Assessment of the potential of a circular economy in open economies – Case of Belgium

Interest from the research and policy community in the circular economy (CE) is growing. This research describes how the potential for a circular economy in open economies can be estimated by using different assessment methods. Methods and indicators have been selected that have a relevance for one or more of the public policy objectives for circular economy: Openness Index, economic structure, Balassa Index, value chain analysis, substitution potential of Sustainable Materials Management (SMM) strategies, waste treatment scenarios based on physical and hybrid Input-Output (IO) analysis. These methods differ in scope and degrees of complexity and are used at different assessment levels. The potential for a circular economy in this paper is assessed by evaluating the contribution to the public policy objectives for CE: resource efficiency, reduction of dependency on materials, competitiveness, creation of domestic jobs, reduced Greenhouse Gas (GHG) emissions. Results obtained by these methods are shown for Belgium and, in some cases, compared to the results of other countries to illustrate the differences between economies. CE activities (in response to public policy objectives) will enhance the ongoing trend of reducing the share of primary sectors in economies. The openness of an economy is expressed as the ratio of sum of import and export and Gross Domestic Product (GDP). Imported products add to the potential of domestic closed-loop circular initiatives like re-use, repair, remanufacture, recycling, but this will require knowledge about composition and spare part availability. Exported products are no longer available for these domestic CE initiatives, reducing the domestic potential for CE and the domestic export activity is vulnerable to CE activities abroad. Especially the increasing geographical distance in trade complicates the practical and legal barriers to close the loop. In open economies, both global and domestic substitution effects due to new circular economy policy initiatives are important to consider.