Together with the management consultancy Deloitte, the global organization Circle Economy Foundation today published its “Circularity Gap Report 2024”. It shows that the global circular economy rate is currently falling from 9.1 percent to 7.2 percent, although the number of discussions, debates and articles about circular economy has almost tripled in the last five years. This means that although everyone talks about it, only a few actually act on it.
“We are currently exceeding five of the nine boundaries that are critical to the health of our planet – if we continue like this we will put people and planet at increasing risk. Through a circular economy, we can relieve this pressure and return humanity to a safe space,” explains the Amsterdam-based organization, which aims to double the global circular economy by 2032.
The latest report is a step in this direction, moving from theory to action by showing how the three key drivers of policy and legal frameworks, finance and labor and skills drive sustainable progress worldwide in wealthy, middle-income and middle-income countries low-income countries can advance. Furthermore, “the world’s wealthier countries can no longer use progress as an excuse for unrestrained material consumption,” the report warns.
Moving from theory to action also means addressing the causes of linear impacts and moving away from flawed economic practices known to be socially and environmentally exploitative, and ultimately changing the rules in favor of circular practices. “This requires unlocking capital, adopting bold, contextual policies and closing the sustainable and circular skills gap,” the report says.
How bad is it?
In the last five years, humanity has consumed a whopping 500 billion tons of materials – almost as much as in the entire 20th century(!). This means that globally we are consuming more new materials than ever before, while the proportion of secondary materials is declining.
“The Circularity Gap Report enables stakeholders to prioritize their circular economy plan based on data-driven analysis. Policymakers, industry leaders and financial institutions can agree on focus areas and work together on the systemic change necessary to respect planetary boundaries,” comments Ivonne Bojoh, CEO of the Circle Economy Foundation, in a press release.
“To ensure that the transition to a circular economy is just and fair, circular solutions must be developed with the world’s most vulnerable populations in mind, then these solutions will reduce workforce inequalities and increase job opportunities globally,” adds Bojoh.
Political measures and legal framework conditions
In this area, the report emphasizes that policy and legal frameworks could incentivize sustainable and circular practices while penalizing harmful, linear practices, with wealthy countries focusing on adjusting regulations in construction and manufacturing industries, for example Setting standards for product durability and strengthening the right to repair.
In middle-income countries, promoting the circular economy in agriculture and manufacturing would be a top priority, with local governments imposing and enforcing public bans and pollution limits, requiring extended producer responsibility systems, requiring a minimum proportion of recycled materials for all new production demand and at the same time provide funds for regenerative agriculture.
“Lower-income countries could prioritize sustainable development through circular economy measures in construction and agriculture. “This includes debt relief and better access to development and transition capital, securing the rights of small farmers and incentivizing the use of local, ecological and secondary materials in construction,” the report says.
financing
To unlock finance for circular construction and manufacturing in high-income countries, the study suggests rethinking accounting standards and practices and introducing taxes to increase the price of unsustainable products.
In emerging markets, governments could shift their subsidies from environmentally damaging practices in agriculture and manufacturing to clean, regenerative practices. They could also ensure that all future investments comply with environmental and social welfare standards.
For lower-income countries, the study proposes development and transition funds to support circular actions in key sectors such as agriculture and construction – for example regenerative agriculture and smart urban planning.
Work and qualifications
The report highlights the need to enable a just transition by bridging employment and skills gaps: “This means that curricula – particularly for vocational training – should include green disciplines and skills. Short-term courses could be a solution to meet the immediate and growing demand for green jobs, from renewable energy technicians to repair specialists.”
In addition, the report suggests developing countries formalize informal employment and focus on making emerging jobs decent, inclusive and well-paid to ensure a just transition for all.
Fast fashion
In the fashion sector, the report calls for avoiding fast fashion in favor of sustainable textiles. This should be accompanied by a drastic reduction in the purchase of new clothing and the repair, reuse or recycling of used clothing. Natural and local textile production as well as high quality and durable garments should be preferred.
The report also highlights examples of successful sustainable development, including Hafencity in Hamburg, a former industrial wasteland that has been transformed into an inclusive city-within-a-city; CocoaAction Brasil, which uses regenerative agriculture to empower small cocoa farmers and positively impact production systems; Rwanda’s Circular Economy Action Plan in the Construction Sector; and China’s manufacturing sector being upgraded through an eco-industrial park program, industrial symbiosis and remanufacturing.
The complete “Circularity Gap Report 2024” can be viewed via Circularity Gap.