Decarbonization and circularity are often managed by separate teams within an organization, with separate timelines, projects and goals. This can cause competition for internal resources, talent and attention, rather than bringing the necessary pieces together to address interconnected issues.
Stripped to their basics, circularity and decarbonization are both about reducing the negative externalities of our economic system. Even in the fundamental principles of circularity — eliminate waste and pollution, circulate products and materials at their highest value, regenerate nature — we see connections to decarbonization.
Decarbonization, when taken to mean reducing emissions, is embedded in that first principle of circularity. Efforts to remove greenhouse gases from the atmosphere and recarbonize soil and vegetation are inherently circular solutions that help regenerate nature.
Circularity and decarbonization strategies have significant overlap. To uncover some of the links, I spoke to Ke Wang, program director at Platform for Accelerating the Circular Economy (PACE). The self-described "physicist turned sustainability professional" turns the knowledge built by PACE and its partners into circular public-private collaborations across a wide range of industries.
We started by discussing the report "Completing the picture: How the circular economy tackles climate change" from the Ellen MacArthur Foundation. It posits that efforts to improve energy efficiency and transition to renewable energy can only address 55 percent of global emissions. The other 45 percent of emissions come from the sourcing and manufacturing of consumer goods, the development of the built environment, the production and transportation of food and how we manage land.
She described these two sides of global emissions as the "operational energy use" of all the fuels used to power transportation and buildings as opposed to emissions from extracting, processing and manufacturing "the stuff that we use and consume every day."
Circularity has a big role to play in supporting the clean energy transition.
Kori Goldberg: So let’s dive into the operational energy side. How can circularity help address this 55 percent of global GHG emissions?
Wang: Circularity has a big role to play in supporting the clean energy transition. Solar PV, wind turbines, EV batteries — all reduce fossil fuel-based emissions but these technologies are very material and mineral heavy. The International Energy Agency has forecasted that if we are to scale these clean energy technologies at the speed needed to stay within 1.5 degrees Celsius, the total demand for minerals will far exceed today's supply capacity.
The material side is a big bottleneck for the energy transition. So this is where circularity can play an important role. We can reduce the demand for critical minerals and alleviate some of the supply pressure required for the energy transition.
Goldberg: And now the other 45 percent: extracting, processing and manufacturing…
Wang: So if you look at these material-related emissions, this comes mostly from the production of stuff … for example, for some electronics, three-quarters of the emission comes from the manufacturing phase alone.
Circularity kind of boils down to "reduce, reuse and recycle"; all just strategies to reduce societal demand for virgin raw materials and new products. Circular strategies that reduce the demand for raw materials and new products subsequently reduce GHG emissions from production.
Goldberg: What specific circular strategies are called out in the literature as the best avenues to achieve decarbonization targets?
Wang: There are many articles in this space, but most of them can be traced back to just three bigger, more comprehensive reports: one from International Resource Panel; one from the Ellen MacArthur Foundation; and a third from Circle Economy.
Circular strategies that reduce the demand for raw materials and new products subsequently reduce GHG emissions from production.
Well, when we looked into those reports, although they may disagree on the numbers, they do agree qualitatively on which circularity measures have the highest GHG reduction potential. And those are not recycling strategies; those are more upstream measures that focus specifically on consumption patterns, reducing overconsumption and more efficient design.
Upstream circularity strategies can achieve synergistic carbon reductions. For example, reducing total floor area reduces embedded carbon and emissions from heating and cooling; lightweight vehicle design reduces embedded carbon and emissions from fuel usage.
Goldberg: Reporting on circularity is very minimal compared to GHG reporting. But essentially both reporting on circularity and GHG emissions are asking: What are your inputs, where are they coming from? How are they being managed, and where do they go? First off, what makes reporting on circularity so different from GHG reporting?
Wang: First, the indicator itself: For GHG emissions, the indicator is simple and unified — CO2 equivalent. It's one unit that can be used by everybody. That simplifies measurement, comparing apples to apples.
For circularity, it's not so simple...We measure both inputs and outputs in tonnage, but this doesn't say anything about, for example, how hazardous a material is or the scarcity of the material or the carbon footprint. Just simply looking at tonnage, we should prioritize washing machines, right? There's tons of concrete inside. But in terms of value, mobile phones have a lot more critical minerals.
Unlike greenhouse gas emissions, there's a very clear global target on temperature, and also on the total emission budget. And for circularity, we don't have that yet.
Challenge No. 2 is: Unlike greenhouse gas emissions, there's a very clear global target on temperature, and also on the total emission budget. And for circularity, we don't have that yet. There are research groups like the International Resource Panel, which are actually actively working with a large group of scientists on it. But even scientifically, there's no consensus yet of what the target should be.
Goldberg: How have circular metrics changed in recent years?
Wang: Literally hundreds of metrics have been developed. For the past few years PACE has hosted the Circular Economy Indicator Coalition with the intention to help metric developers talk to each other and to see if, longer term, we can consolidate, but we're not there yet. There are so many indicators out there, it can be confusing for companies to choose what to track.
Earlier this year, working with Accenture, we launched circular target-setting guidance for companies. We try to boil down the hundreds of indicators to maybe a dozen, but it's still quite a few compared to GHG emissions. I've seen some companies start using material footprint per EBITA — so, basically, how much material they use, normalized to their profit. That might be a good kind of umbrella indicator.
Goldberg: What does the integration of circularity and decarbonization mean for the likelihood of success for both these efforts? Can connecting these two issues increase the attention and resources given to both?
Wang: This is a need we have spotted at PACE, which has led to a new program called Integrating Circularity with Climate Measures. So we intend to do exactly that. We have observed this siloed campaigning or advocacy between circularity and decarbonization, and we think if we bring the two closer together, we can achieve more.
We still need the science to give more guidance of exactly how and there are efforts in that direction — for example, the Circular Transition Indicator work by WBCSD. They're already in their fourth edition, looking at how circularity indicators can be connected to GHG emissions. There are ongoing active efforts, and hopefully we’ll get there soon enough.