How can Europe export its circular economy model?

It is clear that the 2030 Agenda will not be achieved without a more circular economy. If all citizens of the world were to have the same consumption patterns as European citizens by 2050, the resources of two planets would be needed. Ensuring sustainable consumption and production patterns - through a circular economy - will have positive knock-on effects for a number of Sustainable Development Goals (SDGs).

Last week, we organised a consultation together with the European Investment Bank (EIB), United Nations Industrial Development Organization (UNIDO) and Tearfund to explore the risks and opportunities for developing countries moving towards a more circular economy and the role the European Union could play in its global diffusion. This event comes at a time when the European Union is developing its own circular economy package as part of a new industrial strategy.

Last week also saw Eurostat publish its first monitoring report on the SDGs, with interesting findings on the EU’s performance on SDG 12 on ensuring sustainable consumption and production patterns. The issue of pollution and waste, especially plastics, is also rising up on the international agenda. This year the G20 adopted an action plan on marine litter and many developing countries are taking action, starting with a ban on single-use plastic bags.

Notwithstanding, a lack of research exists in terms of assessing the potential benefits of the circular economy for developing countries.

It is clear that d
eveloping countries do not gain full benefits from the linear economy; almost 80% of resource-driven countries have a per-capita income below the global average. Conversely, they have large quantities of waste brought in from developed countries; more than 90% of discarded computers from the developed world are exported to developing countries such as Ghana, Pakistan, and India. Developing countries fortunately produce far less waste than industrialized countries. A region such as sub-Saharan Africa is responsible for only 5% of the world’s waste while OECD countries produce almost half of it. However small in comparison, waste in developing countries constitutes a major source of pollution, with adverse health, economic and environmental impacts.

Many poor people in developing countries also depend on the availability and access to natural resources for their livelihoods and wellbeing. For instance, the rural poor are the most immediately and directly affected by the continuing loss of environmental quality and the degradation of ecosystems caused by over-extraction of resources. Making a more effective use of natural resources could help reduce pressures on the environment and natural capital.  A transformation of the waste sector would also have implications for the world’s urban poor, as they represent a significant proportion of the waste sector’s workforce.

With its circular economy package, the EU could become the world leader in terms of innovation, with the creation of new technologies, supply chains and businesses linked with the circular economy. Benefits for developing countries could include:

  • A reduction in the illegal export and waste dumping from the EU, with major health and environmental benefits;
  • Thanks to Foreign Direct Investment, Public Private Partnerships and technology transfer from the EU, leapfrogging in areas such as waste collection and recycling performance, strengthening the repair and refurbishing sector, and building resource efficient agricultural value chains;
  • Active participation in Europe’s circular economy by becoming a service provider (rather than the exporter of primary resources), by playing a role in the secondary raw materials sector, or by contributing to the EU’s recycling and repair economy;
  • Building on the above, lessening the degradation of the environment and natural capital, thereby safeguarding the underpinnings for poverty reduction and sustainable development.

However, positive impacts on developing countries might not materialize if EU’s approach leads to:

  • A “circular island of circularity in an ocean of linearity” outside of Europe;
  • Barriers preventing the diffusion of circular economy technologies (issue of cost and intellectual property);
  • A spaghetti bowl of standards pushed by lack of compatibility between the approach of the different economic blocks (e.g China);
  • A lack of attention to employment impacts or the need for inclusion strategies in developing countries.

Based on projects presented by UNIDO, EIB and Tearfund, participants in last week’s discussion reflected on what it would take to bring about change at scale. This includes:

  • Ensuring that the circular Economy is designed to deliver a greener economy in the developing world, taking into account differential impacts on countries (e.g. countries depending on exports of raw materials) as well as its impact on other key sectors for developing countries, such as agriculture and tourism.
  • Creating an enabling policy environment by supporting the adoption of new regulatory frameworks in developing countries, by ensuring that European’s circular economy package takes into account needs of developing countries, e.g. on eco-design and by exploring venues for a global harmonization of standards.
  • Doing more research, especially on ways to ensure that the poorest members of society –including waste pickers--could benefit from a circular economy in developing countries, through better working and salary conditions.
  • Creating demand for more circular economy projects, among governments—both donor and recipient and within the private sector and civil society, by raising awareness and tailoring financial instruments to needs, both in terms of volume and quality.
  • Raising awareness among consumers –in developed and emerging economies- to influence their own demand of greener products and services.

The EU has a unique opportunity to use its circular economy model work to support developing countries. A global move to a more resource-efficient global economy, under EU’s leadership, would represent a major contribution to the realization of SDG 12 and other linked SDGs, including SDG 2, 6, 11, 13, 14, 15.

Listen to our interview podcasts from the EESC event on circular economy and the SDGs: