Estimated reading time 5 min

Is circularity progressing or declining?


Tim Forslund

Specialist, Nature and the economy


Today, our world is only 8.6% circular. That is less than in 2018, when the first Circularity Gap Report found that the world was 9.1% circular.

This year’s report has bad news: we have not been moving forward.The good news is that we still can, and the new report presents a clearer path forward – a path we cannot afford to ignore as it gives us more from less, while bringing the Paris Agreement within reach.

In many ways, 2020 was a year of losses and ordeals. The pandemic also shone a light on the drawbacks of the brittle linear economy and proved that we need a different type of economy. It has also helped show what we are capable of.

As the report states, “we are now armed with the knowledge that transformational change is doable”. This decade will be decisive, and 2021 will largely set the course. The year of 2020 was supposed to be the “super year for nature” with two large climate and biodiversity COPs (conferences of parties) due to take place. While we have lost valuable time, the delay has also given us a chance to take stock of how we should best tackle these planetary crises. The pressure is now on us to tackle these crises more effectively, by addressing their root causes, through the circular economy.

The new report presents three key actions.

Build a coalition for action that is both diverse and inclusive

Central to the circular economy is the idea that diversity builds resilience, in natural as well as man-made systems. The pandemic showed that we are in short supply of resilience.

Building a broad, diverse and inclusive coalition was central to the thinking when Sitra developed the world’s first national circular economy road map. These lessons learned could be valuable in the global transition to a circular economy. In particular, common goals jointly shaped at the outset can hold the different players together in the long term.

Integrate plans for leveraging the circular economy into national climate pledges

According to the new report, the current Paris Agreement pledges to take us approximately 15% of the way towards a world in which the temperature rise is well below the goal of 2 ºC by 2032, while the circular economy could deliver the other 85%. To get there by 2032, we would need to double the circularity rate, up to 17%.

In other words, the circular economy can be a powerful force for climate mitigation that must not be forgotten in climate pledges. The climate mitigation potential could also be given more thought in national circular economy road maps and strategies, 20 of which have been developed in Europe alone.

However, the transition does not stop there, and the new report lists different priorities for low-, middle- and high-income countries, from the need to renovate our existing building stock and decreasing the consumption of animal products in high-income countries to avoiding monocropping, deforestation and a lock-in of energy-intensive motorised transport systems in low-income countries.

Create an enabling environment to facilitate the circular transition

To help accelerate the transition, we need to rethink financial flows in support of a carbon-neutral circular economy. We also need to set the right rules of the game. Policy is key. For example, the EU Circular Economy Action Plan sets a clear course with its sustainable product policy framework, which aims to make sustainable products, services and business models the norm in Europe.

The Ellen MacArthur Foundation has just published a toolkit for policymakers built around five goals.

  1. Stimulate design for a circular economy – As at least 80% of the environmental impact of products is determined at the design stage, it is vital to stimulate high-quality design based on circular principles.
  2. Manage resources to preserve value – Besides design, new business models can help keep things in use, as can deposit-refund schemes, common resource classifications and procurement policies in support of repair, resale and sharing.
  3. Make the economics work – Taxation, subsidies and trade policies can be aligned with circular outcomes to help catalyse the transition.
  4. Invest in innovation, infrastructure and skills – Investments in tomorrow’s skills and innovations are needed, especially interdisciplinary research and circular economy learning across all levels of education.
  5. Collaborate for system change – System change implies that we deal with our challenges not in isolation, but together across national borders as well as sectors, working to both develop new policies and build better alignment with existing ones.

The toolkit also highlights that a circular economy can play a significant role in halting biodiversity loss. In fact, as much as 90% of biodiversity loss is the result of resource extraction and processing, according to the International Resource Panel.

If 2021 is to have a better shot at becoming the “super year for nature”, we need to think systemically, tackling not just a twin but a triple crisis.

The circular economy could provide many of the answers to all three crises.

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