Fixing the economy to fix climate change

We need a fundamental shift in the global approach to climate change in order to reduce greenhouse gas emissions and meet the targets set out in the Paris Agreement by 2050.

The renewable energy transition is only half the story. If we adopt the circular economy as a way to make and produce materials, products, and food, we begin to see the complete picture of a resilient, net-zero world.

Joining the dots between the circular economy and climate change

The transition to renewable energy is vital if we are to tackle climate change. Yet, with existing technologies, that transition would only address 55% of global greenhouse gas emissions.

These emissions come from the electricity and heat we use in buildings, from our energy system more broadly, and from transport. The remaining 45% of emissions come from industry, agriculture, and land use.

They are a consequence of the way we make and use materials and products, including our food. To eliminate these hard-to-abate emissions, we need to transition to a circular economy.

Industry emits greenhouse gas emissions from chemical processes and from high-heat processes that are currently fuelled largely through the burning of fossil fuels. These emissions cannot be tackled, at scale, by existing renewable energy. 

Meanwhile, agriculture is the second largest contributor to climate change after electricity generation. Food production is a leading source of non-CO2 emissions, such as methane from livestock rearing and nitrous oxide from the use of fertilisers. 

How a circular economy cuts greenhouse gas emissions

1. By eliminating waste and pollution, we reduce the emissions associated with the production of the materials that go to waste.

2. By keeping products and materials in use, we retain the embodied energy in products and materials, instead of producing new materials and products, which generates greenhouse gases.

3. By regenerating natural systems, we store and retain carbon in the soil, where it also helps build soil health.

For example, by eliminating waste in buildings and construction, sharing buildings more, and by reusing and recycling construction materials, we can reduce the emissions from construction materials by 38% by 2050. 

Likewise, shifting to regenerative production practices in agriculture, eliminating food waste, and using better and upcycled ingredients in our food products and menus could halve food system emissions by 2050.   

Making the circular economy happen

The global community has set out to address 17 important and urgent issues by the end of this decade. Known as the Sustainable Development Goals (SDGs), these include responsible production and consumption (SDG 12) and climate action (SDG 13). The circular economy is essential to our ability to meet both SDG 12 and SDG 13, as well as other key targets related to decent work and better growth (SDG 8), industry, innovation, and infrastructure (SDG 9), sustainable cities and communities (SDG 11), life below water (SDG 14), and life on land (SDG 15).  ‍ So, what needs to happen for the circular economy to help companies, governments, cities, and other organisations address climate change and meet the SDGs?

1. Businesses can embed the circular economy in their climate strategies and make smart decisions about how to design and sell products and services. 

2. Governments can set enabling policies and put the necessary infrastructure in place.

3. Investors can mobilise capital towards circular economy solutions.

4. International institutions can put the circular economy on the global climate agenda.

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