Measuring the circular state of the world – The Circularity Gap Report 2021

The Circle Economy’s Circularity Gap Report (CGR) 2021 was launched on January 26  during a live online event by an international group of circularity leaders. The authors and contributors of this annual report, now in its fourth edition, evaluated the state of the economy and presented strategies for a more material efficient society. The Global Circularity Gap Report is an annual report that measures the state of circularity and presents key levers for change. Its goal is to inspire action and realize a global circular economy. 

By using the Circularity Gap concept, a circular future is compared to the current trajectory where material flows are linear and business is made as usual. The report shows that all 194 nations could be able to mitigate greenhouse gas (GHG) emissions and material use to a sustainable level if a set of circular objectives and strategies were implemented. As a researcher specialized in circular economy metrics, I have attempted in this post to evaluate how the Circularity Gap Report analyzes circularity and am pleased to present my thoughts on how circularity should, in my view, be defined.  

Presentation of this post

The circular economy’s goal is to achieve both social and environmental sustainability. To succeed with this complex task, leaders, businesses and individuals need to understand how circular economy concepts should be applied in a way that the resulting effects lead to sustainability. While simple metrics are useful for this purpose, they also require assumptions that affect the correctness of the metrics. The result can be a pedagogical metric that has little connection between circularity and sustainability. However, it is possible to create a metric that is relevant for progress evaluation, yet simple enough to understand. After all, the current global metric used to measure success is predominantly economic growth, a concept that, per definition, degrades natural ecosystems and that does not take human wellbeing into account. Nevertheless, assumptions on the connection between circularity and sustainability need to be made carefully.

One of two main sustainability goals, social sustainability, is complex to evaluate. There are multiple reasons for this, first off all, wellbeing is subjective as it is interpreted differently by each one of us depending on cultural, geographical circumstances. It is also not quantifiable, meaning that it is not possible to put an objective number on progress made. In the CGR 2021, social sustainability is addressed in line with the Doughnut Economy framework by describing housing, nutrition, material and energy needs as well as healthcare and education as minimum requirements for humankind. These aspects are not included in their metric that is used to define the Circularity Gap, which makes sense due to the many problematic assumptions it would require. The effects of circular measures on human welfare must, of course, still be monitored and evaluated separately.  

Illustration of the goals with increasing circularity

Evaluating environmental impact is also complex, yet quantifiable. There are several environmental impact categories and even though each of them is quantifiable, a subjective process is required to translate the impact on the impact categories into a single number. In the CGR 2021, the concept of environmental sustainability has instead been evaluated based on two aspects: global material input and global GHG emissions. This gives a good overview of the general environmental performance, even if all aspects of environmental sustainability are not included. Two examples of omitted aspects are how regenerative materials are used and toxic waste creation. Global warming is probably the greatest threat to global ecosystems which is mainly determined by GHG emissions. Reducing material input reduces resource demand, land use and emission of various pollutants. For instance, according to the CGR 2021, 70 % of GHG emissions can be traced to material use. Hence, reducing material demand and GHG emissions are hence two relevant aspects to assess when simplifying the assessments of environmental performance.

In the CGR 2021, two objectives with the circular economy are stated, which can be described as: reduce the input and output of resources. Resources are extracted both from the ground (lithosphere) and harvested from nature (biosphere) and are used for energy generation, material production or nutrition. Simply put, the former leads to reduced material stocks for future generations and waste creation while the latter leads to ecosystem degradation. Although the material treatment objectives for resources taken from the biosphere and lithosphere should be different, the reduction of resource input and output is absolutely crucial for both material types. Hence, using the chosen objectives as rules of thumb for circular success makes sense.

The objectives with circular economy as presented by the CGR 2021

In addition, the CGR 2021 describes four strategies to accomplish its two objectives: narrowing, slowing, closing and regenerating flows. In short, the concepts can be described as follows: 

  • Narrowing flows: by increasing efficiency of design and production processes and hence reducing environmental impact per product.
  • Narrowing flows: by reducing the demand for products and energy by using circular business models such as sharing services, increased product utility and sufficiency.
  • Slowing flows: by reducing the rate at which products are changed to new by applying reuse, repair and refurbishing on products. 
  • Closing flows: by reducing demand for new materials by recycling and remanufacturing products, either in the production phase or after the product has reached its end of life.
  • Regenerate flows: by using biological materials in a regenerative way.

These mechanisms all contribute to reduced demand for material extraction and harvesting, while regenerative flows ensure that the used materials and energy are non-toxic and renewable. All in all, applying these strategies throughout product lifecycles in society at large is a great bridging of the concept of circularity and actual solutions. By doing so, the material input and output could be substantially reduced.

Illustration of the three circularity strategies contributing to reduced resource demand

Given the brilliant objectives and strategies in the report, the way that its authors choose to calculate circularity is rather surprising. Although the metric itself can be useful for some purposes, it does not relate to more than one of the presented strategies for circularity (circular flows). Admittedly, it is not simple to include the concept of regeneration in a single-point metric. The other three strategies, on the other hand, all affect the yearly global resource input and output amounts. When evaluating progress on the presented strategies (narrow, slow and circular flows), it would hence make more sense to simply measure resource input and output. However, calculating circularity as “ratio of circulated input”, does not give all the required information for determining the total resource demand. 

What does a global 16 % circular flow mean for the total material output and GHG emissions?

Johan Brändström – Chasing Circular

To claim that 16 % circular input is enough to reduce both GHG emissions and extraction rates to a sustainable level requires assumption about consumption and production rates as well as the speed of material flows. To support this argument, the CGR 2021 reader actually is presented with data that show that the strategies most important for GHG emission reduction are slowing and narrowing flows. Meanwhile, when stating that the global circularity only needs to be upped by 8.4 %, the 2021 CGR’s reader gets the impression that the most important strategy is to close the loops with activities such as recycling and cascading. 

Given all the above, how should circularity be defined on a global level? Personally, I advocate for assessing progress towards circularity by measuring the total resource input and output from the society. More specifically, the total material input and output. This mindset is easy to apply and intrinsically relate to three of the four strategies: narrowing, slowing and closing flows. Moreover, reducing material input indirectly increases the possibility to use resources regenerative. Although it can be argued that the term circularity is not the best to describe “reduction of resource input and output”, it is more relevant for assessing environmental performance than simply increasing material recirculation. Monitoring resource input is the first step of basically every environmental impact assessment method, so it is no rocket science. It should also be noted that material input is easy to relate to throughout the whole lifecycle of products: as soon as something is produced or consumed, it is simple to imagine that material extraction or harvesting has been required somewhere. 

Why is it so important to talk about how circularity is defined? Well, how circularity is defined gives implications on the whole concept of circular economy and what it means to how we live our lives. Defining circularity as the rate of recirculated materials sends out the message that circular economy is about recycling garbage and giving our old clothes to second hand shops. It does not say anything about how products should be sold, consumed or used. However, successful environmental performance as a result of circular measures can only be achieved by combining solutions throughout the whole lifecycle of products. A successful metric should create awareness about the importance of changing mindset. Preferably, the mindset described by the Ellen MacArthur Foundation, that the planet should be seen as a ship on the ocean with almost no input of resources, should be clear.

Video Courtesy of Circle Economy – Presentation of the CGR 2021

Lastly, the CGP 2021 presents a reasonable future scenario that can sustain both human prosperity and functioning ecosystems, as opposed to business as unusual. The scenario was derived by applying theoretical solutions on the sectors where the biggest potential for GHG emission reduction was identified. In the calculations, current national pledges for climate actions are aggregated with a number of proposed circular initiatives. The authors present a global pathway for material extraction reduction and GHG emissions based on these calculations. A set of tailored pathways are then presented for three different country profiles defined by the authors. The CGR 2021 concludes the report by suggesting pledges for the presented country profiles. This section of the CGP 2021 is not deeply analyzed in this post, but I can mention a couple of things. Firstly, it is relevant to use a top-down perspective by anchoring national pledges in the global environment and adapting them for local circumstances. Secondly, the connection between measurements of circularity and calculations in the proposed scenarios is vague, as it was not clear (at least to me) how GHG emission reduction or material input reduction is connected with the presented concept of circularity. 

In conclusion, the CGR 2021 is a valuable contribution to decision-makers who want to lead nations towards a circular economy, but there is a disconnect between the proposed objectives and strategies. These proposed objectives and strategies are great guidelines for the circular economy and should be incorporated in decision making on every level. This framework brings us closer to a visualization of the systemic view on how an alternative future could look like. However, the connection between the concept of circularity, the proposed strategies and the effect on individuals must be clarified. Circular economy advocates need to understand that the concept goes beyond recycling and dare to be clear with this message. Although the concept of closing loops is important, it will not save humanity from environmental catastrophes in the future. Complete new lifestyles for individuals, mindsets in businesses and politics as well as a new economic system is required for that to happen. For the purpose of highlighting this, another way of communicating the concept of circularity is necessary. Preferably, that metrics should include components relevant for all proposed strategies. Simply measuring material (or resource) input and output, would be a step in the right direction. Such metrics would enable policy makers to increase the cost of what is important: activities that contribute to extraction, harvesting, pollution and waste creation.

For readers interested in learning more about the circular economy, I recommend The ultimate guide to circular economy. If you want to know more about how environmental performance can be assessed with circularity metrics, you can follow Chasing Circular

Leave a Comment