For the sixth year in succession, Circle Economy, a self-described global impact organisation working with an international team of experts in Amsterdam, has compiled and published its Circularity Gap Report, this year for the first time in collaboration with Delotte. The report was presented at the Annual Meeting of World Economic Forum in Davos earlier today.
Amongst others, the report aims to provide a metric that measures the circular state of the world economy. Once again, this year’s results confirm that the trend is a downward one: in 2018, the first year the report appeared, global circularity was measured at 9.1%; in 2020, this had fallen to 8.6; and this year, the outcome was a mere 7.2% - driven by the rise material extraction and use, necessitated by the increasing reliance on materials from virgin sources, according to the authors of the report.‘We can assert that circularity goes down as the general rate of global material extraction rises’, they write. ‘With a circular economy, we can fulfil people’s needs* with just 70% of the materials we currently use—within the safe limits of the planet. Our current economic model is smashing through the planet’s safe limits’.
In other words, this study finds that adopting a circular economy could both reverse the overshoot of planetary boundaries and shrink the global need for material extraction by about one-third. This would require fossil fuels to be eliminated from the global equation—especially coal—and demand for high volume minerals, such as sand and gravel, largely for housing and infrastructure, to be lowered.
The report also points to the fact that more and more materials are going into stocks, such as roads, homes and durable goods, leaving fewer materials to cycle back into the economy. Noting that ‘we cannot recycle our way out of this one’, it calls attention to 4 other key circular economy principles: ’use less, use longer, use again and make clean’, where ‘less’ refers to less virgin material extraction and ‘clean’ to the need to swap out fossil fuels for renewable energy and toxic materials for regenerative ones. 16 solutions based on these 4 principles are identified.
Acknowledging that there are no one-size-fits-all solutions for the circular transition, the report also groups the different countries of the world into 3 different categories to better determine which circular solutions will have the most impact where.
Each country has a different starting point and will progress at a different pace towards the shared global goal of reversing environmental overshoot, while fulfilling people’s needs.
Briefly, the report explains that the world’s highest-income - called Shift- countries deliver
high standards of living, but consume the majority of the world’s materials and massively overshoot many planetary boundaries. They must focus on reducing overconsumption and reducing their impact on the environment. Middle-income, or Grow countries that are rapidly industrialising and have a growing middle-class need to explore on new ways to stabilise and optimise their material consumption to maximise societal well-being. The Build countries, where the majority of the world’s population lives but which use less than a tenth of the materials of Shift countries, must focus on the building up of infrastructure and the provision of wellbeing, even if this requires that they increase their material footprint - because only when a better balance in wellbeing is achieved, can we scale the transition to a circular economy, write the authors of the report.
‘The linear economy has a number of detrimental effects on the environment that significantly affect peoples’ wellbeing. Our research shows that by adopting circular economy practices, we can cut material extraction, continue to prosper, and return to living within the safe limits of this planet,’ commented Martijn Lopes Cardozo, CEO at Circle Economy.
Today, five of the nine key ‘planetary boundaries’ that measure environmental health across land, water and air have been broken. As the report argues, this can be reversed, but to do so, ‘policy, along with the entire economic system, needs to shed business-as-usual: embracing long-term vision and interests over short-term rewards’.
“These findings reinforce that we have reached a point where the planet cannot keep up with the human demand for material goods,” said Dieuwertje Ewalts, Circular economy and sustainability director at Deloitte. “Circularity offers us the opportunity to reduce planetary pressures. Involvement from business and the creation of more circular products going forward will be key in creating a positive impact for both the planet and society.”