Circular Economy

Landmark study shows the circular economy can halt biodiversity loss

circular economy - burnt land is pictured next to a palm oil plantation after fires near Banjarmasin in South Kalimantan province, Indonesia, September 29, 2019.

A circular economy can help halt biodiversity loss. Image: REUTERS/Willy Kurniawan.

Tim Forslund
Circular Economy Specialist, SITRA (Finnish Innovation Fund)
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  • Biodiversity loss is so high that species are becoming extinct at a rate not seen since the last mass extinction 66 million years ago.
  • A new report from the Finnish Innovation Fund Sitra shows that global biodiversity loss can be halted by 2035 with a circular economy.
  • Key ways to halt the decline of nature and help it recover include design of circular substitutes for key commodities, waste reductions and uptake of regenerative principles.

Thousands of species become extinct every year – at a rate close to a thousand times higher than the natural extinction rate. Biodiversity loss is so high that species are becoming extinct at a rate not seen since the last mass extinction 66 million years ago. The situation is serious because our health, economy and well-being are all utterly dependent on nature and the services it provides. Unless swift action is taken, biodiversity loss could even come to eclipse the climate crisis in years to come.

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The tide can be turned – but only if we first halt the decline by tackling the problem’s root causes: how we make and use resources. Until today no study has attempted to quantify the potential a circular economy can play in tackling global biodiversity loss. A new study explains the role the circular economy could play.


Understanding the circular economy and its link to biodiversity

In today’s linear economy, 90% of land-use related biodiversity loss is caused by the way we extract and process natural resources to make the things we want. In this wasteful economy, many things are only used once and are then discarded. We formed this economic model. We can also transform it.

In a circular economy, we design out waste. Things are made to last and remain in active use in the system for as long as possible, giving us more value from what we have. This reduces the need to extract natural resources and leaves room for nature to thrive.

To analyse and quantify the potential for the circular economy to halt biodiversity loss, the Finnish Innovation Fund Sitra teamed up with Vivid Economics to conduct this new study: Tackling root causes – Halting biodiversity loss through the circular economy. In it, an ambitious but plausible circular economy scenario was created for four sectors which have the largest impact on biodiversity loss and in which circular interventions can make a tangible dent. These sectors are: food and agriculture; buildings and construction; textiles and fibres; and forests. The scenario can halt biodiversity loss by 2035 even if no other action is taken.

Figure 1. The food and agriculture sector makes the greatest contribution to biodiversity recovery. Source: Vivid Economics.
Figure 1. The food and agriculture sector makes the greatest contribution to biodiversity recovery. Source: Vivid Economics.

Three actions to halt biodiversity loss

According to the research, a transformation is needed across all four sectors. The largest contribution comes from the food and agriculture sector, and there are three shifts of particular importance.

1. Design circular substitutes

The largest share of biodiversity loss is land-use-related, and approximately 85% of this loss is tied to the extraction and processing of biomass – from food to wood, textiles and other bio-based materials. In particular, food and agriculture is the single largest sector driving biodiversity loss, in no small part due to the expansion of meat and dairy production, which uses up 77% of agricultural land according to Food and Agriculture Organization data.

The study finds that the single most impactful action for halting biodiversity loss is to diversify protein sources away from animal-intensive proteins to food design that is less wasteful and polluting, enabling a reduction of meat consumption by half and of dairy consumption by two-thirds. This could free up 350 million hectares of agricultural land by 2050 – an area larger than all of India – leaving more room for nature.

The design of alternative proteins presents a massive business opportunity, and this market could create 30 million jobs globally by 2030. Europe currently relies heavily on imports of proteins, and in the wake of the Russian invasion of Ukraine, the European Commission has backed the creation of an EU strategy on proteins. China’s 14th five-year-plan, published in January, also includes references to “synthetic proteins”.

2. Reduce waste

Globally, 28% of fields are now used to produce food that is lost or wasted. Many circular solutions focus on giving us more value from what we have and minimising waste along the whole value chain, thereby reducing the need for fast-expanding farmland.

Certification schemes for sustainable food products, such as ecolabels for organic alternatives, are important, but they can only go so far if the overall demand continues to increase. A circular economy also complements such efforts by minimising waste and reducing the total load on the system. The solutions can be found from farm to fork, for example by valorising “ugly products” usually left on the field, through supermarket initiatives which freeze or process nearly expired produce into products such as juice, and by AI-powered applications which help chefs track and cut waste.


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The study finds waste reductions to be the second most important action for halting biodiversity loss, freeing up 146 million hectares of agricultural land – an area as large as Ukraine, Belarus, Poland, Hungary and Moldova combined.

3. Drive regenerative outcomes

The circular economy can on its own halt biodiversity loss by reducing the demand for land. More than that, the study also shows that it can help biodiversity recover to 2000 levels by 2035. In part, this positive trajectory is made possible as fields, grasslands and forests are regenerated.

Regenerative agriculture includes no-till methods, crop rotation, polyculture, precision agriculture and agroecology principles. Such a system builds resilience and reduces exposure to polluting and unreliable inputs, allowing nitrogen inputs onto croplands to be reduced by 20%, nutrients to be retained on the fields instead of polluting adjacent ecosystems, topsoils to be rebuilt and carbon to be sequestered, safeguarding the well-being of future generations. Together with waste and substitution efforts, regenerative agriculture could reduce the sector’s methane emissions by 90%.

Figure 2. Hierarchy of biodiversity actions in line with a circular economy. Source: Sitra, based on the Science Based Target Network’s action framework ARRRT.
Figure 2. Hierarchy of biodiversity actions in line with a circular economy. Source: Sitra, based on the Science Based Target Network’s action framework ARRRT.

The Science Based Target Network’s ARRRT (avoid, reduce, restore and regenerate, and transform) Framework stresses that actions should first avoid and thereafter reduce impacts before pursuing regenerative and restorative outcomes. This hierarchy provides important guidance to steer action. However, as many species are also dependent on agricultural landscapes managed according to regenerative principles, these should not be underestimated. The study finds that 10% of the circular scenario consists of circular principles applied in areas under production, in agriculture and forestry.

Time for action

Our time and resources are limited. More worryingly, both are running out – at a time when geopolitical tensions risk hamstringing progress toward a global circular transition, which depends on trade and investments, common standards for circularity and rapid dissemination of the leading circular innovations – and yet we need ever-swifter action to tackle our planetary crises.

The good news is that many of the solutions are already right in front of us – circular solutions that make business sense and which tackle many of our planetary crises at once, from biodiversity loss to climate change and pollution. The market for alternative proteins has been growing at a fast rate for the last few years and it is set for even faster growth as increasingly sophisticated designs reach mass market. At the same time, more and more countries have set ambitious targets to prevent food waste, while the interest in regenerative agriculture has increased tenfold in just 10 years’ time.

This momentum needs to be harnessed and ramped up further. Only through an effective interplay of increasingly ambitious policies and bold circular business innovations can we speed up the transition to a circular economy. Only then can our planet at last begin to recover.

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Circular EconomyNature and Biodiversity
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