Europe’s economy has generated unprecedented wealth over the past century. Part of the success is attributable to continuous improvements in resource productivity—a trend that has started to reduce Europe’s resource exposure. At the same time, resource productivity remains hugely underexploited as a source of wealth, competitiveness, and renewal. Europe’s economy remains very resource dependent. Views differ on how to address this against an economic backdrop of low and jobless growth as well as the struggle to reinvigorate competitiveness and absorb massive technological change.

Proponents of a circular economy argue that it offers Europe a major opportunity to increase resource productivity, decrease resource dependence and waste, and increase employment and growth. They maintain that a circular system would improve competitiveness and unleash innovation, and they see abundant circular opportunities that are inherently profitable but remain uncaptured.

Others argue that European companies are already capturing most of the economically attractive opportunities to recycle, remanufacture, and reuse. They maintain that reaching higher levels of circularity would involve an economic cost that Europe cannot afford when companies are already struggling with high resource prices. They further point out the high economic and political cost of the transition.