The principles of the circular economy model are to design out waste and pollution, keep products and materials in use and regenerate natural systems. As the below circular economy facts show, moving towards a circular economy will not only help undo the environmental and social damage of the linear economy. But it will also ensure that future generations do not suffer resource scarcity as a result of our consumption habits today.
General facts about circular economy
#1 - Now the Earth takes almost 1.5 years to regenerate what we use in a year. Yet, just about 5% of the remaining value of material goods is recaptured and used when we dispose of the products1
#2 - Currently, our world economy is only 9.1 percent circular, leading to a massive circularity gap1
From time immemorial, humans have depended on the resources available in the natural environment. The earth provides us with raw materials that make quality living possible. Technological advancement has made it possible for humans to extract resources from the planet swiftly, in large quantities. This has resulted in a robust economy but there are downsides.
The prevailing system of production and consumption operates on a linear economy. In this kind of system, products travel along the supply chain once and end up in the rubbish heap. The Ellen MacArthur Foundation dubs it a take-make-waste model.
Linear consumption and production processes lead to the waste of natural resources. Some of these resources are not renewable and those that are, cannot keep up with the rate of human consumption. The circular economy model is a system of production and consumption that aims to reduce waste by innovative design and reuse.
Circular economy facts & climate change
#3 - Economic growth of many countries in Africa, Asia and the Pacific, and the Americas are tied to GHG emissions, material extraction, water, and land use1
#4 - According to the World Bank, climate change results in GDP losses of 7.5% in East Asia, the Pacific, and South Asia1
The destructive effects of global warming are not restricted to extreme weather events and poor food production. It can slow down productivity and widen the inequality gap. Air pollution for instance cuts down short and long-term productivity as it causes health deterioration in workers. According to the ILO, 23 million working lives were lost between 2000 and 2015 due to environmental hazards caused by humans.
Building for the future (or not)
#5 - In 2019 alone, global CO2 emissions embodied in the manufacturing and transporting of construction materials accounted for up to 11% - 23% of global CO2 emissions3
#6 - Construction materials and the building sector account for more than one-third of global resource consumption2
#7 - Construction and demolition waste contribute up to 40% of urban solid waste2
The construction industry is an important sector of the economy. The global construction market was worth about $1 trillion in 2020 and is estimated to reach $1.5 trillion by 2027. The industry helps to meet fundamental housing and infrastructure needs as well as provide jobs. It is one of the key tools nations use to manage growing populations in urban areas.
The industry, however, is operating on a linear economy model and records high energy and resource use. It generates waste and greenhouse gas intensively, and for an essential sector of the economy, it is currently unsustainable.
Circularity in the construction industry will reduce the costs of materials and construction. It will also reduce waste and pollution generated by the industry. Innovative technologies that will change how they source, produce, transport, and use construction materials can make all these possible.
As of 2020, innovations like modular construction for flexible design, fuel, and material substitutes, and digital construction were already in development. According to the world bank, long and complex value chains are a major obstacle in creating a circular construction economy.
We have a long way to go to realize a circular economy
#8 - Solid waste management alone accounts for 5% of global CO22
#9 - 75% of municipal waste solids comprises discarded consumer goods2
#10 - Globally, consumers waste up to USD 460 billion each year by dumping still-wearable clothes in landfills2
#11 - The world generates 49 Mt of e-waste worth USD 63 billion, per year, only 20% is collected and recycled under appropriate conditions2
#12 - According to the Ellen MacArthur Foundation, 80% of household items are used less than once a month2
#13 - 80% of consumer goods waste is burned, landfilled because of poor design and/or lack of end-of-life collection options2
#14 - Freight leads to 20% of urban traffic and causes 50% of urban road transport carbon emissions. It is responsible for 60% of air pollution caused by urban road transport2
#15 - The use of buildings accounts for about 30% of global energy consumption and energy-related CO2 emissions2
Benefits of circular economy
#16 - In China, implementing circular economy opportunities would decrease the consumption of non-renewable resources, including fossil fuels, by 49% in 2030 and 71% in 20402
As this circular economy fact shows in highly industrialized countries like China, access to key consumer products is essential to maintaining a productive workforce. But the current linear economy will lead to scarcity of natural resources and dangerous levels of emissions.
In China, circular methods of production and consumption can help cut back on waste and pollution. Reusing e-waste generated in urban China could bring down the electronic industry’s emission of greenhouse gases by 24 million tonnes by 2030. It would directly reduce particulate matter by 11%.
E-waste reuse in China could also reduce the electronics industry’s dependence on virgin raw material by 14% and save USD 48 billion by 2040.
Good for the planet and the economy
#17 - Circular opportunities for fast-moving consumer goods could amount to USD 700 billion per annum in material savings2
#18 - Recent estimates for the potential from circular economy opportunities in the built environment add £3–5bn annually to GDP by 20362
#19 - In London, peer-to-peer renting, better urban planning, office sharing, repurposed buildings, and multi-purposed buildings increase the value of new buildings and double utilization of 20% of London’s buildings by 2036, saving over GBP 600 million annually2
Employing a new generation of labor working towards a circular economy
#20 - A USD 1 billion investment in public transportation supports 36,000 local jobs in the US2
#21 -The European Commission (EC) estimates that the circular economy directly created jobs that employed 3.9 million people1
#22 - Re-manufacturing of vehicle parts can increase skilled labor requirements by up to 120%2
Reusing materials is beneficial to the economy. Circular economy facts show that recycling one tonne of solid waste pays $101 more in salaries than disposing of it in a landfill.
Using Europe as a yardstick, product reuse can generate a significant number of jobs. Every 1,000 tonnes of municipal solid waste that is reused can provide 80 jobs. About 200,000 jobs could be created if 1% of the EU’s municipal solid waste was collected and sorted.
Sorting 1,000 tonnes of e-waste for reuse could create 15 jobs and training opportunities for 110 people. In Europe alone, reusing 1,000 tonnes of electronic waste could create about 93,00 jobs.
#23 - The ILO finds that changes in energy production can create a net gain of 18 million jobs throughout the world economy1
A change in thinking and systems
#24 - Compact urban development can save 38–50% on upfront costs for new construction of roads, sewers, water lines, and other infrastructure2
#25 - According to the ILO, 23 countries, mainly in Europe, have managed to decouple economic growth from GHG emissions1
When economic activities are freed from environmentally unsustainable processes, the economy can grow exponentially without hurting the planet.
Land use, manufacturing, and mobility play a part in global warming. Buildings produce 30% of emissions in the energy-related sector and 90% of urban city air pollution comes from vehicles.
However, circular solutions like compact housing development can help reduce pollution emanating from densely populated urban areas. Such circular processes will also result in savings on expenditure. The ILO 2degree scenario finds that green job net benefits include a 41% reduction in greenhouse gas emissions by 2030.
#26 - Simple refurbishment solutions can reduce energy consumption by 20–30% in existing buildings2
#27 - Deep refurbishment can cut building-related energy consumption in Europe up to 80%, saving the EU over 30% of its total energy consumption2
Circular economy challenges
#28 - Over 80% of a product’s environmental impact is determined at the design stage2
To reap the full benefits of a circular economy requires a global effort. This is because global supply chains are so intricately connected that consumption and production in one country have material and emission consequences in another. We must break global goals down into strategies that are achievable at local and individual levels.
Manufacturers bear the brunt of the responsibility of creating a value chain. One way they can achieve that is by designing quality products fit for reuse. Consumers also have a role to play as consumer waste takes up a significant part of landfills. Performance-based business models create an incentive for better product design.
Yet, gaining cooperation at all levels across the globe is a daunting challenge to the establishment of the circular economy.
#29 - Many jobs in the EU’s waste management and recycling industry are often low-wage and raise worker safety issues due to exposure to harmful substances1
Jobs in the circular economy produce goods and services in ways that efficiently use natural resources and cause no damage to the environment. These jobs are essential and the workers who do them should be treated with respect and dignity.
These jobs must fit into the framework of the Decent Work Agenda, which is a movement geared towards poverty reduction and inclusive development. Workers in the circular economy should earn a fair income, enjoy job security and have a safe work environment. They deserve social protection and opportunities to express concerns and opinions without fear.
The reality in Europe, however, is that many jobs linked to waste management are low-paying jobs. Also, there are issues of worker safety that need to be addressed. Gender inequality also presents a challenge. Women may not enjoy equal pay or representation in certain industries.
#30 - Many countries have not identified the skills required to transition towards a circular economy, as they lack the capacity to collect this data1
Projections for circular economy
#31 - The ILO projects the net creation of 18 million green jobs by 20301
The green economy shares some concepts with the circular economy, such as renewable energy sources and environmental sustainability. But, while the green economy hopes to make the linear model more environmentally sustainable, the circular economy calls for total change.
The circular economy model will certainly disrupt some businesses. Particularly those that are based on the resource and carbon model. However, job security is not a concern as we find net job creation to increase with the adoption of circular economy measures.
In a 2-degree climate scenario created by the ILO in 2018, a 5% annual growth in the rate of recycling will yield a 0.1% growth in employment, globally. The scenario projects an 11% growth in the employment rate of the renewable energy sector.
Job displacement and replacement
Jobs in the circular economy will benefit the earth and sustain an ethical economy. However, not all sectors of the economy will enjoy job growth with a circular economy. Experts predict job decline in the mining, coal electricity, and petroleum refinery sectors. The good news however is that with help from the government and employers, workers can make transitions into related circular industries with ease.
#32 - The Global Climate Action Summit estimated the creation of over 65 million new low-carbon jobs in 20301
#33 - According to The Club of Rome, full adoption of a circular economy would create more than 75,000 jobs in Finland, 100,000 in Sweden, 200,000 in the Netherlands, 400,000 in Spain, and 500,000 in France by 20301
Circular products and eco-friendly options - by legislation or otherwise
#34 - In 2018, the EU set a target for recycling up to 65% of municipal waste by 20354
#35 - The EU has a target of reducing landfills to a maximum of 10% municipal waste by 20354
In 2015, the European Commission set up an ambitious plan to boost Europe’s transition towards a circular economy. 3 years later, they had fully completed the Circular Economy Plan. The EU maintains its product policies that protect human and environmental health and encourages fuel and resource efficiency. The EU’s product policies also empower consumers to choose sustainable products.
The 2018 circular economy package aims to transform plastic use. It aims to ensure that 100% of plastic packaging in the EU by 2030 is recyclable. It also comprises a framework for monitoring circular economy progress and creating a cleaner relationship between chemicals, products, and waste.
The revised legislative framework on waste entered into force in July 2018. It spells out the EU's packaging recycling target as 70% of packaging waste by 2030.