@article{Chepeliev:333431,
      recid = {333431},
      author = {Chepeliev, Maksym and Aguiar, Angel and Farole, Thomas and  Liverani, Andrea and van der Mensbrugghe, Dominique},
      title = {EU Green Deal and Circular Economy Transition: Impacts and  Interactions},
      address = {2022},
      pages = {35},
      year = {2022},
      note = {Presented at the 25th Annual Conference on Global Economic  Analysis (Virtual Conference)},
      abstract = {Rapidly increasing material extraction is putting major  pressure on ecosystems. Future increases in incomes and  population could result in over 2.5 times growth in global  material demand by 2050, putting even more pressure on  environment. Thus, an absolute decoupling of material use  from GDP and income is of major importance to preserve the  safe operating boundaries. It is vital to understand how  current policy efforts, including climate mitigation, could  impact material use patterns and what complementary  circular economy (CE) policies should be implemented to  support dematerialization. Here we develop a special  version of the Global Trade Analysis Project (GTAP)  database (GTAP-CE) with detailed representation of primary,  secondary, and recycling activities for metals (steel,  aluminum, copper, etc.) and plastics. We also incorporate  quantity flows of metal ores and non-metallic minerals. We  investigate a set of scenarios focusing on Europe that  include mitigation and CE-specific policies using a dynamic  general equilibrium model (ENVISAGE). A set of CE-specific  policies includes fiscal measures to stimulate recycling  and penalize primary production, extraction levies (for  non-metallic minerals), and demand-side measures, such as  shifts in consumption patterns toward dematerialization,  changes in the product design and product lifetime  extensions. We also model various border tax adjustments  covering embodied raw materials and consider alternative  revenue recycling mechanisms. Our results indicate that EU  mitigation measures will have a moderate impact on material  use. Similarly, materials-focused measures will have only a  modest impact on CO2 emissions. Aggregate material use in  the EU could decline up to 8-11% (relative to baseline in  2030) under alternative CE policies allowing to achieve  absolute decoupling. We also find that using CE production  taxes’ revenue to reduce labor taxes would lead to increase  of growth and welfare.},
      url = {http://ageconsearch.umn.edu/record/333431},
}