Study identifies main macroeconomic effects of a transition to a circular economy in Latin America

The study delves into the effects of this transition in four key sectors: plastics, metals, building materials and fuels.

2 March 2022, Santiago de Chile, Chile. With the aim of disseminating and discussing the results of the study that aims to analyse the effects of the transition, the webinar “Macroeconomic effects of the transition to the circular economy in Latin American countries” was held. The study was developed as part of the contribution provided by the European Union (EU), through its EUROCLIMA+ programme, to Chile in its role as Presidency of COP 25, and was carried out by Econometría Consultores, with the support of ECLAC and circular economy specialists from different countries in the region. The event was attended by decision-makers from Latin American governments and others interested in the circular economy. 

The study delves into the effects of this transition in the Pacific Alliance countries in four key sectors: plastics, metals, construction materials and fuels, together with the presentation of a macroeconomic model to analyse its effects.   

The circular economy aims to improve the efficiency of production and consumption systems in order to reduce the extraction of new resources and thus avoid negative impacts on ecosystems. It is also considered a policy driver of sustainable development with a high potential to contribute to a transformative recovery with a smaller environmental footprint. The circular economy not only contributes to preserving the value of materials and products for as long as possible, reducing waste generation and closing their life cycle, it also has the capacity to generate impacts on employment, GDP growth, imports and Greenhouse Gas (GHG) emissions. 

The virtual meeting was attended by Joseluis Samaniego, Director of the Sustainable Development and Human Settlements Division of ECLAC, and Ewout Sandker, Head of Cooperation of the European Union in Chile, who opened the event. Both representatives highlighted the importance of the study for increasing certainty in decision-making and the formulation of public policies in the region, as well as the relevance of the circular economy, which could reduce GHG emissions globally by 45%. 

 

JSAMA

 

“Considering the current situation, the circular economy offers the opportunity to restore and maintain the usefulness of products, components and materials in order to preserve their value, by changing the production model, redesigning processes and products, creating business models, providing feedback on resource flows and creating value. For this reason, and knowing the interest of the countries of the region in this topic, this study is presented today, which offers countries a model and a tool to measure the effects of the transition to the circular economy on variables such as GDP, employment, trade balance and greenhouse gas emissions," emphasised Joseluis Samaniego. 

 

 

Captura de Pantalla 2022 03 02 a las 09.45.07

Ewout Sandker then pointed out that "there are still many challenges that Latin America must face in this area and the transition to a circular economy will be a long road that we must travel together. This is why we must accelerate the implementation of concrete actions to demonstrate the advantages of a more efficient use of energy, the development of new energy sources such as green hydrogen, the reduction of emissions and the optimisation of supply chains. We believe that studies such as the one presented today will serve to reinforce its importance and benefits, thus facilitating the deployment of the circular economy in the region".  

 

 

 

Óscar Rodríguez Nieto, director of the consultancy, highlighted in the presentation of the study the positive effects that the transition to the circular economy can have, such as GDP growth, employment and GHG reduction, as shown in the following graph. 

Osacar_rodrigez.jpg     grafico 02 03 22 

On the other hand, Guillermo Rudas, also representing Econometría, presented the tool for modelling the macroeconomic effects of the transition to the circular economy to be applied in Latin American countries. The model allows consulting the cases analysed, as well as the entering of data for new simulations.  

2.jpg     3     4 

For his part, the head of the Circular Economy Office of the Ministry of Environment, Guillermo González, who moderated the panel with member countries of the Pacific Alliance, said that "this study confirms that caring for the planet and economic development are not conflicting objectives, but quite the opposite, and that the circular economy is a fundamental way to achieve both objectives and move towards sustainable development".  

The panel, composed of representatives from the Ministry of Economy and Finance of Peru and the Ministry of Economy of Mexico, analysed the implications of this study to generate changes in the productive structure of their countries and recognised the usefulness of the study and its tool to facilitate the conversation between different ministries and key actors.   

Finally, Joseluis Samaniego, director of ECLAC's Sustainable Development and Human Settlements Division, concluded that "these exercises show us a map of the benefits of moving forward as a whole, highlighting which sectors give better results than others. The macroeconomic exercise allows us to choose, firstly, the best options for a country and, at the same time, to show that, if we move forward collectively, the positive results for the economy are maximised. In this way, it is possible to take steps forward in the development strategy, being able to differentiate the sectoral and regional interests of the countries and thus make more decisive decisions for enabling value chains".  

The study will soon be published at https://cop25ue.mma.gob.cl/, at https://www.cepal.org/es and at https://www.euroclima.org. The webinar is available on the channel YouTube de EUROCLIMA+.  

 

Presentation of the Macroeconomic effects of the transition to the circular economy in Latin American countries (Available only spanish)

EUROCLIMA+  

EUROCLIMA+ is a programme funded by the European Union and co-financed by the German federal government through the Federal Ministry for Economic Cooperation and Development (BMZ), as well as by the governments of France and Spain through the Ministry of Foreign Affairs, European Union and Cooperation.  

The Programme's mission is to reduce the impact of climate change and its effects in 18 countries in Latin America and the Caribbean, promoting mitigation, adaptation, resilience and climate investment. It is implemented according to the "Spirit of Team Europe" under the synergistic work of seven agencies: the Spanish Agency for International Development Cooperation (AECID), the AFD Group: French Development Agency (AFD)/ Expertise France (EF), the Economic Commission for Latin America and the Caribbean (ECLAC), the International and Ibero-America Foundation for Administration and Public Policy (FIIAPP), the German Society for German Cooperation (GIZ) GmbH, and the UN Environment Programme (UNEP). 

More information:  

Euroclima is the European Union's flagship programme on environmental sustainability and climate change with Latin America. It aims to reduce the impact of climate change and its effects in Latin America by promoting climate change mitigation and adaptation through resilience and investment. 
© 2023 | Euroclima All rights reserved. | Legal Notice