Radical transformation of the way the world uses natural resources is central to achieving the Sustainable Development Goals (SDGs), reaching the targets of the Paris Agreement and meeting the needs of future generations. The circular economy is increasingly regarded as a promising model for driving sustainable and resilient economic growth in both developed and emerging economies. However, to successfully scale circular practices and ensure the transition from a linear to a circular model leaves no one behind, an open and collaborative approach is required.

In collaboration with partners, Chatham House aims to provide a strong evidence base of the opportunities and trade-offs in a transition from linear to circular models by robustly analysing the political economies in key regions in the developing world and engaging with leading stakeholders from governments, international organizations, civil society and the business community. Chatham House seeks to reframe the global conversation around the circular economy, encourage a race to the top among key countries, build new coalitions and partnerships and work with relevant organizations on evidence-based decision-making.

Funding for this project is provided by the MAVA Foundation. It focuses on, and aims to find solutions for, the following objectives and challenges:

Forging collaborative opportunities across key countries

Until now, discussions on the circular economy have paid little attention to emerging economies other than China. But the lack of global attention on developing countries belies a great deal of circular economy activity as our report An Inclusive Circular Economy: Priorities for Developing Countries discusses. Many countries across sub-Saharan Africa, South and Southeast Asia and Latin America are adopting national policies and launching initiatives to promote the circular economy. To identify viable collaborative opportunities at the international level, a clearer understanding is needed of the potential winners and losers under different circular economy scenarios. What are the key factors that will determine if the transition from a linear to a circular economy will be just and inclusive? How can we build a ‘win-win’ vision which includes solutions for developing countries, workers and consumers? How can the transition to a more circular economy help to close North–South divides rather than widening them further?

Linking climate change and circular economy

The circular economy offers significant potential and cost-effective solutions to reduce greenhouse gas emissions in key economic sectors. The achievement of an economy with net zero emissions will not only require renewables and energy efficiency measures but also demands reduction in material use and tackling the global waste crisis. Many Nationally Determined Contributions (NDCs) submitted under the Paris Agreement already include actions related to waste. How can these efforts be scaled up and what other circular economy opportunities exist that countries can apply to achieve more ambitious climate targets? What are the barriers that stand in the way of aligning circular economy strategies, climate change policies and national development plans and how can these be overcome? What role do consumption, lifestyles and behaviour play in the circular economy and in achieving the 1.5 degrees target? How can the potential benefits of a circular bioeconomy for climate mitigation be maximized while minimizing negative impacts on biodiversity?

Closing the investment gap

Lack of investment is a key barrier to scaling up the circular economy. As long as the circular economy remains poorly understood, or viewed as an untested concept among investors and finance providers, transformational projects and initiatives will struggle to raise finance. What are the investment needs and opportunities in countries, key industry sectors and global value chains? What are the finance mechanisms and tools needed especially in low- and middle-income countries? How can climate finance instruments for low-carbon development be linked to the circular economy? What role can taxation and public finance play to stimulate the shift from linear to circular models? How can the financial sector be further incentivized to contribute to the transition to a circular economy?

Building the evidence base for trade in the circular economy

The role of global and regional trade in the circular economy is, so far, little understood. More countries are developing national circular economy strategies but these strategies and policies exist in the context of a global economy and international value chains. A clearer understanding of traded waste products, secondary resources and their physical trade flows across a range of sectors is needed to design effective national and international trade policies that support the circular economy. What impact do export and import regulations of waste and secondary materials have on global value chains? How will the shift from the acquisition and consumption of goods to services in a circular economy influence trade patterns? As extracting secondary materials e.g. through urban mining becomes economically and technologically viable, how will this affect low- and middle-income countries dependent on primary resource extraction and exports?

Coordinated initiatives on a high ambition circular economy agenda

The circular economy is a fast-moving agenda with strong links to numerous other topics of global importance like climate change risks, rising inequalities and changing trade relations. To shape the global discussion and maximize impact, Chatham House engages with key stakeholders and decision-makers from policy, industry, civil society and academia. A series of international conferences, regional stakeholder workshops and side events during international events will be held to advance international cooperation for a high-ambition and inclusive circular economy agenda.