Circular resource efficiency through climatic governance and sustainable competitiveness interaction: Global policy insights for SDG 12

SDG 12 is about responsible consumption and production, and this study is particularly designed for its attainment using circular practices as its instrument. However, it is assumed that the interaction of climatic governance and sustainable competitiveness can make this happen. Circular practices are important because they reduce waste and pressure on resource utilization and support cleaner production. This study is based on global data from 2017 to 2024. For empirical analysis, Panel Quantile Regression (PQR) supported by Markov Chain Monte Carlo (MCMC) simulation is used, this technique is robust for endogeneity and non-normality. Further, robustness is confirmed through Bayesian regression. According to the results, as determinants, competitiveness and governance are showing higher pressure on natural resources by increasing the material footprint from biomass. But their interaction is favorable for more circular and sustainable outcomes. This interaction is tested on the 25th, 50th, and 75th Quantiles, and interestingly, only the 50th Quantile depicts highly satisfactory results. Economic globalization, renewable energy, and digitalization are the model’s controlling factors, and only economic globalization is favorable for circularity. Overall, this study provides valuable contributions for policymakers seeking to promote circular practices through sustainable competitiveness and climate governance.