More than 100 billion tons of resources enter the economy every year — everything from metals, minerals and fossil fuels to organic materials from plants and animals. Just 8.6 percent gets recycled and used again. Use of resources has tripled (automatic PDF download) since 1970 and could double again by 2050 if business continues as usual. We would need 1.5 Earths to sustainably support our current resource use.
This rampant consumption has devastating effects for humans, wildlife and the planet. It is more urgent than ever to shift from linear, use-it-up-and-throw-it-away models to a circular economy: where waste and pollution are designed out, products and materials are kept in use for longer, and natural systems can regenerate.
A circular economy isn’t just about fixing environmental wrongs, though: Evidence shows it can bring big opportunities and positive impacts across industries, sectors and lives.
A growing number of businesses, governments and civil society organizations are coming together to drive the change through the Platform for Accelerating the Circular Economy (PACE). More than 200 experts from 100 organizations helped develop the Circular Economy Action Agenda, a set of publications that analyze the potential impact and call for action across five key sectors: plastics, textiles, electronics, food and capital equipment (machinery and large tools such as medical scanners, agricultural equipment and manufacturing infrastructure). The Action Agenda demonstrates five opportunities associated with the shift to a circular economy:
1. Make better use of finite resources
The circular economy concept is all about making better use of natural resources such as forests, soil, water, air, metals and minerals.
Take the textiles industry. Each year, huge quantities of fossil fuels are used to produce clothes from synthetic fibers each year. Textile production (including cotton farming) uses almost 100 billion cubic meters of water per year, about 4 percent of global freshwater withdrawal. At the same time, people throw away still-wearable clothes worth an estimated $460 billion each year.
Creating a circular economy for textiles means shifting to recycled and recyclable materials in order to reduce the amount of land, water and fossil fuels used to produce new clothes. It means changing consumption patterns to reduce new purchases and keep clothes in use for longer, for instance by developing the second-hand and rental markets as well as changing the culture of fast fashion. Research suggests that the purchase of 100 second-hand garments can displace the production of 85 new garments. And finally, it means ensuring that clothes at the end of their life are collected and recycled or repurposed into new clothes, further reducing resource use.
2. Reduce emissions
About 45 percent of global greenhouse gas emissions come from product use and manufacturing, as well as food production. Circular economy strategies that reduce our use of resources can cut global greenhouse gas emissions by 39 percent (22.8 billion tons) and play a crucial role in averting the dangerous impacts of climate change.
For example, shifting towards recycled materials would alleviate the need to produce virgin plastics and synthetic fibers, which would significantly reduce fossil fuel use and associated emissions. Changing consumption patterns is also crucial: For example, if the average number of times a garment is worn were doubled, greenhouse gas emissions from the textiles industry would be 44 percent lower.
The world produces around 300 million tons of plastic waste every year, nearly equivalent to the weight of the entire human population.
Creating a circular economy for food by reducing loss and waste is particularly crucial to lowering emissions: If food loss and waste were a country, it would be the third-largest emitter after the United States and China.
Working towards a circular economy helps protect human health and biodiversity in many ways, including by making better use of natural resources (protecting water and land), and by mitigating the climate crisis. One of the clearest and most direct impacts of the shift to a circular economy will come from how we deal with products at the end of their life.
The world produces around 300 million tons of plastic waste every year, nearly equivalent to the weight of the entire human population. This is on top of 54 million tons of electronic waste (e-waste), of which just 17.4 percent gets collected and recycled. This waste becomes hazardous for human health and for biodiversity when it is mismanaged, either leaking into the natural environment or disposed of through open burning, landfills or substandard recycling.
Designing products to be kept in use for longer reduces the amount of waste produced. Creating proper collection and processing systems protects workers and the environment from hazardous materials. For instance, using existing solutions such as replacing plastic other materials, designing plastics so that they can be more easily recycled and scaling up collection and recycling could reduce the flow of plastic waste into the ocean by 80 percent in 20 years — a shift that would be enormously beneficial for human health and biodiversity.
4. Boost economies
Research shows that the circular economy offers a $4.5 trillion economic opportunity by reducing waste, stimulating innovation and creating employment. New business models focused on reuse, repair, remanufacturing and sharing models offer significant innovation opportunities.
For example, a circular economy for plastics offers considerable economic benefits. Less plastic waste in the ocean would benefit industries such as fishing and tourism, as plastic pollution leads to $13 billion in costs and economic losses per year. Reducing the pollution and toxic emissions that come from the open burning of plastic waste would lower healthcare costs, while reducing fossil fuel use for plastic production would help mitigate climate change and its associated costs.
Many of these economic benefits and opportunities are long-term, indirect and require significant investment; a long-term view is key, as are short-term incentives to drive the change. This can include policies that create more immediate financial incentives for businesses to develop innovative new business models and enable the efficient flow of reused and recycled materials across global value chains.
5. Create more and better jobs
Transitioning to a circular economy could create a net increase of 6 million jobs by 2030. Making the most of this opportunity will require a clear focus on social and environmental justice.
Jobs may be lost in more linear businesses; however, new jobs will be created in fields such as recycling, services such as repair and rental, or in new enterprises that spring up to make innovative use of secondary materials. These new jobs cannot be considered direct replacements, as they may be in different locations and require different skills. For instance, we must consider the millions of garment workers — mostly women — whose employment depends on the continuation of the fast fashion industry. Investing in a just transition via social dialogue, social protection and reskilling programs is key.
While a net increase in jobs is important, another value-add of circularity is the opportunity to provide formal work and improved working conditions for informal laborers. Around 15 million people worldwide work as “waste pickers,” salvaging reusable or recyclable materials from garbage. Bringing these informal waste pickers into formal work in collection or recycling is a major opportunity to offer safer, more secure employment.
Maximizing the impact of the circular economy
Of course, there are always trade-offs to be considered and managed when working towards large-scale, systemic change. For example, shifting to bio-based plastics and natural, recyclable textiles such as cotton will use less fossil fuels than traditional plastics or synthetic fibers, but may increase demands for land and water to grow such materials. Shifting to natural materials is a crucial part of the solution, but only if those materials are produced in a sustainable way — and only if consumption habits change, too.
A long-term view is key, as are short-term incentives to drive the change.
It’s also important to recognize the interconnected nature of the global economy. Many minerals and metals used in electronics are byproducts from the mining of aluminum, copper, lead and zinc, which are used across industries. Going circular in the electronics industry alone would not do much to reduce dependence on these resources. Multiple industries must shift to create systemic change.
Finally, it will be crucial to keep social well-being and equity top-of-mind. For example, moving to a circular economy can shift investment and employment away from production and manufacturing (which tends to happen in lower-income countries) and towards later stages of the value chain, such as repair, resale, sorting and recycling (often concentrated in wealthier countries). We’ll need to ensure that economic benefits are equitably distributed to maximize the opportunity of a circular economy.
A role for everyone
The above five impact areas exhibit some of the social, environmental and economic benefits of a circular economy, but realizing these benefits will require ambitious action. Governments, businesses, civil society, finance institutions, research organizations — everyone has a role to play. The new Circular Economy Action Agenda is a good place to start.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
