FEEM working papers "Note di lavoro"
2022.05
Date: 17/02/2022

The economic returns of circular economy practices


Authors:

Davide Antonioli (Department of Economics and Management, University of Ferrara and SEEDS – Centre for Sustainability, Environmental Economics and Dynamics Studies);  Claudia Ghisetti (Università degli studi di Milano Bicocca); Massimiliano Mazzanti (Department of Economics and Management, University of Ferrara and SEEDS – Centre for Sustainability, Environmental Economics and Dynamics Studies);  Francesco Nicolli (Department of Economics and Management, University of Ferrara and SEEDS – Centre for Sustainability, Environmental Economics and Dynamics Studies)

JEL n.: O30, O44, O55
Keywords: Circular Economy, Sustainable Production, Environmental Innovation, Economic Effect

Abstract

Assessing the economic consequences of sustainable production choices aimed at reducing environmental negative externalities is crucial for policy making, in light of the increasing interest and awareness experienced in the recent EU policy packages (Circular Economy package; European Green Deal and Recovery Fund to support sustainable transition). This assessment is one of the goal of the current work, which tries to provide new empirical evidence on the economic returns of such choices, drawing on previous literature on the underlying determinants of greener production choices, which are stated to differ from standard technological innovations as they are subject to a knowledge and an environmental externality. Using an original dataset on about 3000 Italian manufacturing firms we provide evidence on the relations among innovations related to the Circular Economy concept and economic outcome in the short run. The evidence shows that in the short run it is difficult to obtain economic gains, especially for the SMEs.

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Suggested citation: D. Antonioli, C. Ghisetti, M. Mazzanti, F. Nicolli, (2022), 'The economic returns of circular economy practices', Nota di Lavoro 05.2022, Milano, Italy: Fondazione Eni Enrico Mattei

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