The Circular Economy (CE) aims at re-using resources and reducing waste. It also aims at lowered usage of resources by increasing renewable energy within the energy mix.
As we learned previously, when it comes to reducing global emissions, 55% could be achieved by renewables energy, the rest (45%) of global emission reduction is to be effected by CE strategies.
As important as CE sounds here, there is another aspect in which CE has a significant contribution-in value creation. Are there financially assessable gains or “value creation” stemming from CE?
A big yes.
According to the World Economic Forum, CE can yield around US $ 4.5 trillion in economic benefits up to 2030….
“..Achieving this transition requires unprecedented collaboration given that today, only 8.6% of the world is circular. We have a long way to go..” –www.weforum.org
In that, switching from linear model to CE can reasonably create value close to one fifth of global GDP by 2030. This is also close to the GDP of Japan ($ 4.9 Tr) and even exceeds the $ 4 Tr GDP of Germany (2021)!
WEF advocates transformation of material value chains to increase this quantum. It has identified several such value chains to begin with- Plastic, Electronics, Batteries, Trade, , food and fashion/textiles.
Plastics effect a significant hidden cost by increasing emissions.
“At current levels, greenhouse gas emissions from the plastic lifecycle threaten the ability of the global community to keep global temperature rise below 1.5°C. With the petrochemical and plastic industries planning a massive expansion in production, the problem is on track to get much worse.. Nearly every piece of plastic begins as a fossil fuel, and greenhouse gases are emitted at each of each stage of the plastic lifecycle”- www.ciel.org
Electronics such as smartphones have become a major emission contributor.
According to greenjournal.co.uk, “..the carbon footprint of electronics, including smartphones, is about 3.7% of global greenhouse emissions..”
Batteries, rather the process of manufacturing them, are another major contributor.
“Exactly how much CO2 is emitted in the long process of making a battery can vary a lot depending on which materials are used, how they’re sourced, and what energy sources are used in manufacturing. The vast majority of lithium-ion batteries—about 77% of the world’s supply—are manufactured in China, where coal is the primary energy source..” – MIT Group (climate.mit.edu)
