On the Economics of the Transition to a Circular Economy

Humanity is facing complex challenges posed by population growth, climate change, and the need to increase food, feed, fiber, and bioenergy production while confronting the scarcity of natural resources. The transition to a circular economy, characterized by reduced resource use and waste, is being increasingly recognized in academic, business, and policy making circles as essential to meeting these challenges, with the emphasis being on the development of methods and processes that enable and facilitate the transition from a linear to a circular economy. This paper argues the need for an increased emphasis on the economics of the circular economy and presents a general framework that illustrates the transition from a linear to a circular economic system. In addition, the paper highlights the economic issues that arise during the transition to increased circularity and the policy options available to facilitate the successful transition to a more circular economic system.