• 1% rise in CE cuts CO 2 by 0.048% and unemployment by 0.097% (SDG 13, 8, 10). • Growth drives CE (+0.806%) but also emissions (+0.504%), revealing growth-emissions tension. • Transport renewables cut CO 2 (−0.104%) but raise unemployment (+0.217%), signaling displacement risks. • Waste management creates jobs (−0.728% unemployment), transforming waste into green infrastructure. • Population density hinders circularity (−2.580%), requiring targeted urban spatial policies. The transition to a circular economy (CE) is increasingly promoted as a strategy for achieving sustainable development, yet empirical evidence on its simultaneous impacts across environmental, economic, and social dimensions remains limited. Anchored in Ecological Modernization Theory, this study examines how CE adoption influences sustainability outcomes in 18 European Union countries over 2010–2019 using two-way fixed-effects panel regressions on data from Eurostat, World Bank, and OECD sources. Circular material uses rate serves as the core CE indicator, with key drivers including renewable energy shares, renewable energy in transport, municipal waste, and socio-economic controls. Results show that a 1% increase in circular material use is associated with a 0.048% reduction in CO 2 emissions (p = 0.002), confirming significant environmental benefits (SDG 13, SDG 12). Renewable energy in transport exerts a stronger mitigating effect (−0.104%, p < 0.001), supporting sectoral decarbonization (SDG 7). Economic growth strongly drives CE adoption (0.806%, p = 0.001), but CE shows no significant direct effect on GDP per capita, indicating relative rather than absolute decoupling. Socially, CE modestly reduces unemployment (−0.097%, p = 0.022), while efficient waste management generates substantial labor-market benefits (−0.728%, p < 0.001), aligning with SDG 8 and SDG 10. However, renewables in transport associate with higher unemployment (0.217%, p = 0.001), highlighting transitional displacement risks. The findings affirm CE’s potential to deliver environmental and social co-benefits under deliberate policy steering, while underscoring persistent growth-emissions coupling and spatial constraints (negative density effect: −2.580%, p = 0.011). These results extend Ecological Modernization Theory by revealing both synergies and trade-offs in European CE transitions and provide evidence-based guidance for integrated policies that maximize multi-dimensional sustainability outcomes.
Oláh et al. (Thu,) studied this question.