As global challenges such as climate change, biodiversity loss, waste, and pollution intensify, the pace of the circular economy is accelerating to protect the planet as part of the international effort to achieve sustainable development.
Recently, talks about a transition to a circular economy have finally begun, especially as the outbreak of the Coronavirus created tons of excess medical waste, with the aim to respond and address it.
According to the World Health Organization analysis, about 87,000 tons of personal protective equipment (PPE) were procured between March 2020 and November 2021 and shipped to support countries’ urgent needs to respond to COVID-19 through a joint United Nations emergency initiative.
Circular Economy for a Pollution-Free Planet
In order to live on a healthy planet, we must act quickly to move to a circular economy free of waste and pollution, by prolonging the products and materials’ lifespan for as long as possible.
And with the global economy on the road to recovery, there is a unique opportunity to return to normalcy that places the circular economy at the heart of production and consumption models.
Moreover, the World Bank stated that circular economy is redefining growth, with an emphasis on the benefits at the societal level, by reducing waste and recycling it into other new goods.
In fact, it introduces a new understanding of opportunity by rethinking and redesigning the way factories make their final goods, by designing products that one can manufacture again.
The circular economy could reduce global greenhouse gas emissions by 39%
The circular economy can contribute to meeting the 2015 Paris Agreement, in which 197 countries pledged to reduce global greenhouse gas (GHG) emissions and the increase in global temperature.
According to the 2022 Circularity Gap Report, this type of economy has the potential to reduce global greenhouse gas (GHG) emissions by 39%, and tackle interlinked crises such as biodiversity loss and over-extraction of resources.
The report also indicates that of the 100 billion tons of materials that enter the global economy every year, only 8.6% are cycled back into the economy. This leaves a massive circularity gap of over 91% which humanity needs to address with urgent action.
Hence the emergency call launched by the Platform for Accelerating the Circular Economy (PACE), specialized in accelerating the circular economy in a paper presented to the Davos Forum, in order to work towards achieving climate-neutral and inclusive global economies.
Financing a Circular Economy
Since 2017, interested parties made many new investment funds specifically to invest in circular economy projects and businesses. The most prominent example is the Circular Economy Investment Fund which BlackRockissued and managed and which reached a fund value of more than $1 billion within less than a year of its launch, in October 2019 with a capital of $20 million according to a report by the Chatham House, aka the Royal Institute of International Affairs.
As a matter of fact, the rapid growth of the value of this fund confirms that institutional investors are interested in diversifying their investments in industries related to packaging, electronics, chemicals, clothing, etc., which accelerates the transition from a linear economy based on “extraction, production, consumption and disposal” to a circular economy.
During the “Dubai Dialogue 2021” conference held in October last year, a number of economists and experts projected that the circular economy would generate returns in economic benefits worldwide, amounting to $4.5 trillion over the next decade. Additionally, they pointed out that 10% of the global economy is considered a circular economy, which provides promising investment opportunities for the future.
The circular economy could save 138 billion dollars for the Gulf countries
A new report published by Strategy& Middle East, reveals how Gulf Cooperation Council (GCC) countries can save $138 billion in 2030 if they adopt a circular economic model, representing 1% of the region’s cumulative GDP between 2020 and 2030.
The study also mentioned that the GCC countries can reduce emissions by 150 million tons, which in practice constitutes the total CO2 emissions in Norway in 2015.
Furthermore, the study called on the governments of the Gulf states to educate their populations about the environmental impact of their consumption habits and urged them to integrate their efforts in a comprehensive national framework and establish a strategic council to begin the transition to a circular economy.
Saudi Arabia highlights its initiative in prominent international forums
Actually, this is what many GCC countries have done. For example, the Kingdom of Saudi Arabia has adopted the circular economy initiative for carbon and highlighted it in the most important global forums, particularly the G20 Leaders Summit 2020 in the capital, Riyadh.
In a speech during the virtual opening of the summit, Custodian of the Two Holy Mosques King Salman bin Abdulaziz said: “At a time when we are recovering from the repercussions of the Covid-19 pandemic, we must prepare the ground to ensure the creation of a strong, comprehensive, balanced and sustainable economy, by empowering people, preserving the planet; and shaping new horizons.”
Saudi Arabia’s initiative is building an independent and self-sustaining economic system. It is a closed-loop system that involves 4Rs: reduce, reuse, recycle, and remove.
On the other hand, Saudi Energy Minister Prince Abdulaziz bin Salman, at a session titled “Science in Action: Investing in the Circular Carbon Economy” last October, promised to contribute 15% of $10 billion to fund the “circular carbon economy.”
A UAE specialized council towards sustainable development
A few days ago, the Policy Committee of the Emirates Council for the Circular Economy, chaired by the UAE Minister of Economy Abdullah bin Touq Al Marri, held its first meeting this year to lay out the roadmap for the circular economy of the country.
The UAE Cabinet established this council in January 2021. The council aims to follow up on the progress made in the country’s transformation towards a circular economy.
In addition, the Dubai Supreme Council of Energy had launched the Circular Economy Committee to bring public and private entities together to support the circular economy.
The UAE had also adopted a Circular Economy Policy. It is a comprehensive framework that defines the country’s directions in achieving sustainable management and efficient use of natural resources, by adopting consumption and production methods and techniques. The policy aims to ensure the quality of life for current and future generations, minimize consumption of natural resources and reduce waste.
The UAE expects its policy to contribute to achieving great economic returns to the state, reducing environmental pressure, securing the supply of raw materials, increasing competitiveness, stimulating innovation, promoting economic growth, and creating job opportunities.
In view of the above, the transition to a circular economy has become a vital necessity to achieve the UN Sustainable Development Goals (SDGs). For instance, there will not be enough natural resources to sustain the growth of the global economy based on the linear model, which requires directing economic policies to be consistent with the limitations of the world in which we live.