Estimated reading time 7 min.
At a recent conference on “Climate Change – New Economic models”, the Portuguese Presidency of the Council emphasized an interesting point regarding Europe’s current economic model by boldly stating the model “has no future” (Céu, Gomes, Taylor, 2021). As a part of this high-level conference, the objective was to discuss more transformative ways of rebuilding the economy on the road to recovery from the COVID-19 pandemic. Indeed, if there was ever a moment to reconsider the crossroads between the economy and sustainability, the pandemic would certainly be a fitting time.
One of the major discussions of the conference was the concept of a circular economy. For those unfamiliar with the circular economy, the aim is to create a closed-loop system which significantly reduces the amount of waste, pollution, and resource inputs. Compared with a linear economy that takes resources, makes a product which is later disposed of, and generates more pollution, the process in a circular economy takes each step cyclically by recycling, reusing or remanufacturing products.
The interesting point of the conference is that the European Commission previously adopted the Circular Economy Action Plan (CEAP) within the framework of the European Green Deal last year (EU CEAP, 2020). Moreover, the Action Plan follows from the first CEAP, which launched back in 2015 and covered 54 areas of action. So what are the actions that must be undertaken and where do other actors stand? The following briefly explores these areas of action with a focus on the necessity of global cooperation.
General areas of action
Within the communication on the new Action Plan, the EU presented several initiatives to establish a clear product policy framework which provides sustainable products and services. In the CEAP, the EU prioritized several key product value chains, including for example electronics, batteries, construction materials, packaging, and textiles, among others items (EU CEAP, 2020). Some of these initiatives, such as the Sustainable Products Initiative (SPI), stand out as significant areas focusing on both consumers and producers. The primary initiative of the objective is to slowly phase out environmentally damaging products, while making sustainable products the default for consumers. Moreover, a “right to repair” obliges manufacturers to make repairs on smartphones and laptops more easily repairable by design and addresses the issue of premature product obsolescence. In terms of textiles, the European Commission also aims at implementing a new strategy on greening the textile industry.
Lastly, the CEAP points back to the concept of circularity as a necessary precondition for climate neutrality. As addressed in the Action Plan, the nexus between economics and sustainability is at the center of the crosscutting actions. Thus, one of the central features of this plan is carbon removal strategies for which the Commission aims to develop a regulatory framework for certification of carbon removal.
In addition to priorities in value chains, the CEAP covers specific areas that would produce less waste, while creating more value. The Action Plan points to national and EU led efforts in terms of waste management and laws that have improved levels of waste since the 1970s but require further measures to drastically improve waste efforts. Some of the legislative endeavors encourage progressive substitution of hazardous substances to create a toxic-free environment, establish an EU market for secondary raw materials, and address waste exports from the EU.
Leading on a global level?
Despite the incremental steps forward in the development of circular economies, paying close attention to global efforts is essential in establishing how much traction the concept is gaining and how effective it has been. The EU is clearly mindful of these developments and is currently a driving force behind the Global Alliance on Circular Economy & Resource Efficiency (GACERE) (UNIDO, 2021). Bearing in mind the launch of the Alliance is relatively recent, global cooperation has thus far not been quite as visible. The G7, for instance, previously established the Resource Efficiency Alliance in 2015 and also mandated the International Resource Panel to explore potential guidelines. However, this focused primarily on those countries which are considered developed and less on the potential of developing countries in terms of circularity.
So what do these developments show when looking towards other states such as China or the United States, for example? As early as 2001, China was on the path to developing an ecological environmental strategy, however, there has been very limited external information available for understanding how China has worked toward a circular economy from there. Initially, these policies were industrial ecology agendas, aimed at waste but have slowly transformed over the past few years towards eco-designing. Furthermore, there are foundations for a circular economy in existing Chinese legislation but fewer foundations for external cooperation on the matter (Blériot, 2018). Now compared with the EU, the United States’ efforts are being predominantly led by the private sector and have not had such a robust legislative nature behind them. This might be in part due to the low unemployment rate and moderate growth coupled with the ample space to remove waste and lack of political priority at the federal level over recent years. Yet, ultimately, the interest within the private sector and initiatives by large corporations within various sectors (e.g. the Dow Chemical Company, Dell, Accenture, and Veolia) might be greater catalysts to pursuing circularity. As evidence of this, a comparable impetus occurred in the EU when the Juncker commission considered pushing the concept aside until being dissuaded in an open letter from early private sector adopters, such as Suez, Philips, and Unilever (Blériot, 2018).
Where does this leave us in terms of global cooperation and the initiatives? Having considered the multifaceted nature of a circular economy and those pushing the concept further, it is perhaps unsurprising that the EU is pushing the agenda. Unsurprising insofar as the EU generally acts as a trend setter when it comes to matters of sustainability. Following the most recent GACERE conference, the EU will need to fully support the last action of the CEAP: the monitoring mechanism. This will not only help emphasize the EU is committed to the new Alliance but serve to show how effective a circular economy can be in reducing waste and resource consumption, while providing strong economic benefits and employment. Moreover, the Alliance is expected to be at the forefront of the green transition while only eleven countries (outside the EU) have joined (EU Directorate-General for Environment, 2021). Considering the efforts require multiple inputs, it may additionally be worth involving private companies on a certain level within the Alliance.
Policy Crossroads 