Circular economy in the limelight in Davos

Britain's sailor and Founder of Ellen MacArthur Foundation Ellen MacArthur speaks during a panel session on the last day of the 44th Annual Meeting of the World Economic Forum in Davos, in 2014. [Laurent Gillieron]

The first Circularity Gap Report indicates that merely 9% of the world’s exploited natural resources are re-used.  EURACTIV’s partner La Tribune reports

The report states that of the 92.8 billion tonnes of exploited resources in 2015 (which equates to 34.4kg of raw materials per person per day, excluding water), only 8.4 billion tonnes was recycled. This equates to just 9.1% of all resources. The Dutch think-tank Circle Economy made the most of the annual meeting of world leaders at the World Economic Forum in Davos to publish its first report on the circular economy, titled the Circularity Gap Report.

If 21.5 billion tonnes of raw material are put into long-term stock, notably in construction, the remaining 51.9 billion tonnes are transformed into short-lived products and are assumed to be scattered in the environment. Of the 19.4 billion tonnes of materials turned into waste only 46% is recycled, according to the report, whose main objective is to develop a method and indicative references to measure the world economy’s progress towards a more circular economic model.

Pressure on natural resources decreased by 28%

This waste completely goes against the environmental commitments discussed by governments and corporation at the COP21. The extraction of natural resources multiplied by twelve between 1900 and 2015 and should double once again by 2050. But a fully circular economy would decrease pressure on natural resources by 28%, the report calculated.

Indeed, 67% of greenhouse gases are emitted by the exploitation of natural resources. A fully circular economy would enable us to cut these emissions by 72%, according to the report. A crucial contribution if you take into account the UN’s last Emissions Gap Report published in October, which served as a reference to the Circularity Gap Report.

According to the UN report, even if all participating states of the Paris Agreement were to keep to their commitments, the global temperature would most likely rise by 3-3,2°C before 2100. Therefore the agreement’s goal of keeping the global temperature rising above 2°C would not be reached. On 22 January France’s Environment Minister Nicholas Hulot revealed that France had failed to meet its 2016 carbon emission targets by 3.6%.


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A Positive Impact

The 84.4 billion tonnes of natural resources extracted from the environment contribute to our social needs. According to the Circularity Gap Report it is split as follows: 42.4 billion tonnes of raw natural resources for housing and infrastructure, 21.8 for nutrition, 12 for mobility (particularly building and powering transport technologies), 9.1 for consumables (electrical appliances, mobile phones, clothes and others), 4.4 for services (such as public and education services, insuring and banking), 2.3 for healthcare, and 1.7 for communication (mobile devices, data centres…). Far from penalising consumers, a circular economy would have more positive societal impacts, the report states.

By promoting the use of local resources, it would stimulate job creation and would reduce the dependency on imported raw materials. The circular economy’s bigger picture, according to Circle Economy, is “to unite a global community behind an action agenda, engaged and empowered both collectively and individually. Its systemic approach boosts capacity and capability to serve societal needs, by embracing and endorsing the best humankind has to offer: the power of entrepreneurship, innovation and collaboration.”

Eco-design and digital technologies

Circle Economy also distinguishes four steps along with seven strategies to bridge the circularity gap. These seven strategies are: prioritising renewable resources, preserving existing resources and goods, re-using and recycling waste, favouring functional economy, optimising and incorporating the use of digital technology, eco-design, and promoting collaboration to create joint value. Nevertheless, the emphasis put on each strategy should also take into account the specificity of the needs that the resource fulfils, as such if recycling is key when it comes to nutrition and consumables, it does not hold such importance in healthcare, where digitalisation is key. Consequently, public funding will be necessary to push such change.

However, in order to take significant steps in this, a global coalition including businesses, governments and NGOs needs to be formed to develop a global target and examine the progress made, the report states.

A programme for 30 companies

A rough outline of such a coalition has already been launched on 24 January in Davos during the World Economic Forum. Circle Economy’s partner the World Business Council for Sustainable Development (WBCSD), a network of 200 companies working to reach he goal of accelerating the ecological transition, presented their programme on circular economy, Factor10. With 30 members across 16 sectors, collectively acumulating $1.3 trillion in revenues, Factor10’s aim is to promote collaboration for circular economy solutions. Peter Bakker, the president and CEO of WBSCD said: “Factor10 represents the critical mass of private sector support needed to implement the circular economy at a global scale. We look forward to seeing the companies involved shape the transition to a sustainable future.”

One of WBSCD’s new members, Danone, has already made a step towards circular economy last week with its brand Evian by promising to use only recycled plastic for its bottles by 2025.

The Ellen MacArthur Foundation’s focus in Davos was on research and startups, as it announced the winners of its Circular Materials Challenge on 24 January. The challenge seeks alternative recyclable and compostable packaging solutions with a $200,000 prize and will join a 12-month programme where they will work with experts to make their innovations marketable.

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