The circular economy could be pivotal for climate action and mitigation but must drop its Global North bias to benefit everyone. Here’s how.

The latest IPCC coverage laid bare how climate change is destroying lives and livelihoods worldwide. From those working in sectors sensitive to climate change to people losing incomes and homes due to climate events. Overall, existing inequalities are deepening. We need solutions that put people at the centre.

The circular economy is crucial here: the IPCC Sixth Assessment Report highlights on page 121 how the circular economy is ‘an increasingly important mitigation approach that can help deliver human well-being by minimising waste of energy and resources’. But for this to become a reality, adopting circular solutions must be just.

Circle Economy, the International Labour Organisation (ILO) and S4YE (a World Bank-led global programme) have united under an initiative—Jobs in the circular economy—that will do exactly this: create evidence and tools to unlock the potential of the circular economy so that it can be used for a just transition and decent work for all. By bringing together international research institutions, industry representatives, social partners, and public bodies to create better evidence, we aim to arm decision makers with what they need to set us on the right path. 

The first fruit of this endeavour is our joint report that launched last week at the World Circular Economy Forum in Helsinki: Decent work in the circular economy. It finds that out of 425 academic studies on decent work and circular economy reviewed, 84% were focused on the Global North—spotlighting the Global North bias of current circular policies. It shows us that we must both zoom out—by creating a more comprehensive global picture—and zoom in—by diving into what different circular economy interventions mean for different regions, cities and minority groups around the world. 

The past six years have seen record material use but also worsening inequalities  

In the last six years of the Circle Economy’s Circularity Gap Report, the global economy extracted and used more materials than the entire 20th century. Ultimately, massive rises in global material extraction and use must translate to global equity or deliver better opportunities for all. Yet we’re seeing mounting inequalities between and within countries. In 2022, 214 million workers were living in extreme poverty, while women in the workforce, particularly in the global south, still lag behind men. And while the value and energy that material extraction delivers can boost living standards, more than one-quarter of income generated from global GDP growth goes to the world’s richest 1%.

The math is not adding up. 

With a circular economy, we could regain balance

The circular economy puts forward solutions that can be used by governments and industries to fulfil society’s needs with 70% of the materials currently used, finds the Circularity Gap Report 2023. This one-third reduction can also keep global warming temperatures below 2-degrees and drive benefits for people while reaching climate targets. Also, as an approach to redesigning systems, circularity can help to redistribute power and wealth—when its implementation is coupled with redefining value. 

However, for the circular economy to truly support a just transition, those embracing it need to be clear on what it means for people now and in the future. This means promoting climate justice to tackle existing inequalities in labour markets and value chains, anticipating future impacts on workers and industries, and mitigating potential trade-offs between social and environmental goals. 

Undoubtedly, a circular economy can help us reach our climate goals. However, fully unlocking the potential of this new economy requires a just transition that addresses the current inequalities and suboptimal working conditions currently present in the circular economy,’ says Alette van Leur, Director of the Sectoral Policies Department at the ILO.

Human labour and skills are essential levers to systems transformation

Without people, new solutions cannot be designed or engineered, and climate targets will be missed. Strategies that help societies to become more circular—use less, use longer, use again and make clean—are ultimately labour-intensive. It takes only one job to incinerate 10,000 tonnes of materials, but 36 jobs are needed to recycle the same 10,000 tonnes and up to 296 jobs to refurbish and reuse them.

As circular solutions gain traction, we must ensure that the people already driving circular activities worldwide are at the centre. 

And this is already happening: the ‘historic’ decision to recognise waste pickers as formal stakeholders in negotiations over the global plastics pact last year, for example. Including informal waste pickers in negotiations signals a recognition of the knowledge and skills they bring to labour-intensive activities and their role in the global plastics system. Involving the informal workers—from smallholder farmers to second-hand merchants—must be a priority as the circular economy reaches national and international forums. 

However, most circular policies fall short of being inclusive and just. For example, the European Union’s Action Plan has been criticised for focusing on maximising local benefits. Yet local circular policies have international impacts across value chains and through trading partners—these must be accounted for.

Our latest paper, Decent work in the circular economy, highlights how many circular policies risk being based on a narrow understanding of the circular economy and how this could impact the lives of much of the global population. 

We’re developing tools to unlock the potential of the circular economy for promoting innovation, sustainable enterprise, and decent work for all.

As governments and industries worldwide use circular economy solutions to adapt to and mitigate the impacts of climate change, we must better understand what it entails for people.

Our latest report identifies what we currently know about jobs in the circular economy. It also pinpoints research gaps and calls for more consistent and internationally relevant evidence to create a stronger foundation for decision-making. As the first outcome of the Jobs in the circular economy initiative that launched this spring, it will zoom out—helping monitor global progress towards more inclusive circular policies, and zoom in—diving into the challenges and opportunities the circular economy poses to people around the world. 

The initiative will help us ensure that we don’t recycle the same inequality issues as our linear economy. It will leverage the expertise and understanding of what is and isn’t working for people working in pockets of the circular economy and labour markets, from governments, industry, marginalised groups of workers, research institutions, trade unions, and civil society organisations. The evidence and insights the initiative will create will raise awareness and put tools in the hands of decision makers, so that the circular economy can be a roadmap for the transformative and social-justice-led systems change that we need to set us on the right path. 

In the meantime, we recommend: better data collection so that organisations representing workers, employers and citizens can advance circular economy solutions locally and internationally. Find further steps of what you can do now to promote a just, circular transition in our previous WEF contribution: Sustainability policies can worsen global inequalities. Here's what needs to change: Improve reuse and recycling policies to tackle the world’s waste, reduce reliance on ‘one-size-fits-all’ high-tech innovations and encourage responsible trade practices to limit overconsumption.