Research paper
Published 1 April 2020
Updated 11 December 2020
ISBN: 978 1 78413 392 4
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. This paper sets out the just transition approach, and its relevance in climate change and energy transition debates.
The circular economy entails keeping materials and products in circulation for as long as possible through practices such as reuse of products, sharing of underused assets, repairing, recycling and remanufacturing. It also encompasses restoring natural systems, designing out waste, and substituting non-renewable materials with biological and renewable ones. The circular economy stands in contrast with the current linear economic model, in which resources are extracted, transformed into products, used, and finally discarded.11 The current linear model is characterized by inefficient use of resources, large amounts of waste, and missed opportunities to retain the value of materials and products.
The transition to a circular economy can make a significant contribution to climate change mitigation, and is essential for reaching the goal of the 2015 Paris Agreement to limit global warming to 1.5 degrees above pre-industrial levels. A study by Material Economics suggests that in an ambitious scenario a more circular economy has the potential to reduce global carbon emissions by up to 3.6 billion tonnes CO₂ per year by 2050.13 Up to 70–80 per cent of these circular abatement opportunities would be additional to those already addressed by existing climate policy approaches.14 Similarly, a joint report by Material Economics and the Ellen MacArthur Foundation argues that the adoption of circular strategies in four key sectors – steel, cement, plastics and aluminium – could decrease global emissions from key industry materials by 40 per cent by 2050.15
The circular economy can be an engine for economic growth, job creation and value-addition.16 Indeed, several studies suggest that the shift to a circular economy will generate net employment gains, with new jobs created mainly in recycling, rental and repair services, remanufacturing, secondary material production, and the sharing economy.17 The International Labour Organization (ILO) estimates that a net growth of 6 million jobs globally can be expected by 2030, notably in waste management and recycling, and the services sectors, repair and renting models.18
The ILO estimates that a net growth of 6 million jobs globally can be expected by 2030, notably in waste management and recycling, and the services sectors, repair and renting models.
The transition to a circular economy may, as a result of reduced dependency on virgin material resources, mitigate geopolitical supply risks, resource scarcity risks and imbalances in global markets19 created by the current linear model. So-called ‘linear risks’ for businesses and countries include reliance on scarce and non-renewable resources. One example is phosphate in food production: here, there are concerns about the current rate of use exceeding absolute global stocks, with the domestic supply of countries including the US, China and India set to run out within the next generation.20 Other linear risks are the perpetuation of business models of planned obsolescence, and prioritizing sales of new low-quality products with short lifespans, failure to collaborate with other value chain actors, and the inability to innovate or adapt. The need to avoid these risks presents strong arguments for businesses to support the transition to a circular economic model.
However, in the context of international development, the contribution of the circular economy is less clear. It is essential for reaching several of the economic and environmental goals of the 2030 Agenda for Sustainable Development, in particular Sustainable Development Goal (SDG) 6 (Clean Water and Sanitation), SDG 8 (Decent Work and Economic Growth), SDG 11 (Sustainable Cities and Communities), SDG 12 (Sustainable Consumption and Production), SDG 13 (Climate Change), SDG 14 (Life below Water) and Goal 15 (Life on Land).21 Circular economy practices are of particular relevance to solving the global waste crisis, which disproportionately affects the populations of low- and middle-income countries, where at least 2 billion people still do not have access to solid waste collection.22 However, the circular economy does not automatically address social goals such as SDG 2 (Zero Hunger), SDG 5 (Gender Equality) or SDG 10 (Reduced Inequalities). Specific targets under SDG 8 on creating decent work and encouraging formalization of employment are highly important social issues linked to the circular economy transition. Furthermore, achieving the transition to a circular economy will depend on achieving important goals such as a SDG 4 (Quality Education) and SDG 16 (Peace, Justice and Strong Institutions) and SDG 16 (Partnerships for the Goals).
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Direct positive contributions through circular economy |
Gaps in addressing social dimensions in the circular economy |
Requirements to enable circular economy transition |
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SDG 1 (No poverty) |
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SDG 2 (Zero hunger) |
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SDG 3 (Good health & wellbeing) |
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SDG 4 (Quality education) |
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SDG 5 (Gender equality) |
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SDG 6 (Clean water and sanitation) |
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SDG 7 (Affordable and clean energy) |
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SDG 8 (Decent work and economic growth) |
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SDG 9 (Industry, innovation and infrastructure) |
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SDG 10 (Reduced inequalities) |
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SDG 11 (Sustainable cities and communities) |
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SDG 12 (Sustainable consumption and production) |
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SDG 13 (Climate change) |
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SDG 14 (Life below water) |
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SDG 15 (Life on land) |
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SDG 16 (Peace, justice and strong institutions) |
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SDG 17 (Partnerships for the goals) |
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The need to ensure that the circular economy will be socially inclusive and that it can deliver on the broader sustainability objectives of the SDG agenda underscores the critical need to take the just transition approach.
