A circular economy implies the systemic change that goes beyond waste management and resource efficiency. It aims to design out waste and wasteful underutilization, and covers the whole lifecycle of products – from design to collection to recycling. The benefits of the circular economy are far-reaching. They include stimulating economic prosperity and creating job opportunities as well as reducing pressure on the environment and cutting CO2 emissions, one of the greatest contributors to climate change.
The Global Resources Outlook 2019 – published by the International Resource Panel (IRP) and the United Nations Environment Programme (UNEP) – showed that over 50% of global greenhouse gas (GHG) emissions are caused by natural resources extraction and processing; only the extraction and first refinement of raw materials cause over 20 gigatons of CO2 per year. These materials include metals, non-metallic minerals, biomass and the extraction and refinery of fossil fuels. If you look at what is more commonly referred to as “materials”, namely metals, minerals, construction wood and plastics, this alone amounts to almost a quarter of all global emissions.
It can’t be business as usual
The demand for material, in a business-as-usual scenario, is projected to double by 2060. At this rate, there is almost no way to decarbonize all that production in time and without massive trade-offs. The only chance then of reaching the 2030 and 2050 global climate goals is to deploy all possible measures possible to defy the business-as-usual scenario. This is where natural resources management, and the circular economy, as an important instrument, comes into play.
The most effective way is to start by looking where product systems meet societal needs.
Take for example the construction of houses and manufacturing of vehicles. How many of them are actually needed and used and could the systems for making them be redesigned in a more efficient way? There are great opportunities across sectors to design and create smarter. Cities can become more compact with more material-efficient buildings. Transport can become shared, connected and more integrated, which means less carbon-emitting cars. Production processes that (re)manufacture the elements of those circular and efficient product systems then still need to become cleaner, using renewable energy and alternative materials.
It is not only about houses and vehicles. Heavy machinery can also be shared through smart platforms and remanufactured given the right design. On the bio-material front, or biomass, it is possible to create healthy meals with more plant-based proteins, reduce food waste, enable nutrient cycling and design agricultural practices in regenerative ways. There are many other examples of how to reduce material use in industry and everyday life.
Policy and good governance for a cleaner future
Current climate policies tend to focus on how to clean up energy production and how to use cleaner energy in industrial production, often without asking how much of that production is useful for society in the first place. While energy efficiency is considered, policies do not always look at how systems, such as housing or mobility, can be more resource efficient and circular as a whole, avoiding energy-intense production from the get-go.
There is a double benefit to systemic circular measures – that is to say, the inherent synergy between systemic dematerialization measures and operational energy use. What does this mean? If you design a city for systemic material efficiency, you will have more compact neighbourhood designs, space-efficient buildings, shorter commutes and fewer cars. All of these reduce material consumption as well as the need for heating or fuel use – a double win in the fight against climate change.
The circular economy can also inspire better governance. At the heart of this resource management approach is the idea of understanding drivers of impacts. Through analysis of material flows, we can trace wanted or unwanted impacts back through their direct and indirect causes in supply chains and their drivers in economic and human behaviour. In governance, the logic should be the same.
The difficult reality for policymakers responsible for the protection of the environment is that they are responsible for solving the problems, while the majority of the tools and instruments for effective solutions are in the hands of other colleagues in government. The success of environmental policy to a large extent, therefore, depends on the understanding and willingness of those colleagues to listen and associate their voices with environmental policy, in particular the understanding and willingness of those colleagues that are responsible for the areas with the highest environmental impacts – impacts on climate change, biodiversity loss and pollution. Only by bringing those in charge of the impacts, together with those in charge of resource use, can an effective joint vision and targets be developed.
At the political level, it would help if environmental policymakers would join forces with those in charge of economic and social incentives that shape production and consumption, to better share the responsibility in finding and delivering solutions and creating joint ownership to promote a responsible Sustainable Development Goals-oriented circular economy.
Formalizing circular economy solutions
United Nations climate change conferences as well as other global environmental processes do not necessarily bring together those in charge of resource use drivers. These forums are already complex and big, and their task to specify impact targets, reporting frameworks, and so on, is already huge.
What is needed then is a global forum where those with direct policy influence on the resource drivers are encouraged to take part in finding solutions, taking real ownership of the agenda of sustainable resources management. A formal, intergovernmental process where environmental, economic and social decision-makers can discuss the fundamental transitions necessary towards a global economic model that keeps resource use within planetary boundaries while improving global social equity. Voluntary alliances and compacts will not be sufficient.
Existing fora, such as the World Circular Economy Forum, are crucial to bring together business leaders, policymakers and experts – so they can start co-creating solutions on the ground and shaping a process towards more formal engagement.
We have a unique chance and an enormous responsibility to recover better post-COVID. The circular economy is an essential ingredient if we want to succeed.
Janez Potocnik, Co-Chair of the International Resource Panel and Partner at SYSTEMIQ
Julia Okatz, Programme Manager Natural Resources at SYSTEMIQ
