A Cybernetics Approach and Autoregressive Distributed Lag Econometric Exploration of Romania’s Circular Economy

The purpose of this study, which adopts a cybernetics systems approach, is to analyze the circular economy landscape in Romania. It investigates the role of circular economy practices in the country’s endeavors to combat climate change and minimize its environmental footprint. Using data spanning from 2000 to 2022, we applied the autoregressive distributed lag (ARDL) model to examine the interdependence between CO2 emissions and key factors, such as GDP per capita, the recycling rate of municipal waste, and the generation of municipal waste per capita. Our findings suggest that the implementation of sustainable development strategies in Romania has successfully decoupled economic growth from environmental sustainability. This study introduces novelty by approaching the ARDL analysis through the integration of circular economy principles into a cybernetics system. This perspective contributes to informed decision making and the establishment of efficient tactical, operational, and strategic directions. Our results indicate that, in the long run, both the recycling rate of municipal waste and the generation of municipal waste per capita positively influence CO2 emissions, while GDP per capita has a negative impact. Variance decomposition and impulse response functions were employed to assess the explanatory variables’ influence on CO2 emissions and their effectiveness in explaining temporal fluctuations.