The consequences of a more resource efficient and circular economy for international
trade patterns
A modelling assessment
This report investigates the effects of a resource efficiency and circular economy
(RE-CE) transition on international trade flows, using the OECD’s ENV-Linkages model.
A global RE-CE policy package will cause secondary materials to become cheaper, while
primary materials become more expensive to produce. By 2040, primary non-ferrous metals
are projected to decline by 35-50%, primary iron & steel by 15% and primary non-metallic
minerals by around 10%. Regional shifts in production and trade-related effects (shifts
in the regional sourcing of the primary materials by the materials processing sectors)
account for roughly one-third of the total reduction in materials use. The other two
thirds of materials use reduction come from scale effects (reduced economic activity)
and efficiency effects (reduced materials use per unit of output of the processed
commodities).
A circular economy aims to transform the current linear economy into a circular model to reduce consumption of finite material resources by recovering materials from waste streams for recycling or reuse, using products longer, and exploiting the potential of the sharing and services economy. Circular economy policies and initiatives largely take place domestically at the national or regional level. However, they have important interlinkages with international trade.
International trade plays an important role in circular supply chains in materials and products, end-of-life value chains in waste and scrap, secondary raw materials and second-hand goods. In this light, how can trade contribute to a more resource efficient and circular economy? How would the circular economy transition have an impact on global trade patterns? And in what ways can we secure coherence in these two policy areas?
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