The EU recovery fund can be used to unlock an estimated €1.8 trillion opportunity by 2030 by making better use of materials and reducing waste, write Patrick Schröder and David McGinty.
Patrick Schröder is senior research fellow at Chatham House, a leading UK think-tank. David McGinty is Global Director of the Platform for Accelerating the Circular Economy (PACE), a platform for global leaders and their organisations to accelerate the transition to a circular economy.
European countries have set out competing visions for the region’s COVID-19 recovery plans in the last week. France and Germany first proposed a €500 billion recovery fund to help eurozone economies affected by the coronavirus, followed by a separate proposal from the so-called ‘frugal four’ – The Netherlands, Austria, Denmark, and Sweden.
While there are some significant differences between the plans, they both refer to the need for a green transition. This unprecedented economic stimulus provides the EU with the opportunity to go even further and accelerate the shift to a circular economy. In a circular economy, goods are designed to last, consumption and waste is reduced, and resources are maximised. Putting the circular economy at the core of the EU economic recovery will help to build more resilient economies and societies, produce new economic opportunities, and help to meet climate targets. The EU recovery fund can be used to unlock an estimated €1.8 trillion opportunity by 2030 that the circular economy offers, by making better use of materials and reducing waste. In addition, a more circular economy can reduce carbon dioxide emissions by about 3.6 billion tonnes per year globally and take EU industry halfway towards net-zero emissions.
Three elements will be crucial for the EU’s shift to a more circular economy.
- First, use the green stimulus to ensure progress on the circular economy is not further reversed by the COVID-19 crisis
- Second, promote more resilience to safeguard against resource shortages and supply chain risks
- Third, promote the EU’s global leadership on the circular economy through international cross-sector cooperation to support a recovery, which is also just and inclusive.