Digital Circular Economy For Net Zero

86 Pages Posted: 25 May 2022

See all articles by Patrick Bolton

Patrick Bolton

Columbia University - Columbia Business School, Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Peter Lacy

Accenture

Michael Spence

Stanford University

Ming Xu

University of Michigan at Ann Arbor - School of Natural Resources & Environment

Long Chen

Cheung Kong Graduate School of Business; Luohan Academy

Sangwoo Choi

Luohan Academy

Wei Liu

Luohan Academy; IIASA

Qi Sun

Luohan Academy

Bo Tang

London School of Economics & Political Science (LSE)

Date Written: April 22, 2022

Abstract

The climate crisis requires that economies around the world achieve carbon Net Zero by 2050. However, average annual GHG emissions during the 2010s have continued to increase (albeit at a decelerating rate) relative to global emissions in the first decade of the 21st century (IPCC AR6). Most of the emphasis in climate policy has been on accelerating the transition away from fossil fuel energy supply, on reducing carbon emissions from production, and on decarbonizing investment and financial markets. In comparison, relatively little emphasis has been put on the consumption side. This report begins with the analysis of two possible ways to get to Net Zero: digitalization and a Circular Economy, both of which have recently emerged as essential if we are to reduce GHG emissions as efficiently and effectively as possible. This report further argues that the key to achieving Net Zero is in promoting both digitalization and Circular Economy under a new economic system that is aligned with Net Zero goals, and that is changing our consumption patterns to attain sustainability. To be able to attain the Net Zero goal the entire socio-economic environment - incentives, culture, and social norms must also be transformed. We propose a concept called the Digital Circular Economy to which society should move to get to Net Zero. We illustrate how such a transformation crucially depends on digital technology, of course, but also on adequate systems of socio-economic governance that induce both the most efficient and effective forms of digitalization and Circular Economy through five case studies of recent business and technology innovations.

Keywords: Carbon emission, net zero, digitalization, circular economy, governance, multi-level perspective, socio-technical system

JEL Classification: P00, Q40, Q55, Q58

Suggested Citation

Bolton, Patrick and Lacy, Peter and Spence, Michael and Xu, Ming and Chen, Long and Chen, Long and Choi, Sangwoo and Liu, Wei and Sun, Qi and Tang, Bo, Digital Circular Economy For Net Zero (April 22, 2022). Available at SSRN: https://ssrn.com/abstract=4092608 or http://dx.doi.org/10.2139/ssrn.4092608

Patrick Bolton

Columbia University - Columbia Business School, Economics ( email )

420 West 118th Street
New York, NY 10027
United States

HOME PAGE: http://www0.gsb.columbia.edu/faculty/pbolton/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Peter Lacy

Accenture ( email )

Dublin
Ireland

Michael Spence

Stanford University ( email )

Stanford, CA 94305
United States

Ming Xu

University of Michigan at Ann Arbor - School of Natural Resources & Environment ( email )

440 Church St.
Ann Arbor, MI 48109
United States

Long Chen (Contact Author)

Cheung Kong Graduate School of Business ( email )

Oriental Plaza, Tower E3
One East Chang An Avenue
Beijing, 100738
China

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China
+86-0571-2688-8888-75520 (Phone)

Sangwoo Choi

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Wei Liu

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

IIASA ( email )

Austria

Qi Sun

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Bo Tang

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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