Posted in GreenBiz
November 12, 2021

Want to fix the climate? Fix the economy

GreenBiz

For the first-time, some of the world’s most influential circular economy actors have come together to urge businesses to consider new ways of designing, producing and consuming goods — and their role in scaling change to meet climate targets.

The U.N. Climate Change Conference, COP26, is hailed as a “make-or-break” moment for the world, one of the last opportunities to get back on track to meet daunting climate goals and sidestep some of the worst impacts of climate change.

And after decades of expert warnings, people are finally paying attention. The number of businesses making climate commitments has quadrupled in just a few short years to 23 percent, leaving many more still to follow suit. As the 26th edition of the “Conference of the Parties” with 197 nations concludes, there’s a unique window to shape our future climate.

In light of this special opportunity, some of the world’s most influential circular economy groups and advocates have gathered for the first time. Consisting of Anthesis, Circle Economy, Ellen MacArthur Foundation, Finnish Innovation Fund Sitra, Global Electronics Council, Metabolic, Platform for Accelerating the Circular Economy (PACE), ReLondon, World Economic Forum, and others, we asked ourselves: if we could deliver one message during this critical time to a receptive audience, what would that be? The answer was simple. Fix the economy, fix the climate.

Resource extraction and use account for 70% of all greenhouse gas emissions, which spiral global temperatures upwards.

The economy’s connection to the environment

At the heart of this idea is the circular economy, an approach to designing, producing and using goods that looks to eliminate waste, circulate materials and regenerate nature. This concept will enable many solutions for the climate, but also for the other interlinked crises of biodiversity loss and over-extraction of natural resources. The circular economy is a framework that addresses all these interlinked crises, while also helping to unlock $4.5 trillion in economic value.

When we say “fix” the economy, we ask you to think about how current economies work. Currently, we take, make and inevitably, waste. Resource extraction and use account for 70 percent of all GHG emissions, which spiral global temperatures upwards. The circular economy is a tool to address these emissions: It allows us to satisfy global needs and wants, such as transport and nutrition, with less virgin material. Reduced demand for virgin materials means less extraction and processing, and consequently fewer emissions, offering a 39 percent reduction in greenhouse gas emissions if the circular economy is enacted globally.

Economic growth — and broken systems

Economic growth is closely tied to material extraction, the use of resources such as water and land use, and overall environmental degradation. In many cases, in the linear economy “growth” itself relies on resource mismanagement and over-extraction, leading to broken economic systems.

But when we talk about “fixes” for the economy, we ask you to think about how heavily economies depend on resources the world has mismanaged and now made scarce. Consider how heavily we depend on our computers and smartphones. These technological tools were critical to keeping economies running during the pandemic. But many precious metals needed to make them are estimated to run out in the next century. Those materials are difficult to mine and recover from existing batteries — especially when one in 10 phones wind up in landfill and phones are not designed for repair. These problems would be troubling enough, but become all the more dire when we consider that materials such as lithium are needed for the batteries that will electrify cars and trucks — and power our much needed energy transition.

The way forward is a system-wide change, a new approach to considering how resources will be managed from the design, to manufacture, to distribution.

How business can drive progress

Nearly half of emissions come from the way we make and use things, including food. Given this reality, businesses have an important role in fixing the climate by re-shaping the economy — rethinking how they innovate and collaborate, and in the process, how they design, produce and distribute their goods. Those efforts will create new jobs and better growth.

The decisions we make to shape the economy can protect our livelihoods and the environment.

By applying circular economy approaches, businesses can become more resilient and profitable by reducing their exposure to costly supply chain disruptions and resource price volatility. In fact, these businesses may attract investors keen to reach net-zero and achieve superior risk-adjusted returns.

As we approach this critical moment for the climate, we will be faced with many statistics, facts and pleas for action, perhaps making us wonder how we can take action. In those moments we can anchor ourselves with one key idea: the economy can be a flywheel for change. The decisions we make to shape the economy can protect our livelihoods and the environment. If we fix the economy, we fix the climate.

This article was written in collaboration with, and supported by, some of the world’s leading circular economy actors: Anthesis, Circle Economy, Ellen MacArthur Foundation, European Circular Economy Stakeholder Platform (ECESP), Finnish Innovation Fund Sitra, Glasgow Chamber of Commerce, Global Electronics Council, Metabolic, The Platform for Accelerating the Circular Economy (PACE) , ReLondon, World Economic Forum.

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