Worldwide interest in shifting to a circular economy in which “products are made to last longer, communities share resources and save money, and businesses are maintaining, reusing, remanufacturing and recycling materials to create more value for current and future generations,” is growing rapidly. Seventy-nine countries referenced adopting circular economy measures in their most recent submissions to the United Nations on their Nationally Determined Contributions—action plans to cut emissions and adapt to climate impacts. 

Canada is at a nascent stage in adopting and implementing circular economy principles. But as more and more countries shift their economies we take a closer look at how circularity could support Canada in meeting its climate goals.

The link between circularity and emissions reduction

Numerous studies have found that current climate initiatives are not sufficient to keep warming below two degrees Celsius or to reach net zero goals. The 2021 Circularity Gap Report found that material handling and use accounted for 70 per cent of global greenhouse gas emissions. A shift to zero carbon energy sources or capturing carbon can address some, but not all, of these emissions. 

Meanwhile, the 2023 Circularity Gap Report notes that in the past 50 years material extraction has more than tripled. So the problem of reducing the emissions associated with resource extraction, processing, and product lifecycles has been growing. 

The Ellen MacArthur Foundation has suggested that adopting circularity measures in four key sectors (cement, steel, plastic, and aluminum) could reduce emissions by 40 per cent by 2050. For the agricultural and food sector, they suggest a reduction of close to 50 per cent is possible in the same timeframe by focusing on circular and regenerative practices. 

Maximizing value from resources

As Canada is a resource-rich country, it is only just starting to adopt and implement circularity practices in its economy. But concerns are growing about the impacts on air, water, land, and climate of a “take, make, waste” economy. 

The other challenge is that to support Canada’s transition to renewable energy systems resources like metals and cement are required. Meeting this demand through increased resource extraction risks greater emissions and environmental impacts while potentially failing to fill critical gaps. By embedding circular principles in plans for meeting this demand, Canada can be better prepared to both reduce impacts and ensure the country has the materials it needs. 

Not surprisingly, countries like Japan that do not have significant natural resource wealth have long embraced circular principles. Japan has developed a cultural commitment to maximizing value from resources that other countries can draw many lessons from. 

As demonstrated by Japan and other countries, circularity goes far beyond improving recycling or capturing and reusing waste. It requires a much more sweeping change of industrial, commercial, and consumer mindsets and systems. There are a number of steps a true circularity approach will require. They include: designing excess concrete or steel out of buildings, extending the life of products, shifting to “product as a service” models, ensuring materials and products are easy to recycle through better design and reduced contamination, and reducing the size of homes and vehicles. These are the kinds of steps a true circularity approach will require. 

Measuring the impacts of circularity

Measuring the climate impacts of circular approaches is still a work in progress. However, there are many academic and non-governmental organization studies of the potential for circularity to reduce emissions. The 2022 Circularity Gap Report, for example, suggests that by adopting its suggested circularity policies, resource demand can be reduced by 28 per cent. Greenhouse gas emissions can be cut by 39 per cent. 

But much of the emissions reduction potential of circularity remains hypothetical. Indeed, even countries with strong circularity commitments, such as the Netherlands or Finland, are just beginning to implement their roadmaps for achieving greater circularity. China and Japan may have made greater advances, but they started this work before adopting their current circularity strategies. 

Measuring impact also remains a work in progress. Various international bodies are working to standardize measurement approaches and build up a robust statistical framework for properly measuring the emissions outcomes of moving to greater circularity. Better tracking of materials flows, agreement on consumption-based accounting for emissions, and the ability to compile accounts at regional and national levels are all tasks that countries and international agencies continue to grapple with. 

Developing a suite of policies and financial measures to incent circularity will also require that attention is paid to potential rebound or backfire effects. Adopting efficient or cost-saving circular approaches increases product demand or energy use, and results in unintended emissions increases. 

Shifting to circular economic approaches

There is little question that the global economy must become more circular. The world is currently extracting more than 100 billion tonnes of resources from the earth each year. This level of exploitation is not sustainable. To achieve both climate targets and Sustainable Development Goals, Canada needs to embrace a shift to circular economy approaches that can make our world both healthier and more prosperous. 

How circularity can contribute to emissions reduction in Canada provides an overview of the current state of play when it comes to our understanding of the potential of circularity to reduce greenhouse gas emissions. There is no question that future development is likely to be rapid as countries begin to realize the potential of this next wave of climate action.