Resilience and the Circular Economy

Mark Dempsey16th April 202111min
This blog provides an explanation of the term ‘circular economy’, followed by a brief assessment of its role in addressing the triple planetary crises, improving public health, and boosting economic growth. The paper concludes with an analysis of circular practices in EU and Irish policy contexts. 

 

 

Date: 16 April 2021

Author: Luke O Callaghan-White

Introduction

On Thursday, 22 April 2021, Inger Andersen, Under-Secretary-General of the United Nations and Executive Director of the United Nations Environment Programme, will deliver the third presentation of the Environmental Resilience series, co-organised by the IIEA and the EPA. In her address, entitled: Circularity to Restore the Earth, Ms Andersen will argue that the three planetary crises of climate change, biodiversity loss, and pollution threaten to undermine progress in meeting the UN Sustainable Development Goals. She will propose that societies address the triple crises by incorporating circularity into economic models. Ms Andersen will explore the transformative impact of the circular economy on the ways people produce and consume and how that will be vital to restore Earth’s systems and to secure humanity’s future.

This blog provides an explanation of the term ‘circular economy’, followed by a brief assessment of its role in addressing the triple planetary crises, improving public health, and boosting economic growth. The paper concludes with an analysis of circular practices in EU and Irish policy contexts.

Defining the Circular Economy

For the last 250 years, economies in the developed world have been based on models of continuous growth. However, Earth’s ecosystems are buckling under this insatiable demand for natural resources. Habitats are fragmenting, pollution is having far-reaching negative effects on biodiversity, and expansive land-use conversion to meet growing consumer demand is depleting the planet’s available carbon sinks. If these traditional linear models of production continue, based as they are, on a ‘take-make-consume-throw away’ pattern, we will soon be extracting materials at a rate far beyond the planetary boundaries.

The circular economy is a model of production and consumption which involves sharing, leasing, reusing, repairing, refurbishing and recycling materials to extend the life cycles of products for as long as possible. It represents a paradigm shift in thinking about economic systems; the whole value chain in a circular economic system is regenerative by nature. It disconnects natural resource use and environmental impacts from economic activity. In application, waste and pollution are designed out of the economic model.

Figure 1 illustrates a circular economic model. Here, value is maintained in the form of energy, labour, and materials by keeping products, components and materials circulating in the economy which reduces the dependence on raw materials and minimises residual waste.

The Circular Economy: A Key to Unlocking Solutions for a Sustainable Future

The move to a circular mode of sustainable production and consumption will have a plethora of positive benefits for our shared environment, the climate, and society.

Impacts on the Environment and Climate

The decoupling of economic growth from increases in energy and resource use will have profound effects on soil fertility, biodiversity, and land, water, and air quality.  A circular economy will reduce pressure on the environment and improve the security of supply of raw materials. This system-change will increase competitiveness, stimulate innovation, and boost economic growth.

The shift from a linear to a circular economy will have a marked impact on levels of pollution, which is one of the biggest threats to global biodiversity. Roughly 80% of environmental pollution and 90% of manufacturing costs in the EU are the results of decisions taken at the product design stage. Important pillars of circularity, such as waste prevention, eco-design and re-use, tackle these problems at source and offset biodiversity loss; curb levels of pollution; limit overexploitation of species; and reduce production costs.

The paradigm shift to a regenerative economic system is also a powerful force for climate mitigation. Studies show that a more circular economy can make deep cuts to emissions, especially in heavy industry and hard-to-decarbonise sectors of the economy. At present, the production of material used for every-day life accounts for 45% of the EU’s CO2 emissions. By simply making better use of the materials that already exist in the economy, heavy industry in the EU could get halfway towards net-zero emissions.

Impacts on Human Health and Economic Growth

There is also a significant global health footprint in the transition to a circular economy. In a 2018 study, the World Health Organisation outlined the direct and indirect health benefits associated with circular practices. The report highlights that the reduction of landfill and incineration waste; the removal of harmful chemical substances; and the reduction of greenhouse gas emissions and other pollutants will improve air quality and produce significant public health benefits. Further, it is outlined that the circular economy will contribute to the attainment of the UN Sustainable Development Goals.

Research from the US National Institutes of Health (NIH) has found that circular economy practices can increase the resilience of the medical sector in times of crises. The study highlights that circular strategies of closing resource loops decrease import dependency for medical equipment which improves security of supply of essential goods. Furthermore, the NIH study recognises that ‘sustaining life’ is an important pillar in the circular economy framework. This factor, which integrates biodiversity in the value chain, and concomitantly improves air quality, is pivotal for good public health and can decrease the need for medical services and, ultimately, reduce the likelihood of future pandemics.

Many world leaders have begun to challenge orthodox economic practices and have called for a system change so that societies can “build back better”, in the wake of the COVID-19 pandemic. Shifting to a circular economic model will produce a robust defence against further public health crises and will create significant economic opportunities which, in turn, will stimulate the political, economic, and social recovery from the disruptions the pandemic has caused.

At present, there are opportunities for circular innovation to shape the contours of future business models; the management of global resources; and the priorities of societies. This is the focus of a new initiative by the World Economic Forum (WEF), entitled The Great Reset. A shift to an international circular economy is projected to generate global savings of $200 billion per year and create 700,000 net additional jobs in the EU alone, by 2030.

The European Union’s Circular Action Strategy

The flagship initiative of the von der Leyen Commission is the European Green Deal. The Commission President has pledged that Europe will become the world’s first climate-neutral continent by 2050. The European Green Deal is more than a framework with a set of climate targets, however; it is Europe’s new growth strategy. 

The EU’s commitment to the Green Deal has weathered the storm caused by the COVID-19 pandemic. Indeed, 30% of the EU’s €1.8 trillion budget and economic recovery plan 2021-2027 will be allocated to climate action. To put Europe on a trajectory for net-zero emissions by 2050, the Commission has introduced a wide range of new and updated climate and energy legislation to address the structural barriers in European economies.

In March 2020, the European Commission published its Circular Economy Action Plan 2.0 (CEAP 2.0), which is one of the main building blocks of Europe’s new agenda for sustainable growth. The Action Plan targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and that the resources used are kept in the EU economy for as long as possible.

CEAP 2.0 introduces a range of legislative and non-legislative measures to create a framework for sustainable products. It focuses on the sectors that use most resources and where the potential for circularity is high, such as: electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, food, water and nutrients.

The European Parliament adopted the Commission’s CEAP 2.0 in February 2021. In a resolution endorsing the Plan, MEPs called on the European Commission to include more stringent targets, in particular to broaden the scope of the Eco-Design Directive to ensure that products on the EU market are durable, reusable, easily repairable and are resource-and-energy-efficient. The resolution, which received overwhelming support from MEPs, emphasised that the consumer benefits of a circular economy should be made to clear to the public.

Ireland’s Circular Economy Initiatives

The Waste Action Plan for a Circular Economy, introduced in September 2020, is Ireland’s roadmap for waste planning and management. It serves as a framework for how Ireland can embrace the opportunities presented in becoming a circular economy by 2030. It aims to take Ireland from laggard to leader in this regard.  The Waste Action Plan has five key areas of focus:

  1. Shift the focus away from waste disposal and treatment to ensure that materials and products remain in productive use.
  2. Make producers environmentally accountable for the products they place on the market.
  3. Ensure that measures support sustainable economic models.
  4. Harness the reach and influence of all sectors in the economy.
  5. Support clear and robust institutional arrangements for the waste sector, including through a strengthened role for Local Authorities.

The Irish Government has acknowledged that COVID-19 has acted as an accelerant in the transition to a circular future. The Waste Action Plan highlights that the pandemic has exposed fragilities within our global economic model. The far-reaching effects of COVID-19 has led to a re-imagination of the ways we work, produce, transport, and consume goods. Circular strategies can deliver cost savings and create diversification opportunities from creating new products from resources previously regarded as waste – supporting job creation and economic growth.

Conclusion

The transition away from an unsustainable linear economic model to a circular economy facilitates both top-down and bottom-up initiatives for sustainable growth. It represents an opportunity for inclusive new strategies which will maintain public support and promote resource-efficient innovation, while simultaneously reducing environmental and climate pressures. Inger Andersen recently highlighted that the world needs “both the private and public sectors to transform our economies to address climate change, reduce pollution and improve resource efficiency. Collective action is critical to delivering on the Agenda 2030 for Sustainable Development.”

The circular economy is a paradigm shift. It represents a transformation in the ways we produce and consume by disconnecting resource extraction from economic value and by designing pollution and waste out of production cycles. Circular economies will ease the overwhelming burden on Earth’s ecosystems, reduce pollution and limit biodiversity loss, and will reduce greenhouse gas emissions. Beyond these substantial environmental and climate benefits, humankind stands to benefit from the resilience of this economic model.

As part of the Environmental Resilience lecture series, co-organised by the IIEA and EPA, Under-Secretary-General of the United Nations and Executive Director of the United Nations Environment Programme, Inger Andersen, will argue that circularity will restore the Earth and secure the future of humanity. Her address will take place on Thursday 22 April 2021, at 1.00pm (Dublin Time).

This event is open to the public and free to attend. You can register for this event here.

[1] https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits.