The benefits of a circular economy for effective climate action and society

A joint article from UNEP International Resource Panel and Systemiq (authors: Janez Potočnik, IRP Co-Chair and Julia Okatz, Associate, Systemiq) – The IRP is co-host of the WCEF+Climate session: Why do Materials Matter for Global Climate Action?

Infographic showing that the production of materials causes 23% of global GHG emissions

The circular economy has long been defined as a system in which the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste is minimised. It is now time to ‘step up’ the circular economy to become a true instrument for decoupling wellbeing from natural resources use. The circular economy for decoupling implies the systemic change that goes beyond waste management but covers the whole lifecycle of products, and the design of provisioning systems such as housing or mobility systems. The benefits of such change to circularity could be 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.

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 decarbonise 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 houses and vehicles. Much of today’s housing space is underutilised, and car utilisation is even worse. These systems are meeting societal needs terribly inefficiently, using way too many resources for often not even a great functionality. 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 also need to become cleaner, using renewable energy and alternative (more sustainable) materials.

In addition to 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 dematerialisation 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. We need to bring those in charge of the impacts, together with those in charge of resource use, to effectively develop a joint vision and targets.

The World Circular Economy Forum + Climate is a crucial step to bringing together business leaders, policymakers and experts – those who have direct influence on the resource drivers – so they can co-create solutions on the ground and shape the process towards more sustainable resources management.

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.

Infographic showing the top 4 of material efficiency strategies to reduce GHG emissions from homes in G7 countries and the top 3 of material efficiency strategies to reduce GHG emissions from cars in G7 countries