Introducing the Circular Economy to Economists

Don Fullerton (), Callie W. Babbitt, Melissa M. Bilec, Shan He, Cindy Isenhour, Vikas Khanna, Eunsang Lee and Thomas L. Theis
Additional contact information
Callie W. Babbitt: Department of Sustainability, Golisano Institute for Sustainability, Rochester Institute of Technology, Rochester, New York, USA
Melissa M. Bilec: Mascaro Center for Sustainable Innovation, University of Pittsburgh, Pittsburgh, Pennsylvania, USA
Shan He: Department of Economics, University of Illinois at Urbana-Champaign, Urbana, Illinois, USA
Cindy Isenhour: Department of Anthropology and Climate Change Institute, University of Maine, Orono, Maine, USA
Vikas Khanna: Department of Civil and Environmental Engineering, University of Pittsburgh, Pittsburgh, Pennsylvania, USA
Eunsang Lee: Institute for Environmental Science and Policy, University of Illinois at Chicago, Chicago, Illinois, USA
Thomas L. Theis: Institute for Environmental Science and Policy, University of Illinois at Chicago, Chicago, Illinois, USA

Annual Review of Resource Economics, 2022, vol. 14, issue 1, 493-514

Abstract: A circular economy (CE) would reduce both extraction and disposal by encouraging green design and circular business models, as well as repair, reuse, remanufacturing, and recycling. The CE started among architects and engineers, with little interest among economists. This article introduces CE concepts to economists, introduces key insights about the CE from other disciplines, and describes how economists can use these insights for a more complete economic analysis of policies that can better improve human welfare. An economic model of CE behavior can benefit from understanding the environmental gains from green designs based on engineering,transaction-cost savings from information based on blockchain technology, life cycle assessments based on industrial ecology, and behavioral science concepts of cultural barriers and social decision making that affect how producers and consumers respond to incentives. With various disciplines brought to bear on the subject, the combined analysis can exceed the sum of its parts.

Keywords: blockchain; disposal; extraction; green design; life cycle assessment; recycling (search for similar items in EconPapers)
JEL-codes: H23 Q21 Q28 Q32 Q52 Q56 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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DOI: 10.1146/annurev-resource-101321-053659

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