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Regional CGR

The first-of-its-kind analysis for Latin America and the Caribbean

Rampant material extraction is pushing the ecosystems of Latin America and the Caribbean (LAC) to their limits. Over 11% of global raw materials are extracted within the region, yet it represents only about 8% of the world's population.

Raw material extraction and export are essential for local economies. But the nature and scale of extractive activities destabilise the region’s welfare in the long run, eroding the natural systems that local communities have relied on for centuries. Moreover, despite being extremely resource-rich, LAC suffers some of the worst wealth inequality in the world.

The Circularity Gap Report (CGR) Latin America and the Caribbean demonstrates how the region can leverage the circular economy to tackle systemic inefficiencies in satisfying societal needs, conserve its unique natural wealth and improve its people’s well-being.
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Latin America and the Caribbean are global hotspots of material extraction

In LAC countries, an average of 12.4 tonnes of materials are consumed per person per year. This is largely on par with the global average of 12.2 tonnes but still exceeds the estimated ‘sustainable’ material consumption level of  8 tonnes per person per year.
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Around 40% of extracted materials are exported to meet global demand, mainly biomass and metal ores, while local ecosystems and populations bear the brunt of nature’s overexploitation—from deforestation and climate change to social conflict and extreme poverty.


A circular economy could bolster the region's defence against climate change

While the region presents a moderate carbon footprint, agriculture and forestry are the greatest contributors to the region’s greenhouse gas (GHG) emissions, with figures topping global rates. Although 30% of LAC’s emissions are linked to exports and thus driven by demand abroad, the region still wields the power to cut its carbon footprint by one-third—and going circular can get it there. Transitioning to the circular economy would also mean enhanced climate adaptation, such as more resilient food systems.
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As LAC continues to develop economically in the coming years, the sustainable use of renewable natural resources will be a top priority if the region is to become more circular.

The economy of Latin
America and the Caribbean is linear

The region is overwhelmingly reliant on raw, or virgin, materials, cycling back into use a tiny fraction of what’s been taken from its abundant nature. On the other hand, LAC’s economies are largely self-sufficient, importing just 20% of the raw materials they use.
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Local policymakers lack data to make informed decisions

The CGR Latin America and the Caribbean uncovered significant data gaps, making it difficult to determine an accurate Circularity Metric. For example, the report estimates that approximately two-thirds of total waste generated, mostly from heavy waste streams such as demolition and industrial waste, escape official statistics. Therefore, LAC's Circularity Metric of less than 1% must be considered with caution. However, it does highlight the critical need to improve local data collection and subsequently monitor and evaluate progress in advancing circularity.
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Explore the methodology behind our work

Five pathways to bridge
Latin America and the Caribbean’s Circularity Gap

To devise pathways for a circular transition, the report analysed the sectors where circular interventions could yield the most positive impact—environmentally, economically and socially.
Shift to a circular food system
Material footprint reduced by 34%.
Carbon footprint reduced by 34%.
Revamping biomass management is critical for the region to advance circularity in the food system. To achieve a circular food system, Latin America and the Caribbean could promote regenerative agriculture practices, such as agroforestry, permaculture and integrated livestock management, while promoting more balanced diets. Reducing and valorising food loss and waste is also key to growing circularity and unlocking new, high-value economic opportunities.
Case study:
Digital solutions can reduce food loss and waste
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Build a circular built environment
Owing to the region’s high levels of urbanisation, informal settlements and the significant amount of stock build-up, shaping a more circular built environment is key to ensuring a more resource-efficient future. A circular built environment could be created by (re)cycling demolition waste and prioritising renovations over new construction. More circular construction methods and practices, such as off-site construction, prefabrication and adopting local and sustainable materials, could also deliver sizable benefits. Increasing the energy efficiency of existing buildings, coupled with the large-scale deployment of low-carbon technologies such as photovoltaics, green roofs and heat pumps, also holds major potential.
Case study:
Housing partnerships boosting resource and energy efficiency
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Advance circular manufacturing
Material footprint reduced by 32%.
Carbon footprint reduced by 31%.
The region’s manufacturing sector is important and holds great potential to advance circularity. Advancing circular manufacturing in LAC would mean improving processes and employing modern technologies to increase resource efficiency and cut and valorise industrial waste to get more with less. Moving towards circular business models, particularly at the interindustrial level, such as leasing, remanufacturing, refurbishing and repairing products like machinery and equipment instead of selling them, also holds major untapped potential for the sector.
Case study:
Producing from scrap
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Transform the energy system
While the region is a global frontrunner when it comes to renewable energy, there is an untapped opportunity to explore the region’s abundant renewable resources to reduce the use of fossil fuels, which still dominate the energy mix. If designed well, increasing efficiency and reducing the amount of wasted energy while scaling renewable energy—particularly solar and wind, for electrifying households, transport and industries—hold major opportunities to decarbonise the region’s energy system and improve social outcomes.
Case study:
Uruguay’s Renewable Energy Innovation Fund (REIF)
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Reduce waste generation and improve waste cycling
Circularity Metric
is increased from
1% to 6%
While data on waste is limited, it is evident that LAC countries are grappling with the rapid increase in waste generation stemming from population growth, urbanisation and linear consumption patterns. Currently, around two-thirds of all waste goes unaccounted for and, therefore, can’t be tackled. As a first crucial step toward monitoring and capping growing waste streams, LAC needs to collect more data on waste. Expanding and revamping waste infrastructure, introducing stricter regulations and empowering informal waste collectors will be key to minimising waste generation, increasing secondary material consumption and conserving resources while fostering more sustainable economic activities.
Case study:
A recycling cooperative
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Maximising social well-being in balance with nature

By tackling how materials are used to satisfy societal needs, countries across LAC can ease environmental pressures, bolster the quality of life of their societies and unlock new economic opportunities.

Implementing circular economy strategies in just two sectors—Agrifood and Manufacturing—can cut LAC's material and carbon footprints by one-third each. Revamping waste management could bring the Circularity Metric from below 1% up to 6%. What’s more, the transition could create up to 8.8 million new formal jobs.

Transforming Latin America and the Caribbean’s economy with and for people

If approached well, the circular transition can catalyse social and economic change. The analysis estimates that 8.8 million new formal jobs could be created by driving the region’s circular transition in four key sectors: Agrifood, the Built environment, Mobility and Waste management.

The region has the opportunity to shape the transition justly, ensuring that these new jobs are safe for workers and improve their livelihoods. As such, circular interventions must address technical and soft skills gaps while safeguarding the rights of informal workers already engaged in circular economy activities.

The circular economy can also help LAC add value, diversify its economic structure, and shape a better balance between exports and imports. Moreover, it can deliver cost savings and help gear production towards more technology-intensive sectors.


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