FDI and Energy: How They Shape Recycling in the EU

The European Union has been exploring how foreign direct investment (FDI) and energy use affect the recycling rates across its member states from 2000 to 2021. Interestingly, money coming in from other countries (inflow) can boost local productivity but might cut down on recycling efforts. This is because more production often means more waste. On the other hand, money going out (outflow) can reduce waste since there's less production happening locally. Lower energy intensity, which means using energy more efficiently, has a positive effect on recycling. This shows that being smarter about energy use can help the EU's goal of creating a circular economy, where waste is minimized and resources are reused. To make this work better, the EU could set up special zones that handle FDI inflows and manage the waste from these productive activities. This would help improve resource efficiency overall.