Digital transformation is increasingly recognized as a means to help unlock the benefits of more inclusive and sustainable growth and enhanced social well-being. In the environmental context, digitalization can contribute to decoupling economic activity from natural resource use and their environmental impacts.
This paper takes stock of the implications of digitalization for the transition to a resource-efficient and circular economy. It provides insights into how digitalization may fuel circular business models in the private sector, and discusses the role of digital technologies in addressing some important market failures that stand in the way to scaling up circular activities. It also offers a public sector perspective by exploring how digital technologies support effective delivery of circular economy policies, enabling better policy design, reshaping government-citizen interaction and improving implementation of policies.
Additionally, the paper maps potential unintended consequences of the digital circular transition, including general risks related to data, security, privacy and transparency, as well as rebound effects and unexpected regulatory interventions.