Circular economy in transition: Econometric evidence from an Australian waste system

The circular economy (CE) has become a central framework for aligning economic growth with environmental sustainability, yet empirical evidence on its regional transition dynamics remains limited. This study examines the interrelationships between economic and environmental determinants of circular performance in Australia’s Northern Territory (NT), a resource-dependent, geographically dispersed region facing persistent circularity gaps. Using panel econometric techniques integrated with quantile-based estimation and sensitivity analyses, the study assesses how gross state product (GSP), industrial turnover, and greenhouse gas emissions jointly influence circular performance across major waste streams between 2017 and 2023. Results reveal that GSP positively associates with circularity, reflecting the enabling role of economic expansion and CE investment. In contrast, industrial turnover shows an inverse relationship, indicating a material intensity. Emissions rise with higher circular performance, highlighting an energy–circularity trade-off. This study contributes to the literature on the CE transition by providing a regionally grounded, system-level analysis of how economic scale and environmental intensity influence circularity outcomes. The findings offer evidence-based insights for innovation-led and low-carbon policy design that aligns CE objectives with regional development priorities, supporting the effective implementation of the NT’s Circular Economy Strategy 2022–2027 and strengthening the resilience of its emerging material economy. • Regional circular performance is shaped by economic scale and industrial structure • Industrial turnover constrains circularity despite overall economic growth • Circular gains coincide with higher emissions, revealing a transition trade-off • Circular performance converges unevenly across major waste streams over time • Evidence supports policy alignment of the circular economy and regional development