“The global economy is now only 7.2 percent circular; and it’s getting worse year on year, driven by rising material extraction and use”. This is how the Circularity Gap Report 2023 opens, without any attempts to sugarcoat the issue or beat around the bush.
Released during the days of the World Economic Forum in Davos, the study, compiled by think-tank Circle Economy in collaboration with Deloitte, is now in its sixth edition this year, and it does not bring good news. While it was already clear how far the global economy had to go to close the circularity gap, it seems, however, that the world has gone in the wrong direction: from 9.1 percent in 2018, it has dropped to 8.6 percent two years ago, and now to 7.2 percent.
The figure should not be demoralizing, however, and should instead be taken as a sign of urgency. “There is much more to this story than just the number,” Laxmi Haigh, co-author of the report with Matthew Fraser and Alvaro Conde Soria, told us. So we went to see what is behind this 1.4 percentage point loss: the methodological reasons, material causes and possible solutions.
Circularity is declining: why?
The figure to start with is frighteningly round: 100 billion tons. These are the materials that the global economy currently consumes each year; a number that has almost doubled since 2000 and is, unfortunately, on a steady upward trend.
Of these materials, a portion consists of secondary raw materials, which is the fraction measured by the Circularity Gap Report and is now only 7.2 percent.
This figure, for those involved in the circular economy, is frankly discouraging and may suggest that efforts to date are in vain. But it needs to be explained and analyzed. “We first need to talk about the methodology,” Laxmi Haigh tells Renewable Matter, “The percentage had not been updated since 2020 because there was not enough data. In these two years we have improved and refined our measurement methods a lot, including more countries in the research, and this makes the new percentage not directly comparable with the previous 8.6 percent. However, based on the global trends we found, we can say that even with homogeneous data we would still have observed a decline.”
What are then the reasons for this actual negative trend in circularity? “The first cause is the excessive increase in material consumption,” Haigh explains. “Although we hear so much today about the circular economy, there are still very few systems actually implemented to put materials back into circulation. In short, recycling is not keeping pace with consumption growth.”
Then there is the issue of growth of the built environment. “Economically developing countries, what are called Grow countries in the report, such as China, Mexico and Brazil," Haigh continues, "are building an enormous amount of infrastructure. Every five days globally an area equal to the city of Paris is built.” And that means not only that virgin materials are being mined and used, but that those materials will remain stored for a very very long time in buildings, roads, bridges and every other form of built and durable asset, for example, large machinery. This is a big chunk of the materials fed into the global economy: 38 percent, according to the report, and the amount has grown 23-fold since the turn of the century. “In practice,” Haigh concludes, “by not re-entering the production cycle for many years, these ‘stranded’ stocks of materials affect the rate of circularity by decreasing it.”
In short, until we can slow down the consumption of materials, the rate of circularity is bound to decline.
But the circular economy is not just about recycling
If chasing the world’s voracity in material consumption seems like a huge undertaking, however, it should be remembered that recycling is only one option in the circular transition. “There is much more to the circular economy than just reusing materials,” Haigh points out. “The good thing about having a shared metric to measure circularity is that the number has the power to create a sense of urgency. But we can't consider it comprehensive, because it only accounts for one part of the circular economy.”
In the hierarchy of the circular transition, recycling is actually the last option. As the report points out, a holistic circular system should seek to reduce material consumption according to four main strategies: Narrow, which means using fewer resources, whether raw materials or energy; Slow, which means using products, components and materials longer; Regenerate, which means replacing toxic or hazardous materials or processes with regenerative resources; and finally Cycle, which means the actual recycling and reuse of materials.
Another parameter that is left out is the calculation of biomass circularity, that is, all the organic material of animal and plant origin that enters the flows of the food sector, but also of other sectors such as clothing, and accounts for about 25 percent of the material input into the world’s economy. “Unfortunately, as of today the available data are insufficient and unreliable,” Laxmi Haigh explains, “But if we could measure with some accuracy the biomass flows that re-enter the economic cycle (e.g., in the form of soil nutrients such as phosphorus and nitrogen, ed.), the rate of global circularity would certainly increase.”
Finally, it should be kept in mind, as the report's authors point out, that “achieving a fully circular economy is not technically possible,” since, returning to the topic of recycling, most materials can only be reused for a limited number of cycles before their qualities degrade.
Putting a stop to the hunger for matter to fall within planetary boundaries
In short, that 7.2 percent does not claim to fully account for all feasible strategies, thus opening up a vast scope for action, and hope, to close the circularity gap in the global economy.
It is a road that needs to be traveled with some urgency, however, since our unstoppable hunger for materials – as Circle Economy researchers warn – has already led us to cross 5 of the 9 planetary boundaries, i.e., those boundaries that, according to scientist Johan Rockström, we would do well not to cross in order to ensure humanity’s survival on the planet. Instead, we have entered the red zone dangerously in terms of biodiversity loss, chemical pollution, land use, altered phosphorus and nitrogen cycles, and, of course, climate change, while we are on the brink of a crisis over ocean acidification.
The good news, which is perhaps the most important point of the Circularity Gap Report 2023, is that the circular economy can turn the tide and bring us back within planetary limits. Use less, use longer, reuse and produce cleanly: applying the principles of a true circular transition on a global scale could meet people’s needs, and also secure them for countries that have not yet achieved them, by using only 70 percent of the materials we consume today. A very good reason not to beat ourselves up and roll up our sleeves.
Immagine: Greg Rosenke (Unsplash)