Trilemma or Trinity? The nexus of economic growth, circular economy and net zero

Basu, Parantap; Jamasb, Tooraj; Sen, Anupama

Abstract

How can economies achieve economic growth without causing negative environmental externalities? There are two aspects to the long-standing debate on 'sustainable growth'. A …rst-best solution is for economies to replace fossil fuels with renewable energy sources, mitigating carbon emissions. A second-best solution is to also adopt e¢ cient waste management , recycling residual waste and pollutants (including hard-to-abate carbon) from production (circular economy). We establish a simple growth model that integrates three fundamental pillars of economics: (i) the net zero carbon target in environmental economics (ii) the circular economy, dealing with waste management in resource economics, and (iii) sustainable growth, in growth economics. We argue that growth, circularity and net zero emissions present a trinity of solutions to the sustainable growth problem, showing that the circular economy is a necessary condition for achieving net zero. We show that an economy with 'active' environmental policy achieves net zero faster than one with 'passive' policy, and also eliminates carbon emissions.

Citation

Basu, P., Jamasb, T., & Sen, A. (2024). Trilemma or Trinity? The nexus of economic growth, circular economy and net zero. Energy Economics, 138, Article 107844. https://doi.org/10.1016/j.eneco.2024.107844

• Journal Article Type: Article
• Acceptance Date: Aug 17, 2024
• Online Publication Date: Aug 28, 2024
• Publication Date: Oct 1, 2024
• Deposit Date: Aug 21, 2024
• Publicly Available Date: Aug 28, 2024
• Journal: Energy Economics
• Print ISSN: 0140-9883
• Electronic ISSN: 1873-6181
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 138
• Article Number: 107844
• DOI: https://doi.org/10.1016/j.eneco.2024.107844
• Keywords: net zero; growth; circular economy; pollution; capital; recycling
• Public URL: https://durham-repository.worktribe.com/output/2763266