Our world is only 9% circular and the trend is negative
The circularity gap is not closing. In 12 months since the launch of the first Circularity Gap Report, the upward trend in resource extraction and greenhouse gas emissions has continued and key indicators confirm that the problems of a linear economy are 'baked in' to the global economy and we are heading in the wrong direction.
On 22 January 2019, Circle Economy launches the second annual Circularity Gap Report in Davos during the World Economic Forum Annual Meeting. In the report, Circle Economy positions the circular economy as a tool for the paradigm shift we so desperately need. It offers the prospect of a global economy which is regenerative and abundant.
The built environment consumes almost 50% of all global materials annually and generates around 20% of emissions.
Different regions and economic landscapes require different strategies to implement circularity in the built environment.
China The majority of the houses that people in China will inhabit and the roads they will travel in the next 10 to 50 years are yet to be built. This means that the opportunity is now to build in a circular way. Design for the future makes sure we avoid locking-in linearity and the toxins of tomorrow, today.
Europe The built environment landscape in regions like Europe are very different. They are faced with an ageing demographic, plus a mature and in cases outdated housing stock. Around 4 outof every 10 houses in Europe were built before 1960, a time when building practices were poor by today’s standards. The priority is to sustain and preserve what is already made in this case the current building stock and boost its performance from the perspective of material reuse and energy efficiency.
Climate change and material use are closely linked. 62% of global greenhouse gas emissions (excluding those from land use and forestry) are released during the extraction, processing and manufacturing of goods. Yet global use of materials is accelerating. It has more than tripled since 1970 and could double again by 2050 without action, according to the UN International Resource Panel.
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A 1.5°C world can only be circular
The figure shows where within the global economy greenhouse gases are emitted in satisfying 7 societal needs. In 2017, total greenhouse gas emissions amounted to 50.9 billion tonnes of carbon dioxide, excluding emissions from land use, land-use change and forestry. Approximately 62% of emissions are released during the extraction (Take), processing (Process) and production (Produce) phases, generating 12.5, 10 and 9.3 Gt CO2e.
High value machinery consumes more than 50% of all metals and account for 13% of global value creation.
Capital equipment encompasses a broad group of products from medical scanners, solar panels and cars, to industrial printers and elevators. These are high value products that have a relatively long product life span and often are the 'growth motor' for their industry. Therefore, this category offers tremendous potential to shift industrial processes and foster circular disruption.
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The visual shows the potential of three circular strategies to increase value for specific products that are illustrative for the breadth of Capital Equipment.
Materials, financial value and emissions are closely interlinked in the global economy.
Over the last four decades, the global use of materials almost tripled, from 26.7 billion tonnes in 1970, to 92.1 billion tonnes in 2017.
Not only has material use been increasing, it has been accelerating, and is forecast to grow to between 170 and 184 billion tonnes by 2050. The measure of success, however, will not be throughput-oriented, monetary GDP, alone.
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To implement the circular economy we need to assess the global economy through the lens of mass: material throughput, value: financial value creation and carbon: climate emissions. Circle Economy introduces a new measurement framework that extends beyond material use to include financial value creation and extraction, plus greenhouse gas emissions - the Mass-Value-Carbon nexus. This metric enable us to truly see the full picture behind meeting key societal needs, such as housing, mobility and nutrition.
4 STEPS TO TAKE ACTION IN BRIDGING THE CIRCULARITY GAP THROUGH LEADERSHIP AND ACTION
1. Translate global trends into national, regional and commercial pathways
This will enable nation-states, regions, cities, industries and business to formulate practical strategies that are aligned to local context, incentives, markets and mandates.
2. Develop decision metrics and a measurement framework
This will encourage goal-setting, evaluations and peer review, which will, in turn, serve to benchmark performance and track progress against longer-term global ambitions such as the Paris targets and the SDGs.
3. Facilitate peer-to-peer learning and knowledge transfe
This will accelerate the international dissemination of effective circular economy policies and practices, fostering a collaborative ethos that helps to grow understanding and accelerate uptake.
4. Build a global coalition for action that is both diverse and inclusive
This will bring together front-running businesses, governments, NGOs and academics to collectively boost capacity and capability, so serving societal needs better and more sustainably.
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The promise of the circular economy is to live in harmony with nature again. It is also essential for resolving our climate crisis and start living within our planetary boundaries. But how do we get started? This report is a wake up call and shows that with 9% circularity we are still scratching the surface. After reading the report ask yourself: What can you do to help save the planet?
– Martijn Lopes Cardozo, CEO at Black Bear
In a global economy of 7.5 billion people, a number of markets, jurisdictions and complex value chains coexist. Environmental solutions cannot be engineered top-down or through multilateral negotiations alone. Rebalancing national incentives – and orchestrating those across jurisdictions - is essential for value chains to develop circular patterns of trade. This can help the international community in the pursuit of the SDGs, as well as in the implementation of the Paris Agreement.
– Pamela Coke-Hamilton, Director Trade and Commodities at UNCTAD
The global sustainability crisis has four dimensions: the climate crisis, the biodiversity crisis, the crisis of overuse of natural resources and the crisis of social inequality. It is time for us to face the culprit of this crisis: our current consumption pattern. We simply cannot continue our current way of consuming in a world that is only 9.1 % circular.
– Dr. Mari Pantsar, Director carbon-neutral circular economy at Finnish Innovation Fund SITRA
The Circularity Gap Reporting Initiative is an initiative of Circle Economy Foundation, an impact organisation dedicated to accelerating the transition to the circular economy. www.circle-economy.com