Assessing recycling, displacement, and environmental impacts using an economics‐informed material system model

Material production drives an increasingly large fraction of CO2‐equivalent emissions. Material efficiency strategies such as recycling serve to reduce these emissions. Current analyses of the effectiveness of such strategies do not include economically induced rebound effects, overestimating the associated environmental benefits. We present a dynamic supply chain simulation model for copper through 2040 incorporating inventory‐driven price evolution, dynamic material flow analysis, and life cycle assessment alongside mine‐level economic evaluation of opening, closing, and production decisions. We show that permanent increases in recycling displace ∼0.5 kilotonnes mine production per kilotonne increase in scrap supply on average, while short‐lived recycling policies can lead to increased mine production. We find evidence for supply chain evolution pathways minimizing the rebound effect and maximizing displacement of primary material, where increasing refined copper and concentrate prices and decreasing demand serve to decrease mining. However, even in best‐case scrap supply scenarios, CO2e emissions from the copper sector increase 25% by 2040 relative to 2018 due to demand growth, ore grade decline, and lower displacement among large scrap supply changes. With implementation of best available technologies across all supply chain components, we estimated 2040 CO2e emissions 10% below those of 2018 are possible, though still well short of 2°C emissions targets. We find increasing mine taxes and royalties, reclamation costs, and exploration costs further increase displacement, as does the inclusion of scrap prices on major futures exchanges. These results highlight the importance of considering the economics of the entire material supply chain when implementing material efficiency strategies. This article met the requirements for a Gold‐Gold JIE data openness badge described at http://jie.click/badges.