Trade‐Offs in Sustainable Development? The Relationship Between the Sustainable Development Goals and Circular Economy Outcomes in the European Union

Countries around the world have committed to a range of sustainable development initiatives aimed at advancing the Sustainable Development Goals and promoting the circular economy. However, the implementation of these sustainability initiatives entails substantial costs and resource requirements which may result in potential trade‐offs. We examine these sustainability trade‐offs by focusing on the relationship between the Sustainable Development Goals and the circular economy. Drawing on a panel dataset of European Union member states spanning 2009–2021, we find that progress on the Sustainable Development Goals is negatively associated with circular economy outcomes, indicating potential trade‐offs between these major sustainability initiatives. Furthermore, we find that strong environmental policy settings within ruling governments, higher levels of government spending, and greater trade freedom positively moderate the relationship between the Sustainable Development Goals and circular economy outcomes, thereby reducing sustainability trade‐offs. The findings of this study contribute to extant theory and have implications for policymakers.