How Does the Circular Economy Asymmetrically Affect Clean Energy Adoption in EU Economies?

Brahim Bergougui () and Ousama Ben-Salha ()
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Brahim Bergougui: International Institute of Social Studies (ISS), Erasmus University Rotterdam, 2491 AA The Hague, The Netherlands
Ousama Ben-Salha: Humanities and Social Research Center, Northern Border University, Arar 91431, Saudi Arabia

Sustainability, 2025, vol. 17, issue 21, 1-27

Abstract: The European Union’s commitment to achieving climate neutrality by 2050 requires sustainable economic models that address both environmental degradation and energy security. While renewable energy technologies are recognized solutions to climate change, the relationship between circular economy principles and clean energy transition remains underexplored empirically. This study investigates the asymmetric relationship between circular economy implementation and clean energy development across 27 EU economies from 2010–2023. Using Method of Moments Quantile Regression to capture distributional heterogeneity, we reveal pronounced asymmetric effects of circular economy shocks on clean energy adoption. Positive circular economy shocks demonstrate amplified benefits in high-performing clean energy economies, with elasticity coefficients increasing across quantiles, indicating that nations with established renewable infrastructure optimally capitalize on circular economy improvements through synergistic effects. Conversely, negative shocks manifest heterogeneous impacts: lower-performing countries experience significant clean energy contractions, while advanced economies exhibit resilience, suggesting adaptive mechanisms that enable resource reallocation toward alternative sustainability pathways. These findings provide policymakers with an analytical foundation for optimizing circular economy strategies to accelerate EU climate-neutrality objectives while accounting for heterogeneous national circumstances and transition pathways.

Keywords: circular economy; clean energy; EU members; method of moments quantile regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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