DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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24 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS the anaerobic digestion or composting process and back into the soil, will reduce the need for replenishment with additional nutrients. This is the principle of regeneration at work. The circular economy can be an important lever to achieve key policy objectives such as generating economic growth, creating jobs, and reducing environmental impact. Multiple studies have already demonstrated how the circular economy can contribute at a national, regional and supranational level to objectives such as generating economic growth, creating jobs, and reducing environmental impact. While using different methodologies and performed on different sectoral and geographical scopes, these studies have consistently demonstrated the positive impacts of the circular economy: growing GDP by 0.8–7%, adding 0.2–3.0% jobs, and reducing carbon emissions by 8–70% (see Figure 4 and Table 1). Table 1: Selected literature on the macroeconomic impact of the circular economy TNO – The Netherlands Organisation for Applied Scientific Research, Opportunities for a Circular Economy in the Netherlands (2013) 3 This report analyses the opportunities and obstacles that will present themselves as the Netherlands moves towards a more circular economy and makes policy proposals to accelerate the process. It finds that the overall impact of the circular economy in the Netherlands is estimated at EUR 7.3 billion annually, creating 54,000 jobs. The current value of the circular economy for 17 product categories from the metal and electrical sectors is EUR 3.3 billion and that an additional market value of EUR 573 million per year could be achieved. The use of the 34 most important waste streams already represents a value of EUR 3.5 billion. An estimated investment of EUR 4–8 billion in new technologies could create added value of EUR 1 billion per year for the circular economy in the areas of bio-refining, biogas extraction and sorting household waste. Club of Rome, The Circular Economy and Benefits for Society: Swedish case study shows jobs and climate as clear winners (2015) 4 The central theme of this report is how greatly enhanced resource efficiency is a prerequisite for the global economy to stay within the planetary boundaries. It finds that, if applied in conjunction with efforts to increase energy efficiency and the use of renewable energy, organising manufacturing along the lines of a materially efficient circular/performance-based economy in Sweden would lead to an increase in employment of 100,000 (2–3% of the labour force), an improvement in the trade balance of >3% of GDP and a reduction in CO 2 emissions of 70%. Similar studies for the Netherlands and Spain are underway, but were not published in time to be included in this report. Ellen MacArthur Foundation, Stiftungsfonds für Umweltökonomie und Nachhaltigkeit (SUN) and McKinsey Center for Business and Environment, Growth Within: A Circular Economy Vision for a Competitive Europe (2015) This report aims to contribute to the fact base for the discussion around the circular economy from a European perspective. The report paints a vision of what the circular economy could look like in three of the largest and most resource-intensive European value chains: mobility, food systems and the built environment. It compares its attractiveness with the current linear development path, and models European economic and environmental outcomes in both scenarios. The report finds that the circular economy could bring, by 2030, an increase in GDP by 6.7%, and a reduction in CO 2 emissions by 25%. Cambridge Econometrics / Biointelligence Service / European Commission, Study on modelling of the economic and environmental impacts of raw material consumption (2014) 5 This technical report provides a quantitative analysis of different resource productivity targets 3 http://www.government.nl/documents-and-publications/reports/2013/10/04/opportunities-for-a-circular-economy-in-the-netherlands.html 4 www.clubofrome.org/cms/wp-content/uploads/2015/04/Final-version-Swedish-Study-13-04-15-till-tryck-ny. pdf 5 http://ec.europa.eu/environment/enveco/resource_efficiency/pdf/RMC.pdf
DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 25 for the EU using GDP per unit of raw material consumption. The targets range from 1–3% per annum improvement in resource productivity (cumulative 15–30% to 2030). The modelling results suggest that resource productivity improvements of around 2–2.5% per annum can have net positive impacts on EU28 GDP. They also show that with 2% per annum resource productivity improvement around two million additional jobs are created. WRAP and Green Alliance, Employment and the circular economy: Job creation in a more resource efficient Britain (2015) 6 This report looks at how to address the UK’s economic challenges in its use of labour and scarce natural resources. It indicates that in the UK the circular economy could create ~200,000– 500,000 gross jobs, reduce unemployment by ~50,000–100,000 and offset ~7–22% of the expected decline in skilled employment to 2022, depending on whether the development of the circular economy follows its current trajectory or takes a more transformative path. Figure 3: The economic opportunity of the circular economy Complex durables with medium lifespans, EU Consumer industries, global USD billion per year, net material cost savings based on current total input costs per sector USD billion per year, net material cost savings based on total material savings from consumer categories 630 706 Other Motor vehicles Packaged food Machinery and equipment Electrical machinery and apparatus Other transport Furniture Radio, TV and communication Office machinery and computers Apparel Beverages Fresh food Beauty and personal care Tissue and hygiene NOTE: Rough estimates from advanced scenario SOURCE: Towards the Circular Economy 1, 2 by the Ellen MacArthur Foundation CIRCULAR ECONOMY LITERATURE The circular economy concept has deep-rooted origins and cannot be traced back to one single date or author. Its practical applications to modern economic systems and industrial processes, however, have gained momentum since the late 1970s as a result of the efforts of a small number of academics, thought-leaders, and businesses. The general concept has been refined and developed by the following schools of thought, which all treat the economy as a complex adaptive system and draw on insights from living systems especially: • Regenerative design (Prof. John T. Lyle); • Performance economy (Prof. Walter Stahel); • Cradle to Cradle (Prof. Michael Braungart and William McDonough); 6 www.wrap.org.uk/sites/files/wrap/Employment%20and%20the%20circular%20economy%20summary.pdf
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DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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