Circular Principles for Carbon Neutrality -Accelerating a transition to a circular economy through business leadership and partnerships-

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The climate and resource nexus has been widely recognised and by the international community, and by countries seeking to make the transition to a net-zero and circular economy. According to an assessment by the International Resource Panel, resource extraction and processing account for approximately half of all global greenhouse gas emissions (not including climate impacts related to land use)1. Emissions from the production of materials increased from 5 gigatonnes (Gt) of CO2-equivalent in 1995 to 11 Gt in 2015, with their share of global emissions rising from 15% to 23%. Most of the material-related emissions stem from the production of bulk materials: iron and steel (32%), cement, lime, and plaster (25%), as well as plastics and rubber (13%)2. Our economies and lifestyles related to resource use must be transformed not only through a switch to renewable energy sources and energy efficiency measures, but also through increased material efficiency. Several reports2,3, indicate the potential to make a significant contribution to the goal of net-zero by 20504. Another study shows that applying circular economy strategies in just five key areas (cement, aluminium, steel, plastics, and food) can eliminate emissions by 9.3 billion tonnes of CO2e in 2050.

The global climate goals of the Paris Agreement as well as other global ambitions on biodiversity and pollutions cannot be achieved without the transition to a more resource efficient and circular economy. Our society needs to comprehensively consider resource use and associated climate and other relevant impacts. Neither the public nor the private sector can be an extension of the existing system, and there must be a radical business model transformation using recent tools include digitisation, circular design, and traceability that will make this transition and transformation possible. We should more effectively integrate the circular economy-carbon neutral nexus across the whole life cycle using a systems approach, as well as encouraging multi-stakeholder collaboration, with full consideration of the global and long value chains across many industries.

The international community is now much more aware of the significance of circular economy (CE) and resource efficiency (RE) and carbon neutral (CN) nexus and has facilitated discussions to identify opportunities and challenges. In the UNEA5.2 resolution, it was acknowledged that circular economy approaches can contribute to addressing climate change, biodiversity loss, land degradation and the impacts of water stress and pollution. The Global Alliance on Circular Economy and Resource Efficiency5 (GACERE) explores potential climate benefits from circular solutions in various areas6 including lifestyles and waste, as well as built environments, food, textiles, and plastics. In the G7 Berlin Roadmap on Resource Efficiency and Circular Economy (2022), promoting CE/RE across all relevant sectors was recognised to contribute to reducing the climate, biodiversity and pollution impacts of material use throughout the entire life cycle of products. The roadmap also shared a plan to develop the Circular Economy and Resource Efficiency Principles (CEREP), which encourage companies to establish initiatives on circular economy, to promote engagement with the public and the financial sector, and to promote their voluntary CE/RE actions.

Building upon the discussion at COP26, the session will continue to build a momentum on a transition to a circular economy to achieve decarbonization, focusing on promoting private sector actions and key drivers.

At this session, the Japanese Government and the World Economic Forum will bring together key public and private sector participants to discuss the crucial elements for circular and climate neutral transition throughout the value chain, and how to scale circular economy and resource efficiency solutions.
The outcomes of the meeting will be summarized in a briefing note.

Objectives

• Emphasize that CE is a positive agenda that contributes to the economy, environment, and society, including climate change, biodiversity, and resource security.
• Showcase the potential for strengthening industrial development and competitiveness through CE transition of business as well as the importance of proper financing and investment in CE by both public and private sectors.
• Highlight the crucial role of the private sector in building supply chain sustainability towards a circular and climate neutral economy.
• Emphasize the need for common circular economy principles to guide businesses in their efforts to work towards a more circular world and achieve net zero ambitions, contributing the process of G7.

1: IRP (2019) Global Resource Outlook (page 68)
2: IRP (2020) Resource Efficiency and Climate Change: Material Efficiency Strategies for a Low-Carbon Future (Executive summary)
3: IEA (2021) Net Zero by 2050 A Roadmap for the Global Energy Sector
4: EMF (2019) Completing the picture: How the circular economy tackles climate change
5: https://www.unep.org/events/online-event/launch-global-alliance-circular-economy-and-resource-efficiency-gacere and https://www.unido.org/news/launch-global-alliance-circular-economy-and-resource-efficiency.
6: GACERE (2021) WORKING PAPER on Circular Economy and Climate Change, available at https://ec.europa.eu/environment/international_issues/gacere.html).