How the Circular Economy Can Help Nations Achieve Their Climate Goals
Editor's Note: Carolina Schmidt is the Minister of Environment for Chile and a board member for the Platform for Accelerating the Circular Economy (PACE).
The latest IPCC report is frighteningly clear: without urgent action, the world could lose entire countries to climate change due to rising sea levels, deadly flooding and widespread fires from extreme temperatures. The world is already moving in this direction, as severe floods and fires are happening more frequently with a current average warming of just 1.1 degrees C. If countries achieve their pre COP26 climate plans, known as nationally determined contributions (NDCs), warming will only be limited to 2.4 degrees C by 2100. This is well past the 1.5 degrees C threshold necessary to avoid the worst impacts of climate change.
At the same time, the world needs enough resources to provide for 10 billion people by 2050. Current resource consumption patterns will not sustainably provide these resources and will substantially increase emissions. A fundamental shift in the global approach to climate change is necessary to reduce greenhouse gas emissions, stay on a 1.5 degrees C pathway in line with the Paris Agreement and support the world’s population. The world faces a critical opportunity to enable this shift, as the global community can make climate commitments and offer systemic strategies which tackle all emission sources.
While a renewable energy transition is important to these goals, it is only part of the story. Adopting a circular economy — which keeps products and materials in use for as long as possible and designs avenues for waste and pollution — across all sectors and value chains will be crucial to painting a complete picture of a resilient, net-zero world. Nations must commit to develop policies that seize the full potential of a circular economy through using fewer resources, using and reusing products for as long as possible, reusing materials and opting for low carbon alternatives. Doing so will improve sustainable practices and enable countries to achieve their climate goals faster.
Unlocking Circular Economy's Potential to Tackle Climate Change
Nearly half the emissions that cause climate change come from the production and use of everyday items, from cars to clothes to food and much more. This excludes the emissions from freight transport and energy use in non-residential buildings — when including these materials, the number rises to 70% of global emissions.
As the population and consumerism increases, so does the demand for materials. Emissions are likely to grow fast without changes to current production and consumption. For steel, cement, aluminium and plastics, emissions are predicted to rise by a factor of two to four by 2050. Emissions arising from producing these materials — which are integral to the economy — are particularly hard to abate due to energy-intensive processes that cannot currently be catered to by clean energy sources. At the same time, global food demand is set to rise by 42%. Under current practices in the food sector, the emissions necessary to meet this demand alone will greatly exceed the global carbon budget.
Currently, the global economy is only 8.6% circular, leaving a massive circularity gap. By doubling global circularity in the next 10 years, global greenhouse gas emissions could be reduced by 39% and shrink the total material footprint by 28% by 2032, compared to current levels.
The benefits of a circular economy are becoming increasingly recognized: one-third of NDCs updated and submitted this year, largely across Europe and some other G20 countries, include mention of a circular economy. Despite this, many NDCs, and other solutions to climate change, insufficiently reduce emissions. Two-thirds of all countries (127 of 197) who signed the Paris Agreement have not yet included the circular economy in their climate commitments.
Understanding strategies to reduce emissions directly linked to the way materials are extracted, produced and consumed will allow nations to broaden their climate pledges. According to the Circularity Gap Report 2021, adopting various circular strategies could reduce projected warming from 3.2 degrees C — as was projected before the latest round of NDCs was adopted — to 1.8 degrees C.
How Can the Circular Economy be Integrated into NDCs?
The pathways to use circular strategies to mitigate climate change may not be clear for all nations. Countries can begin by looking at nations who have already incorporated the circular economy into their NDCs, such as the European Union, the Netherlands, Finland and Chile.
In April 2020, Chile became one of the first countries to introduce a circular economy into their climate targets. They began this process by identifying the economic opportunities of a circular economy. For instance, roughly 7.1 million tons of construction waste is dumped in the nation’s landfills every year, but reusing these materials in buildings could save the nation $315 million annually. This could also lead to carbon savings, as the nation will not need to produce as many new materials.
Building from these opportunities, Chile integrated the circular economy into their NDC in three ways:
- They created a Circular Economy Roadmap that identifies potential emission savings from transitioning to a circular economy. This roadmap explores short-, medium- and long-term measures to reach 2040 goals.
- They are developing a National Organic Waste Strategy to address the high proportion of emissions that come from food, aimed at increasing the recovery and carbon savings for organic waste.
- They will establish and implement metrics and indicators on circularity by 2022 to monitor progress toward a circular economy and identify its contribution to climate change mitigation and adaptation.
These integration methods create a clear path toward achieving climate goals with a circular economy. For example, Chile’s updated NDC outlines new policies that hold manufacturers responsible for waste, encourages circular innovation projects and creates jobs in recycling markets. This will allow the nation to fully seize the opportunities they identified.
Chile’s work goes beyond their NDC. In October 2021, the nation presented its long-term climate strategy, which also highlights circularity as a critical lever for the country’s mitigation goals. The strategy also outlines ways that a circular economy can foster adaptation: it explores how organic waste can be processed to create compost, which can then be used to recover soils undergoing rapid desertification and make them more resilient.
This example provides a basis for how other nations can incorporate a circular economy into their climate goals. Every nation’s climate plans should include a dedicated section on the circular economy and measurable, actionable short- and long-term targets. If all nations took these steps, they would be able to reduce nearly half of the global emissions from the production of goods and food.
The Action Needed
The current response to the global climate emergency paints an incomplete picture, where an important aspect is often missing or underplayed. More countries need to meet the urgency of the climate crisis and update their climate plans to reflect the enormous contribution that the circular economy can make.
Countries that consume a vast volume of resources and produce large amounts of waste and emissions, such as the G20 group, must take greater responsibility for their impact and incorporate stronger circular targets and strategies into their climate commitments. Public-private partnerships — particularly those in which governments support businesses that adopt circular strategies, and those fostered through the Platform for Accelerating the Circular Economy — will also be critical in bridging the gap between policymakers and those responsible for making and producing materials.
By accelerating the transition to a circular economy, countries can complete the picture of a net-zero, sustainable future and prevent catastrophic climate change impacts.