Society must bridge the circularity gap to fix linear economy failings

A circular economy is one that works for everyone. The world, however, is currently just nine percent circular, meaning the majority of raw materials are going to waste

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More than 90 percent of the raw materials used globally are not cycled back into the economy, leaving a huge circularity gap

The linear economy – or the ‘take, make, waste’ tradition in which the world currently operates – is not fit for purpose. While it has delivered tremendous living standards and wealth for some, fuelling economic growth in the process, the positive aspects of the linear economy have come at a high cost to the planet and many of the people on it. Between 1900 and 2015, the extraction of natural resources increased 12-fold.

Circle Economy’s 2018 Circularity Gap Report revealed the world is only 9.1 percent circular. This means more than 90 percent of the raw materials used globally are not cycled back into the economy, leaving a huge circularity gap and putting a strain on the planet’s natural resources and climate.

European CEO spoke to Harald Friedl, CEO of Circle Economy, to learn more about the circularity gap and how we as a society can bridge it.

What does your Circularity Gap Report set out to achieve?
As well as measuring and monitoring global progress in bridging the gap year on year, our Circularity Gap Report acts as a wake-up call that stimulates action – we can no longer pretend business as usual is possible. At the same time, the circular economy is a business opportunity: in Europe alone, it could create up to three million jobs and net economic benefits of €1.8trn by 2030.

The positive aspects of the linear economy have come at a high cost to the planet and many of the people on it

At Circle Economy, we strive to make this a reality and turn circular strategies into projects on the ground in dozens of cities and within hundreds of businesses. This in turn will help create jobs, reduce carbon emissions and promote economic and social benefits. The circular economy is a real solution that can help us achieve the United Nations’ (UN) Sustainable Development Goals and emission-reduction targets.

How can companies bridge the circularity gap? And what do they stand to benefit?
Companies decide to work with us when they want to close the circularity gap as part of their business strategies. They are often motivated by the fact the linear economy increasingly poses ‘linear risks’, in the form of excessive resource prize volatilities, for example. Businesses are part of this change, as are the cities from which a lot of the drive is coming. In our new ‘city-as-a-service’ model, we explore how circular business models in four areas of societal needs – housing, nutrition, mobility and clothing – can create business opportunities and the circular city of the future.

We have identified four steps that will help bridge the circularity gap through leadership and action. We are now building a global coalition for action, after which we will develop targets and translate them into local pathways for each country, region, city, sector and supply chain. Finally, we must improve our understanding of how different drivers affect the circular transition. The dynamics of international trade, employment, education, training and future skills must also be understood.

Closing the circularity gap will reduce income inequality and improve access to basic needs and opportunities, as well as reduce the strain on the planet’s resources. Major trend corrections are needed and inconvenient truths must be faced if we want to increase the circularity of our economy and planet.

How does circularity link with other debates like climate change and sustainability?
The circular economy is a powerful tool in the fight against climate change, and it is an economy that is designed to meet the needs of the society it serves, not just manage the natural resources it uses.

We are champions of the circular economy. It is a positive, dynamic and interconnected model that embraces and endorses the best humankind has to offer: the power of entrepreneurship, innovation and collaboration. A multitude of stakeholders from the business community, the UN and other international organisations, non-profits, cities and governments have broadly supported the evidence we have presented. If this support and energy is channelled into an action agenda and concrete deliverables, we believe it will change the world.