Just nine percent of the 92.8 billion tonnes of minerals, fossil fuels, metals and biomass that enter the economy are re-used annually, according to the latest Circularity Gap Report.

As much as 62 percent of global greenhouse gas emissions – excluding those from land use and forestry – is released during the extraction, processing and manufacturing of goods.

Despite the fact that we already live on a planet that is 1°C warmer than pre-industrial levels, global use of materials is still accelerating.

Unprecedented changes

We live in a linear, Take-Make-Waste economy. Materials extraction has more than tripled since 1970 and could double again by 2050 without action, according to the UN International Resource Panel.

This is a bad place to be – but the remedies are easy to grasp. We can see the climate risk in ‘business-as-usual’. The ingrained habits of unchecked consumption are not sustainable.

Cutting waste is part of the answer to tackling climate change. The circular economy is potentially the missing piece of the jigsaw.

If we are to bridge the Emissions Gap and get back on track towards a target limit of 1.5°C, then closing the Circularity Gap is not merely desirable. A 1.5° world can only be a circular world.

That transition to a circular economy is the paradigm shift that can help us achieve “rapid, far-reaching and unprecedented changes in all aspects of society”, as called for in the Paris Climate Agreement.

Resources for governments

For a low-carbon future, we need a circular economy; there is no other way. Our world must become more than 9 percent circular. 

To date, most governments have focused their green agenda on renewable energy, energy efficiency and avoiding deforestation.

Policy-makers have overlooked the vast potential of the circular economy to achieve the Paris goals. Re-use, re-manufacturing and recycling, greater resource efficiency and circular business models offer huge scope not only reduce emissions, but also to boost growth through efficiency gains.

The Report calls on governments to take action to move from a linear economy to a circular model that maximises the use of existing assets, while reducing dependence on new raw materials and minimising waste.

Innovation to extend the lifespan of existing resources will not only curb emissions but also reduce social inequality and foster low-carbon growth.

Practical examples 

The Netherlands has set itself a target of becoming 50 percent circular by 2030, and 100 percent by 2050.

Governments control the levers to drive change through direct fiscal tax-and-spend measures. They should start by abolishing incentives which encourage overuse of scarce natural resources, such as subsidies for fossil fuels.

It makes sense to raise taxes on emissions, extraction and waste;at the same time, lower taxes on labour, knowledge and innovation would help cleaner industry and investment.

In our report, we highlight three key circular strategies and give practical examples. First, we must optimise the utility of products by maximising their use and extending their lifetime. Ridesharing and carsharing already make it less important to own a car.

Autonomous driving will accelerate this trend, potentially increasing the usage of each vehicle by a factor of eight. At the same time electric powertrains, intelligent maintenance programmes and software integration can extend lifetimes of cars.

Secondly, we must enhance recycling by using waste as a resource. By 2050 there will be an estimated 78 million tonnes of decommissioned solar panels.

Modular design would enable products to be disassembled, components to be re-used and valuable materials to be recovered to extend their economic value and reduce waste.

Finally, we could reduce material consumption, use lower-carbon alternatives and incorporate circular design methods. Bamboo, wood and other natural materials have the potential to reduce dependence on carbon-intensive alternatives such as cement and metals in construction.

Instead of emitting carbon, these materials store it and will last for decades. They can be burnt to generate energy at the end of their life.

New metrics

The Report introduces new metrics and data analysis to identify the best prospects for impactful change. We found that circular strategies to reduce waste are particularly important in the built environment, which accounts for a fifth of all global emissions. 

Our calculations show that nearly half of all new materials going into the world economy – 42.4 billion tonnes a year – are for the construction and maintenance of houses, offices, roads and infrastructure.

Another example is Capital Equipment. This broad spectrum of products, from cars to medical scanners and solar panels, consumes half of all metals. Advances in digital technologies and innovations in smart design, however, are already creating new circular business models.

The opportunities for investment in these new markets is real. The opportunity is greater, where shared understanding of circularity metrics brings more transparency to decision-making.

Global development

Moving society away from the Take-Make-Waste pattern of consumption, ingrained in our linear economy, requires a paradigm shift. The circular model serves to separate things we do want from our economic system, from those we do not want.

For example, we want fairer distribution of prosperity and a bright future for the next generations. We do not want to squander scarce natural resources, nor to suffer adverse effects on our environment and society.

Ultimately, a circular economy is a practical strategy to decouple economic growth from unsustainable resource extraction and emissions. It aims to bring prosperity, whilst intelligently managing resources within the boundaries of our planet.

Circular thinking is compatible – in fact, dependent – on policies that foster social equity and mitigate climate breakdown.  A 1.5-degree world can only be circular: the time to close the Circularity Gap is now.

This Author 

Harald Friedl is chief executive of Circle Economy. Before joining Circle Economy in 2017, Harald spent five years in Myanmar, during which he co-founded Impact Hub Myanmar; led national market development of electro-mechanical hydropower projects in the country; and co-founded Myanmar’s first pre-incubation programme for social enterprises.