23 January 2019: ‘The Circularity Gap Report 2019’ by Circle Economy, a self-described “impact organization,” highlights the relationship between climate change and material use, warning that greenhouse gas (GHG) emissions and resource extraction have continued to increase. The report urges a paradigm shift towards the circular economy to tackle climate change.

The second annual report cautions that the world is “headed in the wrong direction” and the circularity gap is not closing. Of the 92.8 billion tonnes of biomass, fossil fuels, metals and minerals that enter the global economy annually, only nine percent are re-used. The report calculates that 62 percent of global GHG emissions, excluding those from land use and forestry, are released during extraction, processing and manufacturing of goods compared to 38 percent of GHG emissions from the delivery and use of products and services. Despite these figures, global use of materials continues to accelerate and could double by 2050 without action.

The report highlights how applying circular principles of “re-use, re-cycling and re-manufacturing” to key sectors can play a critical role in reducing GHG emissions. It argues that governments focus on avoided deforestation, energy efficiency and renewable energy in their climate change strategies but overlook the circular economy. The report recommends that governments maximize their use of existing assets, minimize waste and reduce dependence on new raw materials. Additional recommendations focus on abolishing financial incentives that encourage overuse of natural resources, raising taxes on emissions, waste production and excessive resource extraction, and lowering taxes on knowledge, innovation and labor.

A 1.5 degree world can only be a circular world.

Circle Economy CEO, Harald Fiedl, emphasized that “a 1.5 degree world can only be a circular world,” and underlined the potential of greater resource efficiency, circular business models and recycling to reduce emissions. Fiedl said a systematic approach to these strategies “would tip the balance in the battle against global warming.” He recommended re-engineering supply chains “all the way back to the wells, fields, mines and quarries where our resources originate so that we consume fewer raw materials,” arguing that such an approach would make economies more efficient, boost growth and reduce emissions.

To address emissions and waste in the built environment, the report recommends that governments in emerging economies adopt building practices that minimize the use of raw materials to decrease their emissions. In China, for instance, the built economy is predicted to increase from 239 to 562 billion tonnes of material by 2050. Currently, China’s recycled or reused construction inputs make up only two percent of the total. A shift to a circular economy could make “a huge impact on emissions.” In developed economies with slower growth in the built economy, the report recommends that countries maximize the value of existing buildings by improving their energy efficiency and extending their lifespan, among other recommendations.

The report proposes three circular strategies: optimizing the utility of products by maximizing their use and extending their lifetime; enhancing recycling, using waste as a resource; and promoting circular design that reduces material consumption and uses lower-carbon alternatives. For each of these strategies, the report showcases examples of how they can be adopted and adapted. The report further encourages the development of decision metrics and measurement frameworks to encourage goal-setting towards the circular economy, evaluations and peer review as well as to track progress towards the Paris Agreement on climate change and the SDGs.

Circle Economy launched the second annual Circularity Gap Report during the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland. The report was published as part of the Platform for Accelerating the Circular Economy (PACE), a public-private collaboration mechanism and project accelerator seeking to bring about the circular economy “at speed and scale.” Co-chaired by the heads of Royal Philips, the Global Environment Facility (GEF) and the UN Environment Programme (UNEP), PACE brings together a coalition of more than 50 leaders, and is hosted by the WEF. [Publication: The Circularity Gap Report 2019] [Report Website] [Circle Economy Press Release]