Pioneers of the future: the countries leading the way with circular economy policy
Circle Economy researchers highlight encouraging progress in several diverse countries
When it comes to the global circular economy, how do we measure progress and who is leading the way? Is it even possible, or worthwhile, to compare countries — and can the metrics we do have really paint the whole picture? Phil Lattimore reports in this cover article from the March/April edition of Circular Magazine.
Global action on the circular economy has been growing over the past decade, and the concept is now established in many countries as a key component in addressing issues such as waste, pollution, resource depletion and climate change. With circularity now part of the conversation at senior government and board levels — as well as among many consumers — it appears progress on circularity is accelerating. When it comes to national action, however, who is really leading the way, and how do we measure how — and where — progress is happening?
The circular economy is based on a fundamentally different concept to the linear model of economic activity with which we are all familiar. The circular economy is, essentially, a production and consumption system that relies on recycling, reuse, repair, remanufacturing and sharing of products — so, by definition, it demands a change in consumption patterns, new business models, and circular systems of production and resource allocation. As a result, our usual ways of judging national economic performance in a linear system — with indicators such as gross domestic product, productivity and inflation rates — are not sufficient or adequate for measuring circular activity.
At the moment, estimates suggest that only 8.6% of the world’s economy is circular. However, assessing which nations are ahead of the pack on circularity is not as straightforward to measure as with a linear economy model.
According to a recent EU eco-innovation action plan, while there is no indicator that can be a single measurement for the circular economy, a number of existing indicators can help measure performance in several areas that directly, or indirectly, contribute to circular economy development.
These involve metrics in areas such as sustainable resource management (lowering resource demands), societal behaviour (engagement, behavioural change and consumption patterns), and business operations (adapting business models to the principles of a circular economy, including material sourcing, design for durability, remanufacturing and recycling).
Helen Burdett is head of circular economy at the World Economic Forum (WEF). She agrees that there are no simple, one-size-fits-all metrics that enable us to definitively rank nations in a ‘circular economy league table’, and that such assessments of circularity require greater nuance. ‘It’s complicated,’ she says. ‘But a lot of smart people are working on it.’ Not-for-profit organisation Circle Economy, for example, has, for many years, come up with a global circular economy metric; the Platform for Accelerating the Circular Economy has a working group looking at metrics; while the United Nations Industrial Development Organisation (UNIDO) is also looking to devise them. ‘One of the challenges is not only about measurement — it is also about identifying the right indicators,’ says Burdett.
It is a broad, dynamic topic, she adds: ‘If we look at policies, metrics, design, reuse and recycling rates, EPR [extended producer responsibility] schemes, business models, and innovation, they each present a complex picture — and there isn’t one easy answer about which nation is “leading the way”. Every actor committed to working on the circular economy is probably leading the way somewhere, and all are contributing to the conversation.
‘So much is being done through partnerships — no one company or government is going to solve this by themselves. The circular economy requires a systemic change, and so much happens at a local scale, as well as at the national or international level.’
This is clearly not only about one or two developed regions, Burdett stresses. ‘Some countries in Europe have been talking about circular for longer, but it’s gaining a lot of traction across the globe,’ she says. ‘For example, here is the African Circular Economy Alliance [ACEA], and the World Circular Economy Forum 2022, to be held in Rwanda later this year, showing how countries are working together on a regional level.’
ACEA is largely public-sector focused, while the Africa Circular Economy Network is more private-sector focused, and they work closely together, says Burdett. Similarly, in Latin America, the United Nations Environment Programme, UNIDO and national governments have come together to create the Latin America and Caribbean Circular Economy Coalition.
Burdett highlights the growing number of national and regional circular economy roadmaps over the past two years, and a significant increase in policies directed towards circularity goals. From the Save Our Seas 2.0 Act — which puts forward a definition of circular in the US for the first time — to the first circular policy that launched last year in the United Arab Emirates (UAE) and Chile’s 2021 circular economy roadmap, the list continues to grow. ‘We’ve seen more and more governments coming up with plans, and those plans can be a precursor to policy.’
Circle Economy methodology
Circle Economy, based in Amsterdam, the Netherlands, aims to accelerate practical and scalable solutions to put the circular economy into action. Recognising the need to accurately measure the circular economy to understand how we can move towards circularity or monitor progress effectively, it developed the first Circularity Gap Report, which was published in January 2018.
Reports have been published each year since, and these efforts have grown into the organisation’s Circularity Gap Reporting Initiative (CGRi). This delivers an annual global circularity metric that measures the state of the world economy and identifies key levers to transition to global circularity.
‘Our consumption-based measurement — which measures all resources, materials and products used to provide for societal needs — extracts a single measurement of circularity that reflects where a country, or the globe, is in its circularity journey. This also produces the Circularity Gap — the measure of materials that are wasted, lost, built into long-lasting stock or not usefully cycled back into the economy,’ explains Matthew Fraser, CGRi lead. The methodology used in its analysis takes the ‘socioeconomic metabolism’ of the country — how resources flow through the economy and are in long-term use — as the starting point for measuring and capturing its level of circularity. It also considers the importance of reducing total consumption, with impact prevention through reduced demand considered an important step to take before exploring other mitigation options in a circular economy scenario.
So, which countries are getting particular traction on their circular activities, and what initiatives, policies or strategies are driving this? While ranking nations in such a dynamic and complex area is problematic, Circle Economy researchers have highlighted encouraging progress in several diverse countries.
The Dutch government’s goal of full circularity by 2050, and 50% circular by 2030, makes it a clear frontrunner in Europe, according to Circle Economy. This includes the interim objective of a 50% reduction in the use of primary raw materials minerals, fossil fuels and metals — by 2030.
Transition agendas for five priority areas of the Dutch economy have been implemented, covering: construction; plastics; consumer goods; biomass and food; and manufacturing. Interventions include an emphasis on resource efficiency, a shift to renewable and recycled resources, and creating new markets and business models.
Complementing this policy with on-the-ground action is a business support network project Het Versnellingshuis Nederland Circulair (The Netherlands Circular Accelerator) — an intervention founded by a collaboration that includes the government’s Ministry of Infrastructure and Water Management.
Amsterdam has also attracted headlines around the world for combining socioeconomic considerations with the circular economy and the adoption of ‘Doughnut Economics’. As part of the circular construction economy, the Netherlands government has committed to ensuring only circular contracts are procured from 2023 onwards (see ‘Sweet spot’ in May/June 2021 Circular).
China was a very early adopter of the technical circular economy, and a leader in driving legislative packages that explicitly targeted the circular economy. As far back as 2006, its 11th Five-Year Plan mentioned the circular economy and, in 2008, it adopted its Circular Economy Promotion Law. Today, according to Circle Economy, the circular economy is presented as a viable economic reform model and as a central building block of China’s vision of a harmonious society. It is centrally planned, focuses on cleaner production, and resonates with industrial ecology principles.
Japan is another early circular economy innovator, with a number of policies introduced since the early 2000s to reduce, reuse and recycle. A densely populated, highly industrial and resource-constrained country, Japan adopted ambitious waste-management policies early. Today, it boasts impressive recycling rates, empowered by a culture of collaboration and continuous industrial innovation. While its policies have not always been explicitly linked to the circular economy, they are a source of inspiration for many practitioners.
Its latest Circular Economy Vision 2020 policy roadmap encourages industries to shift to new business models with higher circularity and to improve resource efficiency. It has also introduced a Resource Circulation Strategy for Plastics, to tackle the waste problem from single-use plastics.
Since hosting COP25, Chile has made great strides in environmental areas and its Roadmap for a circular Chile by 2040, published in June 2021, is an important pillar. It aims to generate 100,000 green jobs by 2030.
WEF global circular initiatives
The WEF is involved in a number of global initiatives to promote the transition to a circular economy, acting as a forum for public- and private-sector collaboration to drive the shift. These include the Platform for Accelerating the Circular Economy, which was launched in 2017 as a platform for public- and private-sector leaders to take commitments and accelerate collective action towards the circular economy. It consists of 80 public, private, international and civil society executive leaders, and more than 200 members, championing 18 projects across the globe since early 2019.
The WEF also hosts a series of major value chain action partnerships that work along global material value chains to advance circular models — from plastics (Global Plastic Action Partnership), electronics (Circular Electronics Action Partnership), batteries (Global Battery Alliance) and cars, to fashion and textiles. In addition, it has launched initiatives such as Scale360°, which aims to mobilise action among innovators, governments, civil society and private-sector stakeholders to grow the ecosystem for circular fourth industrial revolution technology innovation, with a focus on plastics, electronics, food, and fashion and textiles.
The WEF’s Circular Economy for Net Zero Industry Transition initiative aims to raise the decarbonisation ambition for harder-to-abate materials — steel, cement, chemicals and aluminium — and help those industries realise a 1.5-degree pathway by catalysing scalable circular economy solutions, taking in stakeholders from the material supply side and key demand-side industries to facilitate collaborations along value chains on circular economy solutions.
At a governmental level, Burdett believes the approach an administration takes towards integrating a circular strategy within government itself will have a direct impact on how effectively it can develop and implement policy.
‘In some, the ministry of the environment owns the circular economy topic, while, in others, the topic is prioritised by a ministry of economic affairs equivalent,’ she says. ‘Where it fits for a particular country can make a difference to how the topic is addressed.’
Burdett points to an example, in the UAE, of how an integrated approach can be most effective: ‘The WEF’s Scale360° circular innovation initiative’s national advisory board became the UAE Circular Economy Council, where there are now four ministries involved, in addition to private sector leaders.’
Burdett also gives an example of how regulations can impact on how materials are allowed to be used in the design of remanufactured products. ‘In Chile, another Scale360° initiative hosted co-creation sessions with leaders from the largest industrial corporations to identify 150 opportunities for industrial symbiosis,’ she explains. ‘Surfaced opportunities included solutions such as redirecting mining tyres and pork [meat] slurry into asphalt production, and replacing construction aggregate with copper slag. In studying materials inputs and outputs, a new challenge emerged: some outflow materials that could become inputs in another industry cannot be reused because they are classified as waste.’
This, again, highlights the importance of partnerships across the public and private sectors to ensure a more joined-up approach to initiatives and policies to foster circularity. Burdett also emphasises the importance of action on a smaller scale, as well as at global, regional and national levels: ‘Working together internationally doesn’t negate the need for local action.’