CIRCEE, the CIRCular Energy Economy model: Bridging the gap between economic and industrial ecology concepts

Abstract

Transitioning to a circular economy (CE) can contribute to the achievement of long-term climate targets. A comprehensive evaluation of CE strategies requires a macro-level approach that integrates environmental, social, and economic goals. Policy support, behavioral changes, innovation, and new business models play key roles in this transition. Additionally, understanding the potential synergies, benefits, and trade-offs associated with these strategies is essential for their effective implementation. This paper proposes a novel approach, using macroeconomic modeling, industrial ecology, and behavioral concepts to evaluate the impacts of CE strategies on socioeconomic and climate systems. As an application, the paper investigates the environmental and economic effects in Japan of increasing the extended producer responsibility (EPR) fee on energy-using durable goods. We show that increasing the fee makes households substitute conventional goods for circular services. Also, while increasing EPR fees for energy-using durable goods may decrease the materials needed to produce and operate these goods, the overall impact on sustainability goals is rather low.