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  • Kim Hjerrild & Ben Omol

Balancing Local Consumption and Global Supply Chains by Integrating Circular Economy Principles

In the intricate dance between local economies and the sprawling globalization of supply chains, the integration of circular economy principles emerges as a compelling solution to harmonize seemingly conflicting trends while mitigating environmental problems.

Currently, we find ourselves at a crossroads, where the linear production and consumption model persists due to its apparent cost-effectiveness across various sectors. However, the allure of this approach dims in the face of mounting externalities—ranging from waste generation to habitat degradation. Awareness of these consequences is on the rise, buoyed by regulatory shifts such as those initiated by the EU, which apply pressure on financial institutions, investors, and corporations to recalibrate their practices towards sustainability.

At the grassroots level, a shift towards local production and consumption is palpable. This transition is propelled by several factors, including heightened awareness of the benefits of proximity sourcing and circular solutions to bolster supply chain resilience. Concurrently, consumer demand for products aligned with environmental and community well-being drives the resurgence of locally sourced goods. For instance, in Denmark, families increasingly opt for plant-based meals sourced from regional organic farms, exemplifying a shift towards conscientious consumption.

To accommodate this trend for resilience and transparency, governments must challenge multinational corporations to shoulder greater responsibility for their impact on local communities. This entails diversifying supply chains and products while internalizing the external costs inflicted on these communities. By doing so, nations can incrementally boost their circularity levels, laying the groundwork for targeted interventions and strategic investments in a post-waste economy.

Despite geopolitical upheavals such as the Russia-Ukraine conflict, nations remain committed to the green transition and the cultivation of resilient supply chains. The imperative for resilience, underscored by the looming spectre of climate change and biodiversity loss, drives governments to prioritize strategies that simultaneously fortify their economies and reduce dependency on critical resources. In the European Union, for instance, the crisis has spurred a reevaluation of Critical Raw Materials (CRM), prompting a renewed focus on renewable energy systems and circular economic models. However, it's worth noting that while substantial investments are allocated to military purposes, redirecting these funds towards accelerating the green transition could yield far-reaching ecological benefits, preserving vital ecosystems ravaged by conflict.

In essence, the convergence of local consumption trends and global supply chains presents both a necessity and an opportunity to embrace circular economy principles. Through collaborative efforts and strategic policy interventions, nations can navigate this complex landscape towards a more sustainable future—one where economic prosperity aligns harmoniously with environmental stewardship.


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