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Towards a Circular Economy

Posted by Nick Prag at 03 December 2015, 19:20 CET |
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While the world's leaders and environmental experts in Paris grapple with trying to agree a global deal on climate change, the European Commission this week set out new proposals for a 'circular economy' which have the potential to fundamentally change the way we live and do business.

Climate change is the greatest threat to mankind. Combating it is our greatest challenge.

The COP21 climate change conference under way in Paris is aiming for a legally binding and universal agreement on climate, in the hope of slowing down global warming by reducing greenhouse gas emissions emitted into the atmosphere.

Europe claims an important role in fighting climate change. It is the first region with binding targets, on track to be a world leader in renewables,succeeded in cutting EU emissions by 19% from 1990 to 2013, a period during which GDP grew 45%.

Of the EU Budget, 20% will be spent on climate action by 2020. With Horizon 2020, the European research and innovation programme, the EU has committed to allocate at least 35% of the programme's approximately EUR 80bn budget to climate-related objectives.

But one initiative, the 'Circular Economy Strategy', which the Commission unveiled in revised form this week, can not only make a difference to climate change, but has the potential to transform the way Europe's economy works.

The average European consumes 14 tonnes of raw materials and generates five tonnes of waste a year. The concept of the circular economy means restructuring the economy to use resources in a smarter, more sustainable way.

In such an economy, the value of products and materials is maintained for as long as possible; use of waste and resource is minimised, and resources are kept within the economy when a product has reached the end of its life, to be used again and again to create further value.

The Circular Economy is an ambitious model which can provide consumers with more durable and innovative products that provide monetary savings and an increased quality of life. It can also create secure jobs in Europe, promote innovations that give a competitive advantage and provide a level of protection for humans and the environment that Europe is proud of.

However, the new legislative proposals and action plan were only given a cautious welcome by MEPs this week. The proposals, watered down after being withdrawn because of the better Regulation principle, had lower targets that the previous proposals on waste recycling, reducing food waste and landfill.

The potential that a circular economy has with regard to climate change is huge. As the Commission's first Vice-President Frans Timmermans said: "Our planet and our economy cannot survive if we continue with the 'take, make, use and throw away' approach […] The circular economy is about reducing waste and protecting the environment, but it is also about a profound transformation of the way our entire economy works."

The COP21 Paris talks will hopefully agree a package which will set new targets for nations to tackle climate change.

The Circular Economy has the potential to translate grand ideas into concrete initiatives that make a difference.

But this will only happen if the EU is bold and does indeed follow through on a radical transformation of the economy.

According to a Commission 2014 study, the benefits of implementing a circular economy include creation of 2 million new jobs, savings to European industry of over EUR 600 bn and greenhouse gas emission reductions of between 2% and 4% each year.

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Nick Prag

Nick Prag

Nick Prag is founder and managing editor of EUbusiness.com. Prior to EUbusiness, he was senior editor at Europe Online SA in Luxembourg, where he played a major part in the launch of Europe Online International.