil, gas, petroleum), wood pulp, plastics, metals, and some other materials within the EU. However, it’s worth noting that this will be partially offset by increasing demand for raw materials from developing countries in the global economy.
Some resource-rich developing countries may experience a decline in exports because of the circular economy. However, there will still be demand for raw materials which the EU circular economy cannot obtain easily, including cobalt, lithium, neodymium, graphite, and dysprosium.
Lessened exposure to supply risk for EU
The recent COVID-19 epidemic highlighted the fragility of global supply chains. The EU circular economy is expected to reduce the EU’s dependency on imports as the economy will be more self-sufficient. This will safeguard the economy against geo-political events, pandemics, and natural disasters which may cause supply chain instability.
Global trade in recyclable materials to change
The EU circular economy will see more products re-entering the economy as recycled or repurposed materials. Whenever products reach their end of life, they will be transformed into items of economic value, which will be traded once more.
Currently, the EU is a major exporter of recycled materials, which are mostly sent to China and Turkey. Some of these materials are also been sent to South-East Asia (Thailand, India, Vietnam, Indonesia and Malaysia).
Unfortunately, these countries often do not have the technology necessary to properly process this material, which has caused a great deal of pollution, waste, and environmental degradation.
The EU circular economy will increase the amount of recycled material available, but it will also increase the proportion that is used within the EU. The tighter regulations put in place by the circular economy should prevent waste dumping in other countries while dramatically increasing the size of the global recycled materials industry.
Global trade implications of product policies
The EU circular economy will have some implications for the importation of goods into the EU. There will be stricter standards for product durability, reusability and recyclability (in an efficient and safe manner). Additionally, policies like the extended producer responsibility (EPR) scheme will also come into play.
It is expected that these changes will make it more difficult for non-EU manufacturers to import products into the EU as they must meet higher quality standards. The other major change is that EU manufacturers may find themselves facing higher costs. This may place them at a competitive disadvantage when exporting to overseas markets.
New economic and employment opportunities driven by technology
The EU circular economy will require innovation from manufacturers, recycling companies, and regulatory bodies. It will also involve a significant investment in technology, which will drive economic growth and employment opportunities.
These opportunities will help the EU economy to grow and increase the types of products and services it exports. It is expected that it will also improve global environmental standards as EU companies work with international partners.
EU circular economy and trade: Improving policy: Improving policy coherence for sustainable development (2019). Marianne Kettunen, Susanna Gionfra and Misty Monteville