Towards an inclusive global agenda for the circular

economy
Felix Preston

…
Circular economy – a cross-cutting opportunity

Chemical
industry
Energy
Building &
construction
Agriculture Transport Transport
Industry
Energy Building & Chemical
Transport construction industry
Design
Mining &
quarrying Retail Consumer
Consumer

Raw materials Manufacturing Distribution Use End of Life

Reduce
Repair

Reuse

Remanufacture

Recycle

Adapted from a diagram by InnovateUK

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Little doubt Circular Economy is a large-scale opportunity

“… could generate a net economic benefit of €1.8 trillion for Europe by

2030.” (McKinsey)

“…could save European manufacturers $630 billion a year by 2025.”

(Ellen MacArthur Foundation, 2014)

“…could create 3 million extra jobs by 2030 and reduce

unemployment by 250,000” (WRAP, 2015)

Major companies have made commitments to shift towards more

circular models, e.g. EMF supporters:

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Circular Economy is gaining traction around the world

Including in a growing number of 4

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developing and mid-income countries
Supply insecurity or unreliable markets?

© AFP

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Many countries intertwined with waste flows!

Global trade in ewaste

Chatham House | The Royal Institute of International Affairs Source: ISWA (2014 data from comtrade) 
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 China green fence 2.0 – turning a crisis into opportunity?

Chatham House | The Royal Institute of International Affairs Image © AFP in the FT, Jan 18
 A NEW DEVELOPMENT MODEL?

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A new industrial development model?

Shelter Food Waste Mobility 9

Q1: A competitive advantage?

Lower- and middle-income economies are more ‘circular’

than their counterparts in the developed world. A higher share
of economic activity revolves around repairing and reusing or sorting
waste.

This more ‘circular’ behaviour is often born out of economic necessity.

But the presence of widespread existing practices and skills raises an
important question: could developing countries have a
competitive advantage in some areas of the CE?

Reusing and recycling textiles is an example of activities that are more

economically viable where there is an abundance of low-cost
labour, as is the case in many developing countries.

The CE opportunity looks all the more promising in the developing

world, given that the traditional path to industrialization and
development is being undermined by automation.
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Q2: (better) jobs?

New jobs are also being created as waste streams shift or new
business models emerge. In Kenya, an e-waste recycling scheme is
estimated to have created over 2,000 jobs within four years of its launch.

Many are employed already in waste management, often

informally – an opportunity for some and a displacement for others? In
India, 1.5 million people are estimated to be involved in informal waste
management.

Concern that CE will have negative impact on resource intensive

sectors. China in the process of retraining and relocating coal and steel
industries.
Questions
• Are these jobs more or less secure?
• Do these employment opportunities
offer a path out of poverty?
• What strategies for the transition from
informal to formal? Liam – Apple’s robot for disassembly

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Q3: Digital leapfrogging?

The digital revolution lies behind

most of the advances in the
circular economy. This is far from
an OECD trend…

While connectivity is spreading

rapidly through lower-income
countries, the ‘digital divide’
remains a major problem.
60% still have no access to the
internet.

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 ALIGNING WITH THE
SDGS

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Understanding interlocking goals

• Overall resource • New business

consumption models
• Acute resource challenges • Efficiency savings
• Enhanced supply chain • New products
resilience
Resilience to Value creation
resource and
pressures competitiveness

Socio-economic Deep
• Health – e.g. via reduced benefits decarbonisation
• CO2
open burning
valorisation
• Job intensive activities
• Alternatives to
• Regional distribution and industrial
inequality processes

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What’s in a name?

“Circular
Economy”
“Sustainable materials in the EU “Circular
management and Economy”
resource efficiency” in in China
“3Rs” in
the US Japan
“Resource
efficiency” in
India

“Sustainable
consumption and
production”

Spectrum of different perspectives

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 Trade-offs (or, why we can’t assume the CE is more sustainable)

Novel ‘biomaterials’ promise

+ Biodegradable
to displace non-renewable
+ Lower GHG emissions
materials in the CE, but need to
consider the embodied emissions
- Large amounts of water needed
and environmental impacts of
- Harsh chemicals used
those new materials – such as
- Wastewater generated
water use in bioplastics.

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Pathways matter

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 TOWARDS AN INCLUSIVE,
GLOBAL APPROACH?

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Avoiding zero-sum politics around the CE

Developing country stakeholders often feel that the CE agenda is a rich country
agenda, and are suspicious that it is a smokescreen for protectionism

But a circular economy does not have to mean a closed world.

International trade and cross border investment and technology cooperation will
play a key role.
• There will be growing markets for CE compatible products – developing
countries are well positioned in labour-intensive activities
• Evidence points to potential for regional hubs of remanufacturing and service
sectors for CE, in the developing world.
• Focus needed on lowering non-tariff barriers, in particular addressing the lack
of clarity on the rules that apply to different waste and secondary materials.

Resource producers have time to transition, given appropriate assistance.

Copper, for instance, may be overtaken around the middle of the century.

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 Co-developing ambitious national strategies

GIZ, InRP, NITI African Development

Aayog, European Bank, GEF 7 examining
Union – Resource how circular economy
Efficiency Strategy can support the
for India industrial development
pillar of its strategy

UNDP, Circle Economy UNIDO Resource

working with Efficient and
Government of Lao Cleaner
PDR on CE strategy Production
Programme in
South East Europe

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0
 Leveraging External Investment – e.g. the case of the EU
€3.35 bn to
Significant EU investments in areas that could have a mobilise up to
sharper focus on CE could be accelerated via the EEIP €44 bn in private
investment
800000000
EIB investment outside of the EU/EFTA
700000000

600000000
EIB Investment (million euros)

500000000
Industry
400000000 Urban development
Solid waste
300000000 Water, sewerage

200000000

100000000

• Innovative finance models to deal with scale and complexity issues

• Coordination often critical

Chatham House | The Royal Institute of International Affairs Source: Authors’ analysis of EIB data, investments from 2015
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Safeguarding accountability and ensuring harmonisation

Paris agreement Agenda 2030

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Building a global, open, inclusive vision for CE

Partners for rules-based CE. Key countries can work

together to expand the markets for CE products – and on
transparency; accountability and data

Deeper dialogues between developed and developing

countries around preparing for regulatory and certification
standards, backed by technical assistance.

Investing in large scale pilots in developing countries,

bringing EU expertise and investment, and promoting policy
innovation

Translating ambitious action at home into opportunities

abroad – in the spirit of an open circular economy.

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Thank you

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