Circular Economy

Key to sustainable
development

Long-term sustainable development translates to maintaining economic growth while protecting the environment, and the circular economy is the key to preventing the overconsumption of natural resources while stimulating industry and the economy.

A production and consumption model that involves repairing, recycling, reusing, and keeping existing materials in circulation for as long as possible to both reduce the burden on the environment and the need to mine or otherwise harvest fresh natural resources, the circular economy is a critical component of sustainable development.

The industrial economy has immense volumes of resources that have been cast aside as waste over the course of decades only to be procured anew from the environment instead of recovered from existing products and reused in production. The circular economy, by contrast, aims to get the most life out of resources already in circulation, thereby reducing, if not eliminating, waste.

Figures

According to Circularity Gap Report 2021, the global economy is only 8.6 percent circular despite the immense environmental and economic benefits that circularity entails. As of the same year, humans were harnessing just 5 percent of the value remaining in material goods that had been used and then disposed of. This is despite the fact that the Earth requires nearly 1.5 years to regenerate what humans use in a single year. The solution is to use materials not only more sustainably, but more comprehensively, through recycling, waste reduction, repair, and lifetime extension.

In 2019, the Ellen MacArthur Foundation and Material Economics found that carbon dioxide emissions would be reduced by 9.3 billion tonnes by 2050 if only five key industries, namely the aluminium, cement, food, plastics, and steel industries, went circular, eliminating almost half of all emissions from production – the equivalent of making the entire transport sector net zero.

The World Economic Forum estimates that a circular economy could yield up to $4.5 trillion in economic benefits by 2030 and carry $1 trillion in annual savings on material expenses by 2025. Experts believe that the transformation could create 700,000 new jobs by 2040.

Circular economy
projects

A key premise of sustainability is recognising limitations and adjusting habits to adapt to those limitations. In practice, this means taking what we need and using it to the fullest while nature replenishes itself. Not only has this concept been tried and tested by the Arctic’s indigenous communities over millennia, its necessity in the current global economy was also highlighted during the COVID-19 pandemic, when industries across the world suffered from supply shortages.

The Arctic already has multiple examples of the circular economy in action. Comprised of 80 SMEs, large scale industries, universities, research institutions, and other entities, Finland’s Arctic Smart Industry and Circular Economy cluster focuses on the sustainable use of the Arctic’s natural resources. Its goal is to help industrial SMEs improve their competitiveness and turn circular economy challenges into opportunities.

Based in the Northern Periphery and Arctic regions of Europe and covering bodies of water around Norway, Greenland, Ireland, and the United Kingdom, the initiative Blue Circular Economy (BCE) focuses on the recycling of discarded fishing gear and marine plastic waste. The project covers some of the most distant bodies of water.

Finally, the Arctic Council’s sustainable development working group’s "Zero Arctic" project focuses on developing regional concepts for carbon neutral construction through solutions that lessen energy consumption and greenhouse gas emissions.

It is believed that the transition to a circular economy will occur more rapidly than other shifts in production due to widespread public and political support for companies to reduce their ecological footprint. While the American research and consulting firm Gartner predicts that supply chains will become zero waste by 2029, it is more likely that the circular economy will become dominant by the 2030s.