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Will circular economy actions deliver what is promised? A comparative analysis using static and dynamic environmentally extended input-output simulation models

Author

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  • Heikkinen, Mari
  • Savolainen, Hannu
  • Huuki, Hannu
  • Karhinen, Santtu

Abstract

The circular economy (CE) has been suggested as a means to decouple economic growth from resource use and its negative environmental impacts. In this article, we analyze CE actions' potential economic and environmental impacts using two models: the dynamic, environmentally extended input-output (EEIO) simulation model ENVIMATscen and the static EEIO model ENVIMAT. We introduce the ENVIMATscen model, which addresses some static input-output (IO) models' shortcomings, and discuss its strengths and weaknesses compared with other types of environmentally extended economic models. Long-term economic and environmental impacts of material efficiency improvement and product lifetime extension are demonstrated through a case study. Our findings indicate that a combination of CE actions potentially can mitigate negative environmental impacts while strengthening the economy. Furthermore, we conclude that the lack of dynamics in the employed model framework might elicit biased results from a long-term scenario analysis.

Suggested Citation

  • Heikkinen, Mari & Savolainen, Hannu & Huuki, Hannu & Karhinen, Santtu, 2026. "Will circular economy actions deliver what is promised? A comparative analysis using static and dynamic environmentally extended input-output simulation models," Ecological Economics, Elsevier, vol. 247(C).
    • Handle: RePEc:eee:ecolec:v:247:y:2026:i:c:s0921800926001278
    DOI: 10.1016/j.ecolecon.2026.109042
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