Enabling true sustainability with a Circular Economy
The ratified Paris Agreement of COP21 marked a turning point with unprecedented pledges from world leaders to reach ambitious climate change goals. The focus at COP 22 in Morocco was and over the next few years will be on critical and immediate action. To achieve these ambitious climate goals, we need innovative models and technologies that can move us from “incremental change” to “leapfrogging” towards our targets.
One of the models that is gaining traction is the circular economy. The concept is still under design and discussion, but the potential of its impact is becoming increasingly clear and scalable. Circular economy can be defined as a business model that contributes to an economy that is regenerative by design and is as waste free as possible.
For many countries and cities, the circular economy is a welcome new concept to trigger GDP growth, job creation and to foster new technological innovations – all with a positive side-effect of curbing greenhouse gases (GHGs). Cities like Amsterdam have embraced the concept of a circular economy to foster entrepreneurs, to boost SMEs and to engage with residents and communities to design an efficient and low carbon footprint city.
The economic benefits of the model are also quite tangible. It is predicted that with the adoption of a circular economy in Europe, its resource productivity will grow by up to 3 percent annually, and primary resources will benefit €0.6 trillion per year by 2030. A circular economy model would generate €1.2 trillion in non-resource and external benefits, bringing the annual total benefits to around €1.8 trillion versus today with a GDP increase of as much as 7 percentage points relative to the current situation. According to the European Commission’s impact assessment for waste targets, simplified legislation around a circular economy, improved monitoring and dissemination of best practices could create more than 180,000 new jobs by 2030 (European Commission 2014).
Source: Implementing circular economy globally makes Paris targets achievable, Circle Economy, Ecofys, 2016
For the energy sector, a circular economy model brings us closer to a sustainable energy future in several ways: it shifts systems towards the wide use of renewable energy; shifts the economic balance away from energy-intensive materials and primary extraction; encourages an overall reduction of energy demand as reuse of materials saves significantly more energy than disposal or even recycling; and ultimately encourages reduced material inputs and associated labour and energy costs as well as reduced carbon emissions along the entire supply chain.
While the role of circular economy is being increasingly recognized, the implementation of a circular economy model by businesses lacks consistency and clarity. At face value, a circular economy can come across as a theoretical concept that still needs concrete definition. Ironically, many companies are already implementing principles of a circular economy in their existing practices but have not given it an “official” definition. In a world of growing material scarcity and unrest, companies are looking at a circular economy model to ensure the security of their supply chain, to become more energy, material and waste efficient, and to improve engagement with end-consumers through end-of-life touch points. Leading companies across various regions and sectors have already started reaping the benefits of adopting the circular economy model. Known brands like Apple, H&M, Unilever, Ikea, DSM and many others are some of the front runners but this is just the tip of the iceberg. More than 50 leading companies have joined Ellen Mac Arthur’s Circular Economy campaign CE100 and many more large scale companies and SME’s have started showcasing their impact, case studies and success stories through various channels and forums.
To build a more consistent and comprehensive circular economy model, we need a clear and comprehensive narrative with success stories, supportive research, business cases, case studies and conducive policies. Initiatives and partnerships amongst the public and private sector and active engagement with citizens and consumers are needed to take the circular economy forward and create a new reality of growth.
 Implementing circular economy globally makes Paris targets achievable, Circle Economy, Ecofys, 2016