• Research shows the transition to renewable energy can only address 55% of emissions; the remaining 45% comes from producing cars, clothes, food and everyday products.
  • Circular economy models offer a clear pathway to achieving our collective climate goals, tackling emissions tied to extraction, processing, manufacturing and landfilling of goods.
  • Many innovators are addressing today’s challenges, while policymakers are looking at ways to help close the loop on our valuable materials through legislation and incentives.

Leaders across the globe will gather next month for COP26 to collectively accelerate action toward the Paris Agreement and UN Framework Convention on Climate Change.

During a milestone event in 2015, 197 countries signed the Paris Agreement to limit temperature rise to 2°C, with an agreement to aim for a 1.5°C limit. In addition, nearly one-fifth of the world’s 2,000 largest public companies (representing $14 trillion in sales) have committed to net-zero emissions.

So why are scientists, activists and leaders across sectors still worried about the climate crisis? Well, our current policies push us close to a 3°C rise in global temperature. Even our pledges only get us to 2.4°C.

Our reliance on “dirty” and non-renewable energy is a significant contributor to our climate crisis, and a rapid and just transition to renewable sources of energy is critical to reducing global emissions. However, that’s only about half of the answer. Research from the Ellen MacArthur Foundation finds that our transition to renewable energy “can only address 55% of emissions. The remaining 45% comes from producing the cars, clothes, food, and other products we use every day.”

It’s not enough to transition to renewable energy. We also need to tackle carbon emissions tied to the stuff we create, buy, use and dispose of.

—Jessica Long, Managing Director and Chief Strategy Officer, Closed Loop Partners

So, why worry about production and consumption and consider a circular economy instead? Here are seven reasons to keep in mind as leaders and policymakers discuss how to tackle our climate crisis:

We are taking too much

We depend on our planet’s natural resources for sustenance, protection and basically everything we need to survive. But today, we are taking too much:

1. We’re using more than the Earth can provide. Today, we are using about 1.6 earths; meaning we’re using about 60% more of the earth’s resources than it can regenerate every year. By 2050, with an increased global population and a resulting rise in consumption, that “overshoot” could get to 3-4 earths, which is clearly unsustainable.

2. Over-extraction harms people, the planet and economies. Our current linear system depends on extraction – including of rare natural resources – and is responsible for 53% of the world’s carbon emissions and more than 80% of biodiversity loss, according to a study done by UN Environment.

We are wasting too much

In our linear “take-make-waste” economy, we too quickly dispose of products and materials during production and at the end of use. Our reliance on “waste” systems becomes even more challenging as more people enter the middle class and companies produce “fast consumption” products:

3. Our waste is out of control. Today, the world produces over 2 billion tonnes of solid waste, and that’s expected to grow to 3.4 billion tonnes by 2050. About one-third of that waste is not managed properly. By volume, global waste includes 44% food and organics, 17% paper and 12% plastic – all valuable commodities.

4. Landfills are even deadlier than we thought. Why are landfills especially insidious? In addition to taking up otherwise productive land, this explanation from Waste Dive is especially helpful: “When trash is packed into a pile, the oxygen-free environment supports bacteria that thrive in those conditions. As the microbes degrade the waste, they release carbon dioxide and methane. The latter is… 84 times more potent of a global warming agent than carbon dioxide in the first 20 years of its release.”

5. We waste food every day, even as millions go hungry. 22% of global emissions and 30% of energy consumption come from the food sector. At the same time, nearly one-third of all food produced is wasted, and food waste continues to be the top product found in landfills.

Image: Closed Loop Partners

We are tossing money in the trash

A circular economy eliminates the concept of waste altogether, moving us into a more closed-loop system where materials and products are kept in use as long as possible. In doing so, the circular economy tackles some of our greatest social and environmental challenges while unlocking $4.5 trillion in economic value by 2030. Two examples:

6. Tossing textiles. We will throw away 148 million tonnes of clothing each year by 2030. $500 billion in value is at stake by adopting circular fashion solutions, keeping valuable materials out of landfills and reducing our reliance on virgin commodities.

7. The gold in our trash bins. Today we’re throwing away over 50 million tonnes of electronic and electric goods, worth over $62 billion, every year, including rare earth minerals, gold and copper.

A circular economy eliminates the concept of waste altogether, rethinking how we produce and consume. It moves us toward a zero-waste system where throwing away valuable goods is no longer an option.

—Jessica Long, Managing Director and Chief Strategy Officer, Closed Loop Partners

A circular economy creates economic, social and environmental wins

By keeping materials in play, circular economy business models offer a clear pathway toward achieving our collective climate goals, and tackling the greenhouse gas emissions tied to the extraction, processing, manufacturing and landfilling of goods. In doing so, these business models create economic value, building local resilience and spurring innovation. And the good news is that companies championing circular business models are gaining traction, rapidly.

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

Already, there are a plethora of innovators addressing today’s challenges, with companies like Thrilling fostering markets for second-hand vintage clothes, Algramo implementing reusable packaging systems for household staples like detergent, and HomeBiogas turning food scraps into clean energy. Even global corporations like Unilever are on board, with Unilever’s Sustainable Living Brands outperforming other brands in their portfolio. And leading governments and policymakers are looking at ways to help close the loop on our valuable materials through both legislation and incentives.

By seizing the opportunity and momentum seen today to scale a truly circular economy, we can accelerate our pathways toward a sustainable and prosperous future and achieve our collective climate goals.