International organizations and donors are considering how the CE fits into (or supports the delivery of) international priorities such as the SDGs and national commitments under the Paris Climate Agreement. For now, most organizations approach the CE as a potentially important framework or toolset for delivering existing priorities for sustainable development or the green economy. Several donors are actively exploring the possibility of establishing dedicated CE strategies or programmes.
CE approaches can be complicated, requiring partnerships and collaboration that take time to build
One challenge for CE approaches is that they can be complicated, requiring partnerships and collaboration that take time to build. At present, although there are lots of examples of ad hoc cooperation, many areas would benefit from enhanced and more formal coordination. This section of this briefing uses examples to explore four such areas. It is not intended to be comprehensive, and many organizations not mentioned here are also engaged in innovative work.
First, for UN agencies, there will be a role for the secretary-general’s office given the range of agencies involved. The UN Environment Programme (UNEP) is leading in the area of green growth and sustainable production and consumption. It has projects in Chile, Sri Lanka and Brazil. UNDP is working with several countries (it has co-developed a strategy with Laos and is active in Peru). The Food and Agriculture Organization (FAO) is examining the potential application of the CE in rural areas. The secretariat of the UN Framework Convention on Climate Change (UNFCCC) is exploring the links between climate change finance and the CE. Issues around trade are being examined by the UN Conference on Trade and Development (UNCTAD) and UN Industrial Development Organization (UNIDO), together with the World Trade Organization (WTO).
Second, multilateral financial institutions (MFIs) will play a critical role in facilitating investment in resource productivity and the CE. Most are already scaling up their activities in this space. At the same time, they are finding it hard to identify a pipeline of projects at the kind of scale that they usually finance. This is partly because traditional project-based finance is not well suited to more systemic solutions involving coordination of multiple stakeholders. In some cases the problem is that institutions are mandated to work with national-level agencies, whereas interventions are often needed at the municipal or state level. MFIs vary significantly in terms of lending profile and range of activities, and partnerships between them could help to address these barriers.
The Global Environment Facility – the financial mechanism for five major environmental treaties – provides a means for countries to explore initial action as well as an outline of a results framework. Its seventh framework programme (7YP) has the CE as one of its Impact Programmes.72 This has helped foster collaborations involving the African Development Bank, the World Economic Forum and the World Bank in Rwanda and Nigeria. The 7YP recognizes that the CE could not only address pollution, but also tackle greenhouse gas emissions and help protect marine biodiversity.73
Third, leading countries and regional groupings can do more to foster international collaborations to share experiences and address potential risks. Given its leadership in the CE agenda, the EU could play a critical role here. The European Commission is actively exploring the opportunities for the CE in emerging and developing economies, with missions already despatched to China, South Africa and Chile and more to follow over the coming year.74 The OECD’s work on CE modelling tools to enhance the evidence base and determine the impact of different policy levers should make it easier to bring CE practices into economic and industrial planning.
Leading countries and regional groupings can do more to foster international collaborations to share experiences and address potential risks
BRICS countries also have important lessons and capacities in the CE that could be pursued – for example, within the Forum on China-Africa Cooperation and the BRICS Forum. India has established the Indian Resource Panel (InRP) to help the government devise a comprehensive strategy for resource efficiency.75 As mentioned above, China has well-established CE frameworks that include the Circular Economy Promotion Law and the Circular Economy Development Strategy and Near-Term Action Plan.76
Fourth, the G20 under Germany’s presidency in 2017 has helped to bring together a variety of natural resource challenges into a single dialogue. Argentina takes over in 2018 and will be well placed to advance this work, including through a G20 ‘resource partnership’ agreed in Berlin and launched in November 2017. This could be an important process for aligning action and exchanging experience on the CE among G20 countries and developing-country partners, with a continuing role for the International Resource Panel in providing the evidence and research to facilitate this exchange. Chatham House research has previously identified the need for a more sustained focus on natural resources at the G20.77
72 Global Environment Facility (2017), ‘GEF-7 Programming Directions and Policy Agenda’, First Meeting for the Seventh Replenishment of the GEF Trust Fund, 28–30 March 2017, Paris.
73 Ibid.
74 European Commission (2017), ‘Circular Economy Missions to Third Countries’, http://ec.europa.eu/environment/international_issues/missions_en.htm (accessed 12 Sep. 2017).
75 NITI Aayog (2017), Strategy Paper on Resource Efficiency, June 2017.
76 McDowall, W., Geng, Y., Bleischwitz, R. and Kemp, R. (2017), ‘Circular Economy Policies in China and Europe’, Journal of Industrial Ecology, 21(1): pp. 651–61, doi: 10.1111/jiec.12597 (accessed 11 Jun. 2017).
77 Lee, B., Preston, F., Bailey, R., Lahn, G. and Kooroshy, J. (2012), Resources Futures, Chatham House Report, London: Royal Institute of International Affairs, https://www.chathamhouse.org/sites/files/chathamhouse/public/Research/Energy,%20Environment%20and%20Development/1212r_resourcesfutures.pdf (accessed 19 Jan. 2016).