A critical analysis of the impacts of COVID-19 on the global economy and ecosystems and opportunities for circular economy strategies

Abstract

The World Health Organization declared COVID-19 a global pandemic on the 11th of March 2020, but the world is still reeling from its aftermath. Originating from China, cases quickly spread across the globe, prompting the implementation of stringent measures by world governments in efforts to isolate cases and limit the transmission rate of the virus. These measures have however shattered the core sustaining pillars of the modern world economies as global trade and cooperation succumbed to nationalist focus and competition for scarce supplies. Against this backdrop, this paper presents a critical review of the catalogue of negative and positive impacts of the pandemic and proffers perspectives on how it can be leveraged to steer towards a better, more resilient low-carbon economy. The paper diagnosed the danger of relying on pandemic-driven benefits to achieving sustainable development goals and emphasizes a need for a decisive, fundamental structural change to the dynamics of how we live. It argues for a rethink of the present global economic growth model, shaped by a linear economy system and sustained by profiteering and energy-gulping manufacturing processes, in favour of a more sustainable model recalibrated on circular economy (CE) framework. Building on evidence in support of CE as a vehicle for balancing the complex equation of accomplishing profit with minimal environmental harms, the paper outlines concrete sector-specific recommendations on CE-related solutions as a catalyst for the global economic growth and development in a resilient post-COVID-19 world.

Keywords: COVID-19; Circular economy; Climate change; Supply chain resilience; Sustainability; Sustainable development.

Fig. 1.

Methodological framework for the critical literature review.

Fig. 2.

A summary of how some Eastern European / Mediterranean countries have advantages over China on certain exports – based on the Harmonized Commodity Description and Coding System from 2018, where export volume is represented by dot sizes in millions of USD; Source: Javorcik (2020).

Fig. 3.

Daily confirmed new COVID-19 cases of the current 10 most affected countries based on a 5-day moving average. Valid as of August 31st, 2020 at 11:46 PM EDT (JHU, 2020).

Fig. 4.

Socioeconomic impact of COVID-19 lockdown: (a) Comparison of global economic recession due to COVID-19 and the 2009 global financial crisis; (b) Advanced economies, emerging and developing economies in recession; (c) the major economies in recession; (d) the cumulative economic output loss over 2020 and 2021. Note: Real GDP growth is used for economic growth, as year-on-year for per cent change (IMF, 2020).

Fig. 5.

Impact of pandemics on global supply chains. Adapted from Eaton and Connor (2020).

Fig. 6.

Impact of past disease outbreaks on aviation (Air Transport Bureau, 2020).

Fig. 7.

The impact of COVID-19 on tourism in quarter 1of 2020. Provisional data but current as of 31st August 2020 (UNWTO, 2020).

Fig. 8.

The upper part shows the average nitrogen dioxide (NO₂) concentrations from January 1-20, 2020 to February 10-25, 2020, in China. While the lower half shows NO₂ concentrations over Europe from March 13 to April 13, 2020, compared to the March-April averaged concentrations from 2019 (ESA, 2020; NASA, 2020a).

Fig. 9.

Annual rate of change in primary energy demand, since 1900, with key events impacting energy demand highlighted (IEA, 2020).

Fig. 10.

Global energy-related emissions (top) and annual change (bottom) in GtCO₂, with projected 2020 levels highlighted in red. Other major events are indicated to provide a sense of scale (IEA, 2020).

Fig. 11.

Drivers of representative four (4) global pollutants: a) CO₂ emissions; b) NO_x emissions; c) SO_x emissions; d) CO emissions. All data for the decomposition analysis of the four pollutants were obtained from the WIOD database (Timmer et al., 2012).