Over 70% of the world’s GDP is now covered by a net-zero target, with many advanced economies aiming to decarbonise by 2050.
Net zero emission means that all man-made greenhouse gas emissions must be removed from the atmosphere through reduction measures.
But reaching net-zero goals is a massive undertaking, requiring an urgent systems-wide change in how we live and work, says James Pennington, associate director and Circular Economy lead at Deloitte.
Making the needed changes at speed to support the energy transition is possible – provided we build a more circular economy, he points out.
Strategies including greater recycling, use of recycled materials, and design for second life and disassembly will all underpin the energy transition.
The circular economy is a system, which aims to get the most out of materials, keep products and materials in use and design them to be cycled back into the economy, eliminating waste. It is also a vital pillar of the energy transition.
In a circular economy, all resources are used to their highest value and reused continuously rather than being thrown away.
The size of the economic opportunity from rethinking how resources are used is vast. For example, there is 100 times more gold in a tonne of smartphones than a tonne of gold ore, but many phones are not properly recycled, wasting these resources, according to the World Economic Forum.
The United States Environmental Protection Agency (US EPA) calculates that for every 10,000 tonnes of used goods, putting them in landfill would create six jobs, recycling them would create 36 jobs, and reuse and repair could create up to 296.
The circular economy, which promotes the elimination of waste and the continual safe use of natural resources, offers an alternative that can yield up to $4.5tn in economic benefits to 2030.
This can be achieved by reducing waste, stimulating business growth, and creating jobs. Making better use of raw materials is not just good for the planet, it’s a financial imperative.
The International Resource Panel of scientific experts found that more sustainable use of materials and energy would add an extra $2tn to the global economy by 2050.
And there could be particular advantages for low- and middle-income countries. International Resource Panel modelling shows that by 2060, with the right sustainable policies in place, growth in global resource use can slow by 25%. Meanwhile, global GDP could grow by 8%, with a particular benefit for low- and middle-income nations.
Achieving this transition requires unprecedented collaboration given that today, only 8.6% of the world is circular.
“We have a long way to go,” the World Economic Forum insists.
To support and scale these efforts, speed will be of the essence – especially given last year’s climate report from the Intergovernmental Panel on Climate Change (IPCC) confirming that urgent action is needed to stop global temperatures from rising above 1.5°C and 2°C.
Getting to net-zero by 2050 will mean accomplishing what seems unimaginable, like entirely phasing out the internal combustion engine or adding the equivalent of the world’s largest solar farm every single day.
Undoubtedly, transforming our current economic system is both a daunting challenge and a massive opportunity – one like the world has never known!
