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Circular Economy

What are the benefits for Europe?

If the overall benefits of circular economy are translated into concrete scenarios for Europe some interesting figures are provided.

In Europe, much waste is produced, and of the materials which are available relatively little value is used before they are discarded. New technologies and innovations can still partially improve efficiency, but their benefits are limited by the dependency on local government support and the risk of rebound effect. Ellen MacArthur Foundation, 2015b, p. 13

The real solution would be found in integrating technological innovation in European industries, in such a way that it maximizes the value that can be created per resource, by applying the principles of the circular economy. To increase the EU’s circularity, it is necessary to proceed on renewable energy, to apply eco-design radiaclly and to counteract the growth in materials stocks in society (for example, old mobile phones remain for years in the drawer, rather than taken back for reuse)Haas, Krausmann, Wiedenhofer, & Heinz. 2015

The circular economy has a lot to offer. The Ellen MacArthur Foundation has a large-scale investigation into the application of Circular Principles on three sectors in Europe (Construction, Food and mobility) compared to continuing the current line of development. This indicated that, within certain assumptions and the successful application of innovations, there are great opportunities for Europe in the economic field, for the environment and for the growth of employment (See figure 1).Ellen MacArthur Foundation, 2015b, p. 35

Economic benefits

By retrieving more value from less material and yet being able to provide adequate service to everyone, over € 1.8 trillion can be saved annually from 2030. This is a saving of 32% on primary materials (0.6 billion), lower costs of negative side effects (0.5 billion), and other cost savings (0.7 billion). The model of the Ellen MacArthur Foundation predicted that profits will only increase up until 2050.

These cost savings and new business models ensure that GDP increases compared to the increase calculated for following business as usual, with 11% in 2030 and over 27% in 2050. Ellen MacArthur Foundation, 2015b, pp. 14, 32 -34

Based on a literature study, the Ellen MacArthure Foundation has concluded that circular economy has a positive effect on employment in Europe. This is mainly due to an expected increase in consumption because it is expected that prices will fall. In addition, employment is often associated with competition and innovation in the market, something which is expected to increase in the circular economy. Ellen MacArthur Foundation, 2015b, p. 36

Environmental benefits

According to the study of the Ellen MacArthur Foundation applying the principles of the circular economy in the construction, food and mobility sector, CO2 emissions will be reducedby 48% in 2030 and even 83% by 2050%, compared to the CO2 emissions in those years when the current model is maintained.

This researchwas based on ideal scenarios for the circular economy, such as:

  • Minimization of the use of fossil fuels
  • Optimal usage scenarios for transport
  • Completely eliminating fertilizer use, restoring nutrient cycle.

As a result, the use of metal and concrete for the construction and transport, fossil fuels, land use, chemical fertilizers, water, pesticides, will decrease.

By optimizing the construction, food and mobility sectors, infrastructure can be replaced by green areas and housing, thus increasing the livability of cities and improving air quality. Ellen MacArthur Foundation, 2015b, pp. 34-35

europeanadvantages

fig. 1: Differences between the current and a circular scenario in Europe Ellen MacArthur Foundation, 2015b