A global transition to a circular economy is essential for achieving the majority of the SDGs and for the post-2030 development agenda.
The economic, social and environmental case for shifting to a ‘circular’ global economy – a sustainable alternative to current wasteful and polluting models of production and consumption – is increasingly clear, and supported by an extensive academic literature. But the global mechanisms for getting there largely remain lacking. This is partly because the concept of the circular economy, despite rapid uptake in many countries, is in its relative infancy and the new institutional frameworks and market structures to support its development and expansion have yet to be established. It is also because circular economy principles are insufficiently recognized in a formal way in the existing multilateral system, particularly in the realm of sustainable development.
However, the prospect of change is emerging. The type of development model and global approach required for the post-2030 development agenda is receiving increasing attention from the international community and policymakers. This reflects the world’s lack of progress towards meeting the UN’s Sustainable Development Goals (SDGs), and the fact that only six years remain before the 2030 deadline for the SDGs is reached. Given widespread concerns about this issue and the additional anxiousness of many policymakers to decide what should come after the SDGs, there is an emerging opportunity to embed the circular economy more fully in the sustainability debate at a multilateral level. This paper aims to contribute to UN-led discussions on ‘the circular economy’, outlines important principles that need to inform collective work on the circular economy as a catalyst for SDG realization, and proposes an indicative, SDG-linked blueprint for the future of the circular economy to 2050 to inform wider policy deliberation and negotiations.
In simple terms, a ‘circular economy’ is a system that seeks to deliver social and economic prosperity without requiring unsustainable levels of raw material extraction, consumption and pollution. To achieve this, it combines three design principles: eliminating waste and pollution; extending the lifetime of products and materials for as long as possible; and regenerating natural systems. Achieving a circular economy is not simply about recycling more, although recycling is a well-known part of such a model. Rather, the transition requires reorienting and redesigning the underpinning goals and structures of societal provisioning systems (food, transport, energy, shelter) in a way that dramatically reduces raw material and energy consumption.
Benefits and transformative potential of the circular economy
If introduced systemically and globally, the circular economy promises many economic benefits. For example, it can reduce the economic costs of pollution and mismanaged waste. The Lancet Commission on pollution and health has estimated that the global costs of pollution alone amount to $4.6 trillion per year – equivalent to 6 per cent of global GDP in 2019. At the same time, the estimated potential of the circular economy to create opportunity is significant. In the US alone, moving to a circular economy could cut raw material inputs in just three strategic industries – grid-scale and electric vehicle batteries, the built environment, and electronics – so substantially that between $883 billion and $1.5 trillion a year in revenue and economic value could be unlocked, sums equivalent to between 3.3 per cent and 5.5 per cent of US GDP in 2023.
The restoration of degraded terrestrial and aquatic ecosystems could generate up to $9 trillion in ecosystem services worldwide by 2030. Meanwhile, in terms of non-monetary environmental benefits, circular strategies could complement existing climate mitigation efforts. Such strategies could help achieve 45 per cent of the global greenhouse gas emissions reductions needed to decarbonize the economy – and not only in the energy and transport sectors – by transforming the way products and materials are made and used. Circular strategies, though not proven at scale in practice, could theoretically also could halt biodiversity loss and, by 2035, enable global biodiversity to recover to its 2000 levels.
This transformative potential is reflected in the circular economy’s rising profile in multilateral forums. At recent sessions, the UN Environment Assembly (UNEA) has published resolutions explicitly referencing the circular economy in calls for action on sustainability and for international cooperation to achieve environmental goals. Resolution 11 from UNEA-5, for example, recognized ‘the importance of inclusive multilateral and multi-stakeholder dialogues on sustainable consumption and production, resource efficiency and the circular economy to promote sustainable development’.
Similarly, in 2023 the UN’s High-Level Advisory Board on Effective Multilateralism (HLAB) – appointed by the UN secretary-general to galvanize international cooperation on addressing planetary challenges – published a report highlighting the importance of the circular economy for achieving the SDGs, global security and prosperity. The report called for the establishment of a ‘Pact for People and Planet’ that would raise ambition on environmental targets and make signatories more accountable for achieving them. HLAB’s stated goal for this draft pact – still a work in progress, and subsequently rebranded as the ‘Pact for the Future’, the intended outcome document of the Summit of the Future in September 2024 – was to enable a global transition to a circular economy, ‘addressing both supply and demand in a way that achieves balance with the planet’.
Perhaps the most urgent argument for the circular economy was made by the International Resource Panel (IRP), a grouping of scientists set up by the UN Environment Programme (UNEP), in its Global Resources Outlook 2024. Without a coordinated global approach to the circular economy, the IRP warned, resource consumption could increase by 60 per cent from 2020 levels by 2060. The report also implicitly emphasized the need for a just transition to a circular economy, observing that resource consumption and impacts are distributed unequally between countries, and that high-income countries use six times more materials per person and are responsible for 10 times more climate impacts per person than is the case for low-income countries.
The circular economy will be especially important for helping countries fulfil their 2050 net zero climate commitments. Accordingly, a growing number of countries are including circular economy components among the intended actions in their nationally determined contributions (NDCs) on emissions reduction and climate change adaptation. In 2022, 79 countries had directly committed to adopting a circular economy within their Paris Agreement NDCs. However, research has suggested that these commitments are ‘wildly inconsistent’ and that this ‘seriously risks’ undermining essential work on climate action. Among specific examples of the circular economy’s relevance to NDCs, circularity in the life cycle of critical raw materials will be essential to ensure sustainable and resilient supply chains for the clean energy transition. Adopting a circular economy for critical raw materials can reduce dependence on primary mining for limited resources, thereby also decreasing competition and potential conflicts between countries over the supply of these materials.
The arguments for global coordination
Avoiding regulatory fragmentation and maximizing the common good
Governments are increasingly implementing national circular economy action plans and related initiatives: as of May 2024, more than 75 national circular economy action plans, roadmaps and strategies have been launched (another 14 are in development). At one level, the amount and intensity of activity are an encouraging sign of momentum. However, these documents have so far been drafted unilaterally, with many seeming to hold the primary goals of boosting competitiveness against trade partners, reshoring industry and jobs, and building supply-chain resilience by reducing dependence on imported critical materials.
Such a unilateral approach has resulted in a kaleidoscope of rapidly evolving policies and standards – including around 3,000 commitments spanning 135 policy areas and 17 sectors. All too predictably, this regulatory fragmentation increases barriers to trade between nation states. Additionally, despite policy efforts on national and local levels, the global economy itself is becoming less circular. The Circularity Gap Report 2024 concluded that the global economy is only 7.2 per cent circular, compared to 9.1 per cent in 2018, in effect creating a large ‘circularity gap’ between actual levels of activity and the ultimate goal of a fully circular economy. In other words, even as the circular economy takes off and initiatives proliferate worldwide, this is not offsetting increasing overall levels of non-circular activity. Moreover, the fact that investment is still mostly directed towards resource-intensive ‘linear’ industries rather than to recovery and recycling industries makes it all the harder for the circular economy to achieve critical mass.
Beyond creating policy overlaps and confusion, the prevalence of unilateralist national approaches to achieving a circular economy is increasingly recognized as fundamentally ineffective. We argue that the circular economy, if it is to function at a meaningful scale, is necessarily an international and cooperative project. Beyond localized, low-level initiatives, no country can achieve a circular economy on its own. Rather, all countries are dependent, to varying degrees, on trade partners to secure affordable and reliable access to the wide range of specialist materials, goods and services needed to perform domestic circular activities. A functional circular economy-related trade system is needed to optimize resource use on an aggregate global basis so that the above-mentioned ‘circularity gap’ can be closed, but this implies countries being freely able to export used goods or secondary raw materials to trade partners that have both the demand and scale necessary to make economical use of them. Equally, domestic policies such as national ‘ecodesign’ standards, which would require products to meet strict sustainability criteria, will necessarily depend on the willingness and ability of external supply-chain actors to adjust product design and manufacturing processes to meet market access requirements.
The circular economy, if it is to function at a meaningful scale, is necessarily an international and cooperative project. Beyond localized, low-level initiatives, no country can achieve a circular economy on its own.
This underlines the idea that the launch of policies in any one country is likely to create ripple effects (and, in some cases, to extend the analogy, veritable ‘tsunamis’ of impacts) along international value chains, resulting in potentially negative impacts on producers in countries not prepared or able to meet such standards. An example is the EU’s Ecodesign for Sustainable Products Regulation, which will put in place comprehensive market access requirements (covering reusability, repairability, non-toxicity, recyclability) for a wide range of goods in categories that include textiles, electronics and furniture. If introduced without providing appropriate support or funding to implement changes, such requirements may severely strain industry in developing countries, which commonly lack the capital, expertise and equipment needed to redesign products, retool production and retrain staff in accordance with new rules.
Why principles of justice and inclusivity matter for design of the circular economy
No less important a reason for global coordination, including the enshrinement of agreed common principles within any new framework, is the risk that the circular economy transition could otherwise perpetuate or amplify imbalances and inequities between countries’ natural resource wealth, undermining environmental resilience in some cases. An increasingly siloed approach to circularity would risk encouraging ‘circular resource nationalism’ – where a country prioritizes sovereign control over its secondary material resources (at all stages of their life cycle) and asserts this control through the principles of the circular economy. The rising profile of politicized arguments and misinformation around deglobalization and nationalism is tempting governments to view the circular economy as a tool for resource nationalism, especially in terms of zero-sum competition for the critical raw materials needed for digital technologies, defence applications and renewable energy.
This underlines the need for justice and inclusivity to be enshrined as fundamental principles in any multilateral governance framework for the circular economy. Doing so is more than simply a moral imperative; it is a pragmatic necessity both for effective engagement with the UN system, where such values already explicitly underpin the SDGs, and more widely for achieving political and popular support for the far-reaching economic reforms implied by the circular economy. For the circular economy to be embraced at sufficient scale, adherence to the principle of a just and equitable transition will be important to ensure that countries in the Global South can see the benefits. They will need to be actively supported by countries in the Global North, and be equal partners in the roll-out of the circular economy to ensure that economically disruptive reforms and new technologies will support socio-economic development and create new employment opportunities. By prioritizing the needs and aspirations of communities and workers in developing countries, addressing historical inequalities associated with today’s predominantly linear economic system, and providing support for capacity-building and technology transfer, the global community can not only foster a more inclusive and equitable transition to circularity but pre-empt resistance to its growth. In this, important lessons from the energy transition apply to the circular economy: if reform is not inclusive, it will merely exacerbate inequalities, limit access to essential resources and opportunities, and marginalize certain communities.
