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Circular economy

Why should countries and regions look to a circular approach to rebuild and transform their economies?




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By 2050, the world will consume resources equivalent to three planet Earths. With an ever-increasing unsustainable consumption of finite resources, rapid and deliberate action is critically needed to respond to this challenge. And yet in 2019, we sent less than a tenth (a mere 8.6%) of all material produced back into the cycle, to be reused and recycled. That is down 1% from 9.1% in 2018, demonstrating progress is not exponential, write Cliona Howie and Laura Nolan.

A circular economy development path in Europe could result in a 32% reduction of primary material consumption by 2030, and 53% by 2050. So what is hindering bold action to achieve these targets?

In March 2020 the EU launched a new Circular Economy Action Plan in response to making Europe “cleaner and more competitive”, with European Commission President Ursula von der Leyen stating that a “circular economy will make us less dependent and boost our resilience. This is not only good for our environment, but it reduces dependency by shortening and diversifying supply chains.” In September, von der Leyen proposed to increase the targets for emission reduction by more than a third on the road to the EU becoming carbon neutral by 2050.

Simultaneously, regional and national governments are fighting the impacts of the Covid-19 pandemic to help rebuild their economies, create and save jobs. A circular economy transition is key to that rebuild, all the while reaching net-zero emissions targets set by the Paris Agreement and recent EU Green Deal to ensure our economy sets a sustainable path for our future.

Commit to a circular economy to secure jobs and financing

A circular economy can create new economic opportunities, ensure that industries save materials, and generate extra value from products and services. From 2012 to 2018 the number of jobs linked to the circular economy in the EU grew by 5%. A circular transition at European scale could create 700,000 new jobs by 2030 and increase the EU’s GDP by additional 0.5%.

A circular economy can boost investments, secure new funding and speed up recovery plans following the pandemic. Regions that embrace the circular economy will be able to harvest funding from the European Union’s 'Next Generation EU' recovery and resilience financing instruments, including the European Green Deal Investment Plan, InvestEU and funds supporting the Circular Economy Action Plan. The European Regional Development Fund will complement private innovation funding to bring new solutions to the market. Political and economic support from the European Union and its Member States to develop local policies in favour of a circular economy is fostering the development of national and regional strategies and tools for cooperation, such as in Slovenia and the Western Balkan countries.


Moving towards systems innovation to accelerate the transition

Today we can see many great single initiatives in cities and regions across Europe. But “conventional approaches will not be sufficient,” the Commission pointed out last December when it published the European Green Deal proposals. Environment Commissioner Virginijus Sinkevičius said “a more systemic change will be necessary to move beyond just waste management and achieve a true transition to a circular economy.”

While existing innovation projects add value to the transition to a circular economy, the challenge we still face is the need to work across many disciplines and value chains simultaneously. This cross-cutting approach requires sophisticated and formal coordination. The transition to a circular economy must be systemic and embedded in all parts of society to be truly transformative.

There is no template, but there is a methodology

People are quick to look at a problem and find an immediate solution. Solutions to single challenges will incrementally improve the current status, but will not help us reach our ambitious goals with the big picture in mind. Furthermore, what may work in one city or region, might not work in another market. “Templates and plans on how to change cities to become circular are a linear way of thinking,” explained Ladeja Godina Košir, Director Circular Change, Chair European Circular Economy Stakeholder Platform. “We have to learn from each other and understand what has worked. We also have to dare to see how each city is unique to develop circular economy models for each city.”

We need mechanisms that can help us learn from others but also cater to unique environments and continually evolving needs. At EIT Climate-KIC, the process we use to do this is called Deep Demonstration. It is a systems designs tool that converts territories and value chains into living laboratories for circular economy and innovation ready for large scale, action-based implementation.

Deep Demonstrations: a transferable methodology

Slovenia is one example among many countries committed to large-scale circular transition, working with EIT Climate-KIC to develop and deliver a demonstration pilot that will tackle entire value chain transformation by leveraging policy, education, finance, entrepreneurship and community engagement. Elements of these experiences are replicable across other European test sites: currently we are working to develop a circular economy transition approach with countries like Italy, Bulgaria and Ireland, regions like Cantabria in Spain and cities like Milan and Leuven, proving that a diverse range of economies can engage and enact transition at scale.

Putting systemic circular solutions in place requires stakeholders to work together across the EU, state, regional and local levels. EIT Climate-KIC is harnessing collective learning across complex issues and challenges, including hosting multiple workshops with actors from industry, administration, NGOs, the public and private sectors, and research and academia.

Leaving no one behind

The main beneficiaries of a sustainable, low carbon transition are the local communities, industry and businesses as well as other stakeholders from different sectors and value chains. It is critical to grant ownership of this transformation and its action plans to all citizens, without which effective transition will not occur. This includes community members, public servants, academics, entrepreneurs, students and policymakers.

This integration of all actors across so many sections of our society ensures that receptive and fluid interface frameworks are built into the portfolio approach. Yet, today policy and fiscal frameworks are designed for a linear economy. By working with public administration and the European Commission to promote multi-stakeholder dialogue, EIT Climate-KIC leverages action across various levels of governance and sectors: if we need to change the entire system, working with one Ministry alone will not cut it. In our ongoing work, we have seen many departments within regions earnest and determined to work together. But when decision makers gather around the table to unpack a complex problem like a circular economy, it is not uncommon to realise there has not been enough time to have the right conversations to coordinate programmes than span several inter-departmental or ministry budget lines. Within our Circular Economy Transition Deep Demonstrations, the Transition Policy Lab works across multiple government bodies to reshape and reformulate new policies that integrate circularity into a new regulatory framework.

A circular economy can lead to sustainable and inclusive societies

Engaging all different communities and stakeholders, as well as providing spaces where anyone can learn, develop and maintain relevant skills, enables citizens to take part and engage in the transitions - ensuring the diverse reality of a region’s population remains in focus.

If at this time of unprecedented societal disruption, Europe’s regions take this opportunity to build more inclusive and competitive circular economy programmes, the compounding benefits will speak for themselves. It means moving from individual technological solutions to a wider portfolio of activity that will stimulate new skills and create jobs, reach zero-emissions and improve access to an improved quality of life. It means working together, in a fair and transparent way. It means identifying and then changing the policies that are stopping systemic innovation from taking place. Through the support of Deep Demonstrations, EIT Climate-KIC is integrating learnings, helping share these learnings and building on best practice and local adaptation to create sustainable and inclusive societies in other markets, regions and cities.

The reward would amplify everything a region has set out to achieve: reach net-zero carbon emissions, enable regions to remain competitive and leave nobody behind.

Cliona Howie has been working as an environmental consultant for over 20 years, supporting both public and private sectors in areas such as conservation, resource efficiency, industrial ecology and symbiosis. At EIT Climate-KIC she is the lead on circular economy development and transition.

Laura Nolan is a stakeholder engagement expert with experience delivering programmes in the fields of climate change, renewable energy and sustainable development. At EIT Climate-KIC she leads on circular economy programme development and manages European projects such as H2020 CICERONE.

For more information contact [email protected]

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