Revisiting the Need for a Circular Economy

Circular Economy
February 11, 2020

In July 2019, I wrote a post, “The Circle of Life: A Look at the Circular Economy”, which highlighted what a Circular Economy was and potentially what it would look like from a business point of view.

In the most recent Ellen MacArthur Foundation paper, “Completing the Picture: How the Circular Economy Tackles Climate Change”, the authors argue that it is no longer a question of if, but when, a circular economy must preempt our current linear product cycle. And the sooner the better.

The present emphasis on renewable energy sources, complemented by energy efficiency — albeit necessary and important — “can only address 55% of emissions” of the now familiar 2050 Paris Agreement goal of zero emissions.

How do we eliminate the remaining 45%? By targeting consumers and producing the cars, clothes, food, and other products we use every day with zero carbon emission.

This is both a production of goods and a land management issue. In a recent report published by the International Resource Panel (IRP), researchers found that two sectors, Industry and Agriculture, Forestry, and Other Land Use (AFOLU) each contribute around a quarter of global GHG emissions.

“Materials such as steel, cement, aluminum, and plastics make up almost 20% of carbon emissions. And demand for such materials increase rapidly. Moreover, every time we put a plough in the land carbon is released,” says Anders Wijkman, Chair Climate-KIC, Honorary President, The Club of Rome.

While the target of 1.5 degrees Celsius by 2050 is familiar, what may not be as well know is the projected costs to the global economy due to climate change. Authors of the report cite that costs will “reach USD 54 trillion by 2100 and rise steeply with every further temperature increase.”

“The good thing is there are solutions,” says Wijkman.

Enter the Circular Economy Model

The circular economy is based on three principles:

  • Design out waste and pollution
  • Keep products and materials in use
  • Regenerate natural systems.

It also distinguishes between biological and technical systems.

For example, food, plant, and tree products can be fed back into the system through composting and anaerobic digestion. These processes regenerate living systems (e.g. soil), which in turn provide renewable resources for the economy.

Technical cycles, on the other hand, recover and restore products, components, and materials through strategies such as reuse, repair, remanufacture, or recycle.

According to the report, “Digital technology has the power to support the transition to a circular economy by radically increasing virtualization, dematerialization, transparency, and feedback-driven intelligence.”

Buildings: An Example of a Circular Scenario

“The built environment uses almost half of the world’s materials extracted every year and current projections estimate that by 2060, across the world, the equivalent of the city of Paris will be built each week,” write the authors.

In keeping with the three-prong circular model, in order to design out waste and pollution, builders could use less raw materials, higher strength materials, and improved designs. The authors of the report suggest that “it is often possible to achieve the same structural strength using only 50–60% of the amount of cement that is currently being used.”

To keep products and materials in use, buildings should be repurposed and multi-purposed rather than left vacant.

And to regenerate natural systems, there would have to be an emphasis on recycling building materials, particularly concrete and plastics through designing recyclable materials, upscaling recycling volumes, and improving the quality of secondary materials.

This is one example of how a circular model might be used to reduce emissions. The report also covers transportation and the food industry.

Resilience to Climate Change

In my most recent post, I spoke about the need for companies to build up their resilience to climate change in order to stay viable in the future.

A circular economy helps companies to do just that by offering a range of possibilities to distribute risk across supply chains, thus increasing their flexibility and resilience to climate risks such as extreme weather.

However, there is much research needed to properly assess the best way to distribute risk as each geological area is vulnerable to its own unique set of climate change related weather patterns.

Calling All to the Table

This is not a finger pointing — “you have to do this in your company” — type of report. Instead, this focuses on the role everyone in society needs to play in order to make a greener world a reality.

Policy makers, investors, academia, consumers, businesses, international institutions — no one is exempt.

A circular economy strategy needs to be on the table when discussing solutions to climate change. Otherwise, no one succeeds.


Laurie Toupin