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Leveraging innovation for the circular economy

Innovation circular economy

As world leaders gather in Glasgow for COP 26, there is increasing recognition that the transition to renewable energy is vital to tackle climate change. The circular economy aims at sustainable production, consumption and resource use by minimizing pollution, turning waste products into productive assets, extending product lifecycles and sharing of products and services. It strives for a competitive economy that creates green and decent jobs and keeps resource use within planetary boundaries.

In recent years, the circular economy has become part of key national and international policies. The EU Green Deal, with the overarching objective for the EU to become the first climate neutral continent by 2050, calls for the circular economy transition. There is global awareness of the need to go circular and considerable progress has been made. UNECE member states have already pledged to step up their commitments for circular and sustainable resource use at the UNECE’s 69th Commission session in April 2021. Yet, still less than ten per cent of global economic activity is circular.

The time to act is now, but the transformation of production and consumption systems will not happen overnight. The Ellen MacArthur Foundation highlights a tendency to think that we face a simple choice between going linear and circular. Yet, existing models, incentives, and structures are primarily designed for linear production and must be re-thought for a successful transition to the circular economy. A systematic approach is needed to open up circular economy opportunities, to drive supply and demand and establish the landscape for innovation and the circular economy to flourish.

To explore how innovation can drive the circular economy transition, share best practices and identify policy recommendations, on 1-2 November 2021, representatives from member states, academia, NGOs and international organizations met at the thirteenth session of the UNECE Team of Specialists on Innovation and Competitiveness Policies (ToS-ICP).

Simply promoting innovation is not enough. To support a circular economy, innovation needs to be pursued with that objective in mind.  To fully realize the potential of innovation for the circular economy will require dedicated and sustained policy efforts to create enabling frameworks and incentives for private innovation efforts and to encourage consumers to rapidly and broadly adopt innovative and more sustainable consumption patterns. This will also require innovative approaches to regulation to provide incentives and eliminate barriers and a strong role for education, to empower consumers for circular choices.

In Scotland, Zero Waste Scotland has put in place a wide range of supporting tools, including business support services to help find new growth opportunities for small and medium-sized enterprises (SMEs); an investment fund providing grants to SMEs; a business support network to exchange best practices; and circular economy innovation workshops to improve knowledge and capabilities.

In Finland, 60 policy actions were identified to support circular business with the identification of key sectors such as food chains, transport, logistics and construction. Among the actions, education and capacity building have a prominent role to create the skills to go circular and change business models but also to increase awareness among consumers and change established behaviours.

Demand side policies are also an important tool for the circular economy transition. This is the case for innovation-enhancing procurement, through which governments can stimulate better environmental and social performance of products and build circularity into their economies. In Austria, a dedicated national centre acts as a broker connecting innovative companies with public procurers. They offer an innovation platform, networking and events, strategic consultancy, trainings, pilot projects and financial support. With innovative procurement, tenders are formulated around the impact envisaged – circularity – allowing flexibility for bidders to come up with different solutions to achieve it.

Partnerships and collaboration among national and sub-national entities, business and public sector actors as well as consumers and local communities are needed for the circular economy transition. Regions and municipalities have a major role to play in circular economy strategies and roadmaps, and as a laboratory for experimentation with new ideas, based on bottom-up approaches with strong buy-in from citizens, consumers and business, as showcased by leading examples, such as the city of Glasgow.

UNECE through its various workstreams (e.g., innovation policy, supply chain transparency and traceability, trade, and public-private partnerships) is supporting member States in the circular economy transition by offering a platform for learning and knowledge sharing, providing policy advice and recommendations and capacity building. On 28 October UNECE launched  a new capacity building project on “Accelerating the Transition to Circular Economy in the UNECE Region” to help countries address challenges and harness opportunities in key areas, including traceability of supply chains, innovation-enhancing procurement, and the management of waste.

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