Circular economy strategies can cut global greenhouse gas emissions by 39% and play a crucial role in avoiding climate breakdown, reveals a report from impact organisation Circle Economy launched today during the World Economic Forum’s virtual Davos Agenda Week. The Circularity Gap Report finds that the 22.8 billion tonnes (Gt) of annual emissions associated with creating new products from virgin materials can be eliminated by applying circular strategies that drastically reduce the amount of minerals, fossil fuels, metals and biomass consumed by the world’s economy.

‍It finds that changes to the ways we construct and use houses, commercial and industrial buildings can achieve half these savings. Changes to how we travel and transport goods and the way we feed ourselves account for most of the rest. The report also offers strategies tailored to countries at different levels of development as they plan to stimulate economic recovery from the Covid pandemic and strengthen their climate commitments ahead of the COP26 UN climate summit in November. Annual emissions reached a record high of 59.1Gt in 2019 and the UN Emissions Gap Report 2020 finds that by 2030 they must fall by 15Gt to keep global warming below 2°C and by 32Gt to achieve the safer limit of 1.5°C.

‍’The Circularity Gap Report offers not only a sober warning of the danger of climate inaction, but a clear map forward. Collaborative effort among government, business and civil society is necessary to scale the circular economy and drive down emissions. Only through collective investment in and commitment to circular practices can we shape a more sustainable, resilient future.’ – Børge Brende, President of the World Economic Forum


The world is currently on course for climate breakdown. Current climate pledges would see global temperature rise by 3.2°C this century. China and the US have recently announced plans to achieve net zero emissions around mid-century, but these are not yet formal national pledges and they are still not enough to meet the Paris Agreement commitment to keep global warming well below 2°C, and ideally 1.5°C. The UN Intergovernmental Panel on Climate Change has warned that going beyond 1.5°C to 2°C would significantly increase extreme weather events with devastating social, environmental and economic consequences.

The Circularity Gap Report has now identified a set of circular strategies that can keep the planet on a well below 2°C trajectory by cutting emissions by 22.8 billion tonnes beyond what is achieved by current pledges, a 39% reduction from 2019 levels.

The report calculates that 70% of all emissions are generated by the extraction, processing and manufacturing of goods to meet society’s needs – the clothes we wear, the phones we own, and the meals we eat. The world is consuming more than 100Gt of materials a year and just 8.6% are reused.

The strategies it identifies would cut annual material consumption to 79Gt, by reducing the volume of materials used to create products and services, using resources for longer, and replacing finite resources like fossil fuels with regenerative resources like renewable energy. They would also increase the proportion of materials that are reused from 8.6% to 17%, nearly doubling the circularity of the global economy.

‍’Governments are making huge decisions that will shape our climate future. They are spending billions to stimulate their economies after the Covid pandemic and they are committed to strengthening their climate commitments ahead of the Glasgow Climate Summit. Circular economy strategies hold the key to a resource-efficient, low-carbon and inclusive future.’ – Martijn Lopes Cardozo, Circle Economy CEO

Huge scope to cut emissions from housing, travel and food

The report finds that three key societal needs are responsible for almost 70% of global emissions and are the areas where circular strategies can have the greatest impact: housing, mobility and nutrition.

Housing – including commercial and industrial buildings – generates 13.5Gt of emissions every year. It consumes vast amounts of virgin resources, it makes abundant use of carbon-intensive materials such as cement and steel, it creates significant emissions from heating and cooling, and it generates huge amounts of waste. With circular strategies, 9.5Gt of construction and demolition waste could be diverted from landfill and reused, reducing the need for virgin materials; cement and steel could be substituted for more lightweight, regenerative materials; and a shift to renewable energy would reduce emissions from heating and cooling. Together these would cut emissions by 11.8Gt and reduce demand for materials by 13.6Gt.

Mobility generates 17.1Gt of emissions a year, primarily from burning fossil fuels for passenger and freight transport. New design approaches to make vehicles lighter will reduce consumption and strategies like car sharing can make their use more efficient. Circular strategies can cut emissions by 5.6Gt and material use by 5.3Gt.

Nutrition generates around 10Gt of emissions a year, including 4Gt of emissions a year from land use alone. As global populations and increase and more people adopt western diets more land is needed to grow crops – especially for animal feed – and for pasture, and this drives deforestation. Regenerative agriculture and aquaculture can reduce the environmental impact of fish, cattle and crop farming while producing good yields. Switching to more plant-based diets will have a lower footprint. Circular strategies can cut emissions by 4.3Gt and material use by 4.5Gt.

‍’For billions of years, our home planet was in a perfect cycle: New life constantly emerged out of the same carbon that existed as life before. We need to restore this balance and achieve carbon neutrality without delay. For that, we need to eliminate waste and create products that last, can be repaired and ultimately can be transformed into new products.’ – Martin Frick, Senior Director Policy and Programme Coordination at the UN Framework Convention on Climate Change

Blueprints for a Circular Economy

Different strategies are appropriate to countries at different stages of economic development and the report presents blueprints for action for countries in three broad categories.

Low-income “ Build” countries such as India and Nigeria are home to 48% of the world’s population but struggle to meet their basic needs. Their economies are dominated by agriculture and they are still building basic infrastructure. They use 19% of global resources and generate 17% of emissions.

Priorities include:
1) Reforming agriculture to avoid monocropping and deforestation;
2) Applying circular principles to building projects, such as using lightweight materials like wood, clay and loam;
3) Minimising the need for motorised transport in cities by creating self-sufficient neighbourhoods and introducing electric scooters and public transport;
4) Formalising and training waste pickers and setting up recycling plants.

Middle-income “Grow” countries such as China and Brazil, home to 36% of the world’s population, are industrialising rapidly and building infrastructure to lift their populations out of poverty and accommodate a growing middle class. They are global manufacturing hubs and the world’s biggest agricultural producers. They use 51% of resources and generate 47% of emissions.

Priorities include:
1) Switching to sustainable agriculture, especially for exports;
2) Mainstreaming resource-efficient, low-carbon construction materials;
3) Meeting growing energy demands with renewables;
4) Setting up infrastructure to collect, sort and process waste materials, especially construction waste.

Higher-income “Shift” countries such as the US, Japan and European countries, are home to 16% of the world’s population but consume 31% of resources and generate 43% of emissions. They have already developed mature housing, transport and infrastructure to meet the needs of their citizens.

Priorities include:
1) Reducing their consumption of animal products and cutting food waste;
2) Extending the lifespan of buildings and infrastructure through renovation, requiring the reuse of construction materials, and designing new materials so they can be reused;
3) Extending vehicle lifespans, switching to sharing models such as car clubs and using digital technologies to reduce the need for physical travel;
4) Ensuring waste is properly valued to maximise its potential for reuse.

Download the report