The circular economy & carbon reduction targets

We live in a mostly linear economy. We use materials to produce products, and when we’re done using those products we discard them as waste – the “take, make, and waste” system.

In a circular economy, we keep materials and resources in circulation as long as possible, without producing any waste.

Greenhouse gas emissions: a quick overview

Greenhouse gasses (GHGs) are gases which, released in the atmosphere, contribute to the warming of the planet. 

The Greenhouse Gas Protocol – the defining framework for GHGs – divides these emissions into three scopes: Scope 1, Scope 2, and Scope 3.

Scope 1 covers direct emissions that a company generates while performing its business activities. Scope 2 covers indirect emissions from purchased energy, while Scope 3 covers indirect emissions in the value chain. On average, 90% of a company’s emissions come from Scope 3.

Through the Paris Agreement, countries committed to limiting global temperature rise to a maximum of 2°C. 

Reducing emissions is necessary to meet this goal – in any kind of economy.

Reducing GHG emissions & the circular economy

Fewer emissions by design

By its nature, a circular economy will have lower carbon emissions than a linear economy. Producing new materials results in carbon emissions; circular economies minimize the need for producing new materials by maximizing the re-use of resources, thus eliminating the carbon costs of producing new materials.

Put another way: the circular economy attempts to design out waste, and carbon emissions are almost always waste.

An estimate from the 2021 Circularity Gap Report claims that a circular economy could reduce global GHG emissions by 39%.

Supply chain accountability enables targeted reductions

In order to reduce emissions, businesses and governments first need to measure them. The full value chain must be taken into account, including Scope 3, which for many businesses are responsible for the vast majority of emissions.

By analyzing where the emissions are located (Scope 1, 2 or 3), and identifying circular changes like those in production, transportation, and material use, the circular economy can be a catalyzer for reaching the climate targets.

"In using circular strategies, we can reconfigure these supply chains to ‘bypass’ the emissions hot-spots. By swapping out emission-intensive processes …  with processes that extend the lifespan of the material, such as repair, we would reduce the need for excess virgin material extraction and emit fewer GHGs."

• From the 2021 Circularity Gap Report

In summary

• A circular economy keeps materials and resources in circulation as long as possible, designing out waste.

• Greenhouse gases that contribute to climate change are almost always waste products.

• In a circular economy, greenhouse gas emissions are reduced by design, and the focus on supply chain transparency enables targeted emissions reductions.