Ecological Criteria for Comparing Linear and Circular Economies

Abstract

In the present article, the main principles of the circular economy are outlined in contradistinction with the existing and traditional linear economic model. An econometric model describing the influence of the linear economy on the environment is presented. The environment is characterized by seven key processes: change in global temperature; emissions of greenhouse gases from industry to the environment; emissions of greenhouse gases from agriculture to the environment; CO2 emissions into the environment; depletion of fresh water supplies; reduction of forest cover; and economic damage from climatological disasters. The model describing the impact of the traditional linear economy on the environment consists of seven interdependent econometric equations, each comprising an autoregressive distributed lag (ADL)-model. The proposed econometric model is used to analyze the environmental effects of the present linear economy. Methodological provisions for a transformational transition of the traditional linear economic model to the closed-loop systems, which also permit the impact of the closed-loop systems on the environment to be analyzed, are set out. Seven ecological indicators are proposed as criteria for comparing the traditional linear economy and the closed-loop systems. The manuscript presents a new approach for the determination of ecological criteria for comparing linear and circular economies. The results of the study could be interesting to address circular processes, which can be used as a criterion to establish ecological management according to the status of natural resources.