Circular economy able to add significantly to global climate targets

18 July 2016 7 min. read
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The world is waking up to the need to rapidly transform towards a low carbon economy, or face, according to the scientific community, an uncertain and potentially disastrous future. Agreements have been made regarding limiting warming to below 2.0°C above pre-industrial levels. Getting there is, however, a thorny challenge. One way forward is the transformation of the world economy to one based on circular economic principals, in which waste is reduced in favour of sustainability.

At the COP21 conference a key global agreement was laid down by 195 countries to reduce their waste emissions to limit global average temperature rise to well below 2.0°C above pre-industrial levels, and to pursue efforts to keep it under 1.5°C. How to get there remains relatively difficult, however, with intransigent business interests, human ignorance and technology gaps (due in part to a lack of innovation), among others, holding the world back from a carbon free long-term stability.

In a recently released white paper, titled ‘Implementing Circular Economy Globally Makes Paris Targets Achievable’, from Ecofys and Amsterdam based social enterprise Circle Economy, the current situation regarding the pathways towards humanities climate future are laid bare, as well as one possible strategy for creating a path towards a more sustainable world, the circular economy.

Current situation and future trends

Towards 1.5°C
As it stands, without government intervention, humanity is on a trajectory towards dangerous climate change. The irreversible experiment, of continuing to pump large amounts of waste into the atmosphere is, by the scientific community, met with considerable concern for the sake of long-term social stability as well as wider environmental effects, including a mass loss of biodiversity. The business as usual case, sees warming of more than 4.0 °C above pre-industrial levels.

Government intervention, through commitments made so far, is projected to see climate warming limited to around 3.0°C – still well above the COP21 target and within the range of dangerous climate changes affecting human and ecological wellbeing and prosperity in the long-term. The assumption, following the COP21 pledge, is that governments will continue to develop a regulatory environment that pushes industry and citizens towards creating technologies, practices and behaviours that are sustainable – thereby reaching the 2.0°C limit.

One method for creating long term sustainability, as well as bridging the gap between 3.0°C and 1.5°C, is, according to the report, a circular economy. The authors find that current economic model is in many ways highly inefficient. The economic model, for the most part, takes resources, uses them once for some utility, then that utility produces something that is at the least useless and in many instances harmful. This model, sometimes termed ‘from the cradle to the grave’ is in many ways, extremely unsustainable – resources are finite, their exploitation cannot occur indefinitely and the waste, externality, is often not factored into the price of production or use.

In a circular economy the whole cycle of resources and their utility are considered. The aim of a circular economy is to create value chains in which products are produced and used in such a way as to reduce, in so far as is practical, the waste produced in its production and their utilisation. A number of concepts are related to circular economy, including:

Recovery and Reuse: products are designed in a way that makes the resources recoverable and reusable for other uses.

Extending the lifetime of products and assets: durability becomes mainstream, products are designed to provide their function for a long time – while users are trained to maintain them. Additionally, products are also designed to allow for upgrade, and repair, as well as reverse logistics, product take-back, and remanufacturing.

Sharing and Service Models: focus on increasing the utilisation of products, particularly for items, such as cars, which have high externalities but very low levels of utilisation (<95%).

Circular Design: focus on designing products with durability, low resource impact and sustainability in mind.

Digital platforms: focus on reducing the need to resource based services towards more efficient digital services.

Emission Breakdown

The report also considers the different sectors in the economy that are particularly open to becoming circular, finding that across the major economic sectors that produce waste emissions, as well as other forms of sometimes toxic waste, 50% of all emissions are the result of materials. The introduction of circular economic principals are, according the analysis of the report, able to drive reductions in emissions from their utilisation by between 20% - 30%, representing 11-13 billion tonnes CO2e by 2030, producing a significant step forward towards the 1.5 °C pathway of 15 billion tonnes CO2e reduction in the same time frame.

The firms suggest that getting there will require policy makers, as well as industry in general, to create frameworks which encourage improved efficient uses of resources. This may mean that policies are put in place to reduce food waste, both at the consumer level as well as the wider value chain that may encourage poor food use – or that businesses start creating more durable, repairable and good quality goods. Much like the wider move toward sustainability, efforts will require multi-stakeholder engagement in which, while in the short term there will be winners and losers, in the long-term there will be heritage.

Andy Ridley, CEO of Circle Economy, says, “The research clearly shows that there is a massive role for the circular economy. Not only as the ‘missing part of the puzzle’ to make our Paris targets achievable, but also as a practical and scalable approach to decouple unsustainable material use from prosperity. This makes the circular economy a vital addition to the mix of solutions to address climate change. We urge companies and governments to embed the circular economy in their climate strategies and policies, and prompt the next wave of climate action through circularity.”

“The momentum from a circular economy can provide a basis for the transition to a low carbon economy with secure sustainable economic growth and prosperity for all. To reduce the risk, companies need to find new ways of doing business. The sooner this is accomplished, the less disruptive and more cost-effective the transition will be,” adds Preeti Srivastav, Project Director of Corporate Climate Action at Ecofys.

The benefits of circular
According to a study conducted by McKinsey & Company last year, a transformation to a circular economy has the potential to increase European GDP by 7% and disposable income by 11% by 2030 through a reduction of raw material costs. Another study, by Accenture, found that, globally, the consumer advantage of circular economy adoption could reach $4.5 trillion by 2030.