Promoting a Just Transition to an Inclusive Circular Economy

Since 2017, annual global primary resource extraction and use has exceeded 100 billion tonnes per year; and estimates by the International Resource Panel indicate that by 2050 annual global material use could amount to between 170 billion and 184 billion tonnes – an unsustainable level that increases global environmental risks. Today, only 8.6 per cent of the resources and materials in the global economy are reused or recycled. A transition to circular economy is required to move away from the current linear economic model of ‘take–make–throw away’. This transition is crucial for reaching the environmental goals of the 2030 Agenda for Sustainable Development, and to achieve countries’ climate targets as set out in the 2015 Paris Agreement. In the context of these two critical multilateral undertakings, it is important to ensure that the transition to a resource-efficient and circular economic model will also deliver on social objectives – poverty eradication, improved livelihoods and well-being, decent work, and reduced inequalities.

The concept and the political agenda of ‘just transition’ has gained significant traction in international and national debates on climate change and energy transitions. In this context, it refers to deliberative political processes that:

• Support regions, industries, workers and communities that are adversely impacted by climate change mitigation measures and environmental policies through reskilling and training;
• Give affected stakeholders a seat at the table in decision-making processes about future economic and social development in their regions and countries;
• Recognize rights to resources and resolve competing development interests through participatory processes;
• Anticipate and address unintended social consequences that emerge from industrial restructuring and phasing out of high-polluting industries and sectors; and
• Rectify existing inequities at an international level between countries, and mitigate emerging conflicts between countries through collaboration and support mechanisms.

The political economy of the transition from a linear to a circular economy has a number of similarities with that of low-carbon transition. As pointed out by the UN World Social Report 2020: ‘A just, equality-enhancing transition towards green economies calls for the integration of climate action with macroeconomic, labour and social policies aimed at job creation, skills development and adequate support for those who will be harmed. So far, the circular economy narrative has been mainly framed as a purely technological matter or a question of ‘making the business case work’. As with the energy transition, the circular economy transition will not only be a technological transition; it will likely also be intensely political.

This research paper makes the case that considerations of justice and social equity are as important for the circular economy transition as they are in the contexts of low-carbon transitions and digitalization of the economy. Without social justice considerations, the circular economy transition will face challenges in getting established as an alternative new economic model, let alone in being sustained over time. Adopting a just transition approach will be critical from an ethical point of view, as well as to ensure active participation and public acceptance of policies and regulatory reforms.

To read the full report from Chatham House, please click here.