SESSION 4_Alexandre Godzinski_Circular Economy- CIRCLE workshop Oct. 2014

1. 1
2 October 2014
Second ad-hoc technical workshop on CIRCLE
Alexandre Godzinski
French Ministry of Sustainable Development
Circular Economy:
A Computable General Equilibrium Approach

2. 2
Model: why, how and what for
•Motivation: explore and evaluate different instruments related to material efficiency and waste treatment in France
•Computable general equilibrium model which includes:
–Material flows (virgin ore extraction, material in final products, waste, scrap metal)
–Material stocks (ore in the ground, productive capital stock, landfill stock)
•Stylized tool to assess policies related to material efficiency and waste management, which are usually studied separately
•Model under construction! At the moment:
–World divided into two regions: France and the rest of the world
–Only one material: steel
•Output variables:
–Waste treatment (recycling rate, volume going to landfill…)
–Material efficiency (material productivity…)
–Usual economic outputs (GDP, consumption…)

3. 3
Household
Generic good
Mines
Consumption
Primary material
Waste treatment service
Waste treatement
Landfill
Recycling
Investment
Physical flows
Linear economy

4. 4
Household
Generic good
Mines
Consumption
Waste treatement
Landfill
Recycling
Investment
Circular economy
Waste treatment service
Secondary material
Physical flows

5. 5
Model structure
Household
Generic good
Mines
Consumption
Primary material
Secondary material
Waste treatment service
Capital
Labor
Waste treatment
Landfill
Recycling
Investment

6. 6
Application: reducing the volume of waste going to landfill
We consider two polar strategies:
•Taxing materials (both primary and secondary), so that final goods contain less material.
•Taxing landfill, so that more waste is recycled.

7. 7
Tax on materials
024681012141618200%50%100%150%200% Tax rate Volume of waste (million tons of steel) Volume of waste recycledVolume of waste going to landfill

8. 8
Tax on landfill
024681012141618200%50%100%150%200% Tax rate Volume of waste (million tons of steel) Volume of waste recycledVolume of waste going to landfill

9. 9
Thank you for your attention Comments welcome