The Circular Economy, an Element of the Bioeconomy: Could it Revive the 2030 SDG Agenda?
To overcome the plantary triple crisis of evironment, climate and biodiversity the circular economy could become just the catalyst necessary to boost the faltering UN sustainable development agenda.
The bioeconomy is of great importance to a number of sectors. These include the agricultural and food industries, but also the energy sector. Whether as firewood, fuel or biogas - many different energy sources can be obtained from biomass. However, the bioeconomy is not sustainable per se and does not automatically contribute to achieving the Sustainable Development Goals (SDGs). But the use of natural, non-fossil resources should also serve the implementation of ecological and social goals and not have any negative effects. This would require a “circular bioeconomy”.
A circular economy is “central to the bioeconomy”, writes the World Economic Forum on its website, “if it focuses on minimizing waste and maximizing resource efficiency by closing production and consumption loops”. The Bavarian Bioeconomy Expert Council also emphasizes that the “immense global consumption of resources and the growing needs of the world's population ... are already exceeding planetary boundaries” and calls for “a shift towards an economy that is in line with social and ecological principles and is independent of fossil resources. One key to this is the bioeconomy.”
The bioeconomy offers an approach for a fundamental change in the consumption of raw materials and the economy because it “not only focuses on the efficient use of biological resources”, but also on “keeping products and raw materials in cycles”.
The renowned London-based Chatham House recently published a research paper on how the circular economy can support the UN Sustainable Development Goals. With the kind permission of the authors, we are publishing excerpts of the summary .
As concerns rise about the achievability of the 2030 Agenda for Sustainable Development, an opportunity is emerging to promote the circular economy as the solution of the future – and to put the concept at the heart of action on everything from tackling climate change to reducing poverty.
The transformative potential of the ‘circular economy’ in addressing global environmental and social challenges is receiving increasing international attention, with recent interest driven in particular by recognition that the existing UN-led sustainable development agenda is faltering. Until now, the circular economy has been largely peripheral to that agenda, despite featuring extensively in government thinking and having a rising profile as a sustainable alternative to today’s wasteful and polluting economic models. However, with the multilateral policy community considering as a matter of urgency both how to revive stalled progress on the Sustainable Development Goals (SDGs) and what any framework that replaces or extends the SDGs after 2030 should contain, there is an opportunity to embed circular economy principles more comprehensively and formally within the international system.
This research paper has been written with the express intention of contributing ideas to this emerging SDG reset, both at forthcoming events (….. ) and in continuing discussions into 2025 and beyond. We make the case for accelerating and deepening the shift to circular economic models, taking into account the potential trade-offs and unintended consequences that disruptive innovations may bring. The paper underlines the vital role that expansion of the circular economy could play in supporting the SDGs and in shaping what comes after them. (…)
Naturally complementary
At the heart of our argument is the idea that the circular economy and the SDGs are naturally complementary. Prominence in the SDG framework could help the circular economy to reach a critical scale and breadth, which in turn would improve prospects for achieving many of the SDGs’ targets. Linking the two offers mutual benefits. The circular economy needs the imprimatur of the UN system and other multilateral institutions to establish itself globally. At the same time, the circular economy offers the prospect of vastly more effective action on the triple planetary crisis of pollution, climate change and biodiversity loss – precisely the sort of catalyst the UN’s ailing 2030 Agenda for Sustainable Development could use.
A ‘circular economy’ can be thought of as a system designed to deliver social and economic prosperity without requiring unsustainable levels of raw material extraction, consumption or pollution. In simplified terms, a circular economy combines three design principles: eliminating waste and pollution; extending the lifetime of products and materials for as long as possible; and regenerating natural systems. It can entail many different types of activity – ecodesign of goods, ‘product-as-a-service’ alternatives to product ownership, regenerative and restorative farming, and the use of refurbished and second-hand goods are just a few examples. Achieving a circular economy is not simply about recycling more: it requires reorienting and redesigning the fundamental goals and structures of societal provisioning systems (food, transport, energy, shelter) in ways that dramatically reduce raw material and energy consumption.
A robust scientific literature underlines the advantages of circular economic models over today’s predominantly extractive, resource-intensive ones (often described as ‘linear’ by researchers). (1) By some estimates, moving to a circular economy could unlock up to $1.5 trillion in value in just three sectors of the US economy alone. (2) It could help achieve 45 per cent of the global greenhouse gas emissions reductions needed to mitigate climate change by transforming the way products and materials are made and used. (3) It could also restore global biodiversity to its 2000 levels within little more than a decade . Yet without introduction of the circular economy at scale, in contrast, resource consumption could increase by 60 per cent from 2020 levels by 2060, while over half of the 169 targets within the 17 SDGs may be unachievable. (4)
Scale up circular economy
Put another way, the circular economy is becoming too important for policymakers to ignore, all the more so amid mounting concerns about rising global temperatures, the lack of progress on the SDGs, and the world’s failure to meet many environmental targets. Yet the story of the circular economy so far has often been one of modest ambition, localized initiatives, and small-scale or experimental projects implemented incoherently.
As we argue in this paper, the circular economy needs to be both scaled up and globally coordinated. One of the most basic challenges is that not enough circular economy activity is going on: according to one estimate, the global economy is just 7.2 per cent ‘circular’, if measured by the percentage of secondary (i.e. cycled) materials it consumes. (5)
A second problem is the lack of dedicated institutional representation. Whereas the UN Framework Convention on Climate Change (UNFCCC) exists for global climate policy coordination, and the International Energy Agency (IEA) provides a coordinating structure for the energy sector, no equivalent exists for the circular economy. What is needed is a kind of IEA for the circular economy, so to speak: a multilateral body that can champion the circular economy with policymakers and in the UN system, and that can coordinate policy, regulation and standards.
A third problem, partly stemming from the above, is that action on the circular economy remains fragmented at a global level. All countries depend to varying degrees on foreign trade for the materials, goods and services associated with circular activities. Equally, ‘ecodesign’ standards requiring products to meet strict circularity criteria will affect global supply chains, with implications potentially beyond the jurisdictions where such standards are enacted.
However, the basic interconnectedness of the circular economy is not fully reflected in policy. More than 75 national circular economy action plans, roadmaps and strategies have been launched to date (another 14 are in development). These documents have been drafted unilaterally by the countries in question, resulting in a kaleidoscope of around 3,000 rapidly evolving commitments spanning 135 policy areas and 17 sectors. While the amount of activity is a positive sign of rising interest in the circular economy, fragmentation of its operating and regulatory environments risks increasing barriers to trade (for example, when regulations on the export of industrial waste or recycled electronics are incompatible between one country and another).
A fourth concern is that current government practice on the circular economy risks encouraging counterproductive resource nationalism and zero-sum economic competition, hurting resource-poor developing countries in particular and undermining the SDGs. In some cases, the national action plans and roadmaps mentioned above have narrow domestic goals, such as boosting competitiveness against trade partners, supporting the (often politically motivated) reshoring of industry and jobs, and reducing dependence on imported critical materials. Trends towards deglobalization and nationalism increase the temptation for governments to treat the circular economy as an opportunity to assert, or contest, control over supplies of critical raw materials.
* This text is an excerpt of the summary of: Schröder, P. and Barrie, J. (2024), How the circular economy can revive the Sustainable Development Goals: Priorities for immediate global action, and a policy blueprint for the transition to 2050, Research Paper, London: Royal Institute of International Affairs, https://doi.org/10.55317/9781784136222
Dr Patrick Schröder and Dr Jack Barrie are Senior Research Fellows at the privately funded thinktank Chatham House in London
References:
(1) Ellen MacArthur Foundation (undated), ‘What is the linear economy?, www.ellenmacarthurfoundation. org/what-is-the-linear-economy (accessed 29 Aug. 2024).
(2) Ellen MacArthur Foundation and Oliver Wyman (2024), An innovation pathway to decarbonization: circular economy solutions for policymakers and industry in the US, www.oliverwyman.com/content/dam/oliverwyman/ v2/publications/2024/apr/an-innovation-pathway-to-decarbonization-circular-economy-solutions-forpolicymakers-and-industry-in-the-US.pdf.
(3) Ellen MacArthur Foundation and Material Economics (2021), Completing the picture: How the circular economy tackles climate change, emf.thirdlight.com/file/24/cDm30tVcDDexwg2cD1ZEcZjU51g.
(4) Schroeder, P., Anggraeni, K. and Weber, U. (2018), ‘The Relevance of Circular Economy Practices to the Sustainable Development Goals’, Journal of Industrial Ecology, doi.org/10.1111/jiec.12732.
(5) Circle Economy Foundation(2024), The Circularity Gap Report, p.8, www.circularity-gap.world/2024
