Assessing the linkages between recycling, renewable energy and sustainable development: evidence from the OECD countries

Abstract

The aim of this study is to analyze the circular interconnections between recycling, renewable energy and economic development. A multi-equation system is employed, where recycling and renewable energy (among other growth-inducing factors) are assumed to be important for promoting sustainable development (as provided by the Human Development Index), showing that both are mostly driven by technology and human capital skills. The system of simultaneous equations is estimated in static and dynamic form through 3sls, exploring panel data for a set of 28 OECD countries over the period 2000–2016, capturing in this way important linkages between the levels of economic development, renewable energy consumption and recycling rates. The empirical evidence shows that the circular process is characterized by cumulative linkages with feedback effects, where recycling and renewable energy are important policy factors for generating sustainable economic development with less climate deterioration. This result supports the idea of circular interconnections between economic development and green policies, through renewables and recycling, generating a self-sustained development without environmental deterioration.