CIRKULAR ECONOMY AND ITS CHALLENGES

The primary objective of this article is to assess the impact of increased investments in the circular economy on municipal waste generation and recycling rates in the EU27 countries. The article is structured into two main sections. The first section explores the historical development and theoretical foundations of the circular economy with a particular focus on the role of private investments in this advancement. The second section presents the findings of an empirical analysis. In the introduction, this study examines the trends in key statistical indicators of the circular economy, specifically highlighting private investments in the circular economy, the municipal waste recycling rate and the generation of municipal waste. The second section investigates the relationship between private investments in the circular economy and the recycling rate of municipal waste as well as the relationship between these investments and municipal waste generation in the EU27 countries. The analysis covers the period from 2012 to 2020, chosen to ensure a balanced dataset. The study employs fixed effects model and a random effects model for panel data analysis. The findings reveal a statistically significant positive impact of private investments in the circular economy on the recycling rate of municipal waste. Differences were observed between groups of countries based on their annual investment growth rates. However, the anticipated effect of increased investments in the circular economy on reducing municipal waste generation was not confirmed. The data for empirical analysis was sourced from Eurostat, and calculations performed using the Gretl software.