Everyone is talking about it, but few actually practice it: while the circular economy is now a megatrend (considering the number of articles, reports and debates on the topic increased threefold in the past five years), its popularity is not, however, matched by facts. This is, in a nutshell, the conclusion reached by the Circularity Gap Report 2024.
Now in its seventh edition, the report, presented today by think-tank Circle Economy and carried out in collaboration with Deloitte, confirms the downward trend evidenced last year. The global circularity rate is, in fact, stationary at 7.2 percent, after dropping from 9.1 percent in 2018 (which was the first edition of the report) to 8.6 percent in 2021. Essentially, out of 100 billion tons of materials annually expended by the global economy, only 7.2 percent are secondary raw materials.

Circle Economy researchers therefore decided to shift from theory to practice. They drafted a truly comprehensive roadmap of actions to be put into practice with some urgency to push the circular transition: policies, financial tools and reforms in labor and education.
“In this year's report,” write authors Matthew Fraser, Álvaro Conde and Laxmi Haigh, “we shifted from exploring the what to the how, discovering the alternatives we need to finally change the rules of the game.”

Reading the Circularity Gap Report numbers

As we were already explaining last year, we need to exercise some caution so as not to be frightened (or at least, not more than necessary) by the Circularity Gap Report numbers.
First and foremost, it should be pointed out, in the words of Laxmi Haigh, that “there is much more to the circular economy than simply reusing materials.” The circularity rate calculated by the report, in fact, only gives an account of the amount of secondary raw materials used by global industry, and not of all the strategies implemented in a truly circular economic model. These strategies, used to extend the life of products, include and don't stop at sharing economy, product as a service, reusing, reselling, remanufacturing, repairing, etc.

Second, there are material flows that still elude reliable estimates, such as biomass, which is therefore left out of the Circularity Gap percentage at this time.
Finally, it must be noted that the figure is not recalculated every year, given the actual difficulty of collecting all the necessary information globally: so who knows, next year we might even get a nice surprise.

How to make the global economy circular

That said, the point is that, in the past 5 years alone, humanity has consumed as much as 500 billion tons of materials: essentially the same amount consumed in the entire 20th century.
Clearly this cannot continue, especially since these rates of resource exploitation have already led us to exceed 5 of the 9 planetary limits, defined by Johan Rockström as the threshold not to be crossed to ensure humanity's survival.

Circle Economy researchers then rolled up their sleeves and laid down a set of realistic measures, modeled on the needs of countries with different levels of economic development, to give a boost to the circular transition. There are political measures, such as the adoption of international certifications and standards for product circularity and sustainability, the promotion of Right to Repair, the adoption of EPR (extended producer responsibility) schemes, and debt cancellation or relief for developing countries; financial measures, such as revising taxation to “reward” circular products and practices; and labor sector initiatives, such as the promotion of green jobs, training and reskilling, and the framing of informal work.

The most impactful sectors

Focused on are the three most impactful macrosectors: food system, construction, and manufacturing.

The food system, in addition to feeding humanity, also employs 50 percent of the global workforce. However, as the report points out, it has some major sustainability problems. For starters, it is the biggest cause of biodiversity loss, and a quarter of freshwater resources are lost to food waste. In addition, the livestock sector alone uses a quarter of the entire available land, practically as big as two Americas.

Construction and the built environment in total, on the other hand, generate about 40 percent of climate-changing gas emissions. Extraction of minerals for construction is responsible for 25 percent of land use change, and construction and demolition processes globally consume one-third of all raw materials.

Finally, the manufacturing sector (ranging from textiles to automotive) is linked to deforestation and the release of hazardous wastes and chemicals into the environment, in addition to climate-changing emissions and energy and water consumption.

Circularity tailored to all

The Circularity Gap Report authors are keen to point out that, for the first time this year, people are “put at the heart of the story.” “To ensure that the transition to a circular economy is just and fair, circular solutions must be designed with the world's most vulnerable populations in mind, to reduce inequalities across the workforce and increase opportunity worldwide,” says Ivonne Bojoh, CEO of the Circle Economy Foundation.

Thus, the suggested solutions are not “one-size-fits-all,” but rather shaped according to the levels of development and needs of different countries, divided by Circle Economy researchers into between broad categories: Shift Countries (countries in transition), Grow Countries (growing economies), Build Countries (countries still building their own economies).

Shift Countries (such as the European Union, UK, USA, Japan, Canada, Australia) are the biggest contributors to exceeding planetary limits. With a population that accounts for 17 percent of the global population, they produce 43 percent of emissions and consume a quarter of all raw materials. These countries have reached a point in their development where the acceleration of production and consumption no longer brings any improvement in people's well-being. The challenge for them is to, consequently, drastically decrease the use of materials and resources by shifting to circular consumption patterns.

The Grow Countries (such as China, Indonesia, Brazil, Mexico, Vietnam, Myanmar and Egypt) are the middle-income countries with growing economies that still need to improve the living standards of their people. They account for 37 percent of the world's population and 41 percent of global emissions. Their task, according to the report, will be to stabilize the quantity of materials consumed by adopting circular practices.

Finally, the Build Countries (such as India, Bangladesh, Ethiopia, Nigeria, Pakistan, and the Philippines) are the low-income countries. They are the smallest contributors to the climate crisis (17 percent of emissions) and to the exceeding of planetary limits, despite being home to nearly half of the world's population (46 percent). For these countries, the Circle Economy prescribes, as opposed to all others, an increase in material consumption, which will be necessary to build the infrastructure they still lack. This is essential to improve the health, well-being and, not least, climate resilience of their populations. Of course, for them too, development will have to be guided by circular principles: even if they are still lagging behind, it is good to get off on the right foot from the beginning.

By implementing the policies, incentives and new production and consumption patterns indicated, according to the Circularity Gap Report 2024 we could “reduce material use by a third, leading to a world twice as circular and safer for the planet and all its living things.”

This article is also available in Italian / Questo articolo è disponibile anche in italiano

Immagine: Louis Maniquet, Unsplash