1. Introduction
Since 2017, annual global primary resource extraction and use has exceeded 100 billion tonnes per year; and estimates by the International Resource Panel1 indicate that by 2050 annual global material use could amount to between 170 billion and 184 billion tonnes – an unsustainable level that increases global environmental risks. Today, only 8.6 per cent of the resources and materials in the global economy are reused or recycled.2 A transition to circular economy is required to move away from the current linear economic model of ‘take–make–throw away’. This transition is crucial for reaching the environmental goals of the 2030 Agenda for Sustainable Development, and to achieve countries’ climate targets as set out in the 2015 Paris Agreement.3 In the context of these two critical multilateral undertakings, it is important to ensure that the transition to a resource-efficient and circular economic model will also deliver on social objectives – poverty eradication, improved livelihoods and well-being, decent work, and reduced inequalities.
The concept and the political agenda of ‘just transition’ has gained significant traction in international and national debates on climate change and energy transitions. In this context, it refers to deliberative political processes that:
- Support regions, industries, workers and communities that are adversely impacted by climate change mitigation measures and environmental policies through reskilling and training;
- Give affected stakeholders a seat at the table in decision-making processes about future economic and social development in their regions and countries;
- Recognize rights to resources and resolve competing development interests through participatory processes;
- Anticipate and address unintended social consequences that emerge from industrial restructuring and phasing out of high-polluting industries and sectors; and
- Rectify existing inequities at an international level between countries, and mitigate emerging conflicts between countries through collaboration and support mechanisms.
The political economy of the transition from a linear to a circular economy has a number of similarities with that of low-carbon transition. As pointed out by the UN World Social Report 2020: ‘A just, equality-enhancing transition towards green economies calls for the integration of climate action with macroeconomic, labour and social policies aimed at job creation, skills development and adequate support for those who will be harmed.’4 So far, the circular economy narrative has been mainly framed as a purely technological matter or a question of ‘making the business case work’. As with the energy transition, the circular economy transition will not only be a technological transition; it will likely also be intensely political.
This research paper makes the case that considerations of justice and social equity are as important for the circular economy transition as they are in the contexts of low-carbon transitions and digitalization of the economy. Without social justice considerations, the circular economy transition will face challenges in getting established as an alternative new economic model, let alone in being sustained over time. Adopting a just transition approach will be critical from an ethical point of view, as well as to ensure active participation and public acceptance of policies and regulatory reforms.5
Considerations of justice and social equity are as important for the circular economy transition as they are in the contexts of low-carbon transitions and digitalization of the economy.
At the international level, the structural transition to a circular economy will influence and reshape trade relations, value chains and flows of primary raw materials between countries. Most importantly, import and export demand for primary materials, secondary materials and waste may decrease in certain economies.6 Low- and middle-income countries that are heavily dependent on extractive industries stand to lose out in the medium to long term. The impacts arising from lost exports in countries that are particularly reliant on resource exports for their economy and tax revenue are likely to be significant.7 This may also have a negative effect on the ability of low- and middle-income countries to attain the SDGs.8 A just transition is therefore critical in ensuring that the circular economy does not create new disadvantages for countries in the future trade system. International support for inclusive initiatives and the diversity of circular approaches that are emerging in developing and fast-industrializing economies provide an opportunity to advance just transitions on a global scale.
Some important lessons can be learned from the low-carbon transition context: efforts to reduce geopolitical friction in the international system, in which oil producing countries might need to be compensated to protect biodiverse ecosystems and keep oil and gas reserves in the ground,9 and to avoid disruptive influences by countries’ last-ditch attempts to flood the world with cheap oil and gas,10 might also become relevant for the circular economy transition. Although it would be politically difficult, similar approaches may need to be applied to support low-income countries – for example, countries that are heavily dependent on the mining sector, which would be negatively affected by a circular economy of metals and minerals leading to reduced demand for primary materials.
This paper first introduces the relevance of the circular economy in the international development and SDG context. It then sets out the just transition approach, and its relevance in climate change and energy transition debates. The paper then explores how the just transition approach can be successfully applied in the circular economy context. Three examples from the priority sectors and value chains of metals, mining and electronics, the textile and fashion sector, and waste management and plastic recycling highlight the potential negative transition impacts and opportunities for just transition approaches. The roles of policy, finance and international trade are outlined as means of steering the transition from linear to circular in an inclusive manner. In conclusion, the paper offers recommendations for policymakers, business leaders, academics and social entrepreneurs on how to advance a just circular economy transition at national and international level.
1 International Resource Panel (2017), Assessing global resource use: A systems approach to resource efficiency and pollution reduction, Report of the International, Resource Panel, Nairobi: United Nations Environment Programme.
2 Circle Economy (2020), Circularity Gap Report 2020, Amsterdam: Circle Economy, https://www.circularity-gap.world/2020#downloading (accessed 12 Mar. 2020).
3 Material Economics (2018), The Circular Economy: a Powerful Tool for Climate Mitigation, Material Economics, https://www.sitra.fi/en/publications/circular-economy-powerful-force-climate-mitigation/ (accessed 24 Nov. 2019).
4 UN DESA (2020), World Social Report 2020, Inequality in a rapidly changing world, UN Department of Economic and Social Affairs, Geneva: United Nations.
5 Emden, J. and Murphy, L. (2019), A Just Transition: Realising the Opportunities of Decarbonisation in the North of England, Institute for Public Policy Research, https://www.ippr.org/files/2019-03/energy-skills-march19.pdf (accessed 20 Nov. 2019).
6 OECD (2018), International Trade and the Transition to a Circular Economy, Paris: OECD Publishing, https://www.oecd.org/environment/waste/policy-highlights-international-trade-and-the-transition-to-a-circular-economy.pdf (accessed 22 Feb. 2020).
7 de Jong, S., van der Gaast, M., Kraak, J., Bergema, R. and Usanov, A. (2016), The Circular Economy and Developing Countries: A data analysis of the impact of a circular economy on resource-dependent developing nations, Centre of Expertise on Resources, https://hcss.nl/sites/default/files/files/reports/CEO_The%20Circular%20Economy.pdf (accessed 22 Feb. 2020).
8 Kettunen, M., Gionfra, S. and Monteville, M. (2019), EU circular economy and trade: Improving policy coherence for sustainable development, https://ieep.eu/publications/eu-circular-economy-and-trade-report (accessed 20 Nov. 2019).
9 Friedman, L. (2012), ‘Ecuador Asks World to Pay to Keep Yasuni Oil Underground’, Scientific American, 1 May 2012, https://www.scientificamerican.com/article/ecuador-asks-world-to-pay-to-keep-yasuni-oil-underground/ (accessed 12 Mar. 2020).
10 Brazilian, M., Bradshaw, M., Goldthau, A. and Westphal, K. (2019), ‘Model and manage the changing geopolitics of energy’, Nature, 569, pp. 29–31, doi:10.1038/d41586-019-01312-5.