What stops our economy being circular and zero carbon?

Reducing carbon emissions and achieving a circular economy are solutions to our twin planetary emergencies of climate breakdown, and resource scarcity coupled with environmental degradation.

A recent opinion piece by LETI for which I was lead author explores the connection between circular economy and reducing carbon in construction.

The two concepts are intertwined: circular economy design prescribes the reuse of buildings, systems, components, and materials, and, more generally, using less of anything. This lowers embodied carbon emissions. And vice versa: many measures that reduce carbon emissions improve material use circularity.

The LETI opinion piece doesn’t go into the difficulty of implementing either zero carbon or the circular economy. Below are some of my thoughts on why transforming our globel linear economy to a circular one is so challenging.

For carbon, “net zero” has become part of the problem of slow progress to zero carbon. Many use carbon offsets, allowed to achieve “net zero”. The overwhelming majority of carbon offsets fail to reduce emissions (“85% of offsets failed to reduce emissions, says EU study”). Ignoring carbon offsets, “net zero” starts to look rather more like “absolute zero”, a much, much tougher target, but one that better reflects what we need to do to limit planetary warming to 1.5°C (or even 2°C, if we must).

At least, to help reduce carbon, the metrics (emitted carbon) and targets (zero) are well defined and agreed on. Not so for circular economy, where there is absolutely no consensus on what the metrics and targets should be. This is but one signal of the multiple problems bedevelling the shift to a circular economy.

Good examples of circular economy in construction are rare. I list some here, but unfortunately, these projects remain largely unparalleled.

“Critiques of the circular economy” (Corvellec et al, Journal of Industrial Ecology) is an excellent round-up of multiple sources and clearly summarises reasons for the slow progress towards the circular economy nirvana. (Thank you Joe Jack Williams for alerting me to this important paper.) One such source in the paper, “Lost in Transition: Drivers and Barriers in the Eco-innovation Road to the Circular Economy” (de Jesus et al, Ecological Economics), states the barriers to the circular business model as being: “technical barriers such as an inappropriate technology, or lack of technical support and training; economic barriers such as capital requirements, high initial costs, or uncertain return and profit; institutional and regulatory barriers such as a lack of a conducive legal system, or a deficient institutional framework; and social and cultural barriers such as a rigidity of consumer behaviour and businesses routines”

Corvellec’s paper points to the bleeding obvious: to achieve the circular economy requires a fundamental shift in the global economy. At the demand-side this includes a significant reduction in consumption of new and even second-hand stuff (see “Circular Economy Rebound” by Zink et al), a swing in consumer psychology to preferring second-hand things and refurbished buildings over new, and a preference for being a temporary user of things over being an owner. The complex supply-side changes include changing production lines from manufacturing to remanufacturing and switching traditional linear distribution networks to those incorporating reverse logistics.

Such changes are unlikely to happen without governments intervening with limits, incentives, and taxes. Legislating for such measures will be difficult. Take for example the UK which inexplicably continues to encourage new-build over retrofit in construction by charging 15-20% VAT on the latter but none on the former. This is despite clear evidence that retrofitting instead of new-build is the fastest way to decarbonise the construction sector.

Part Z is the UK construction industry’s proposed amendment to the UK Building Regulations 2010 to limit embodied carbon in construction, for which there is broad industry support. I am a Part Z co-author, and I am hopeful that such legislation limiting embodied carbon, by virtue of the relationship between carbon and the circular economy I pointed out earlier, will also drive a shift towards the circular economy.