As part of the Paris Agreement, countries are adopting climate pledges–known as Nationally Determined Contributions (NDCs)–to reduce GHG emissions and increase resilience against extreme weather and natural disasters. By ensuring circular economy approaches are embedded into these pledges, countries can accelerate the transition to a low-carbon economy, protect the natural environment, and create green, decent and dignified jobs as well.
According to the International Labor Organization (ILO), if the world implemented more circular activities such as recycling, repair, rent and remanufacture, it would create 6 million jobs globally by 2030.
Challenges
A more circular world is possible, but the transition isn’t a simple one. Several challenges exist.
The first challenge is limited knowledge. Not every country knows about the potential of circular economy or has a strategy in place for creating it. A better understanding of the benefits and impacts of circular economy measures, particularly for climate and biodiversity, is needed.
Businesses, particularly small and medium-sized enterprises (SMEs), as well as other organizations and actors, often struggle to access adequate finance to transition from linear to circular business models or systems.
For example, it is estimated that it takes approximately three years for a smallholder farmer to shift from conventional cotton production to organic cotton production, and shifting to circular, regenerative practices can take equally long, if not longer. This transition, therefore, requires not only adequate investment and finance, but also knowledge transfer, community-building, and training throughout the transition period.
Even if implementing or mainstreaming circular economy practices were easier, assessing their impact may prove to be a challenge. Hence, tracking and reporting progress can often be complex. For example, tracking reductions in “scope 3” emissions (the indirect emissions that an organization or company is responsible for up and down its value chain) presents challenges due to issues such as lack of transparency of supply chains, lack of direct connections with different tiers of suppliers, and complex accounting, among others. UNDP News