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Innovation, including technological change and the introduction of new practices and business models, plays an important role in advancing circularity and improving the management of natural resources. It can reduce the cost of circular practices, make them economically feasible, and broaden the scope of use of circular products.

Creating the demand for circular products

  • The public sector can be a significant source of demand to steer the economy towards increased circularity, as public procurement globally accounts globally for 13–20 per cent of gross domestic product (GDP). In the EU, purchases of goods and services by the public sector represent an estimated 14 per cent of GDP. Sustainable public procurement can also facilitate critical cooperation across sectors and value chains by aiming to find solutions to specific problems rather than targeting change only in a particular sector. UNECE Environmental Performance Reviews and Innovation for Sustainable Development Reviews underscore the importance of appropriate guidelines and capacity-building initiatives for the deployment of this powerful transformational tool.
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  • The international harmonization of purchasing practices in support of a circular economy encourages innovation. A UN/CEFACT Policy Recommendation on Sustainable Procurement offers approaches and criteria for the purchase of sustainable and circular products and services along the entire value chain.
  • Within the United 4 Smart Sustainable Cities (U4SSC) initiative, UNECE and partners have developed a Guide for Circular Cities, which can help more urban areas take action for the circular economy. 

Replacing materials with sustainable alternatives

  • Using renewable wood-based products from sustainable managed forests instead of, for instance, plastic, concrete or steel reduces the pressure on resources. These products are also recycled or reused to a larger extent than other materials. Co-benefits for climate change mitigation can be significant: according to the Ellen Macarthur Foundation, European forests and the forest-based bioeconomy have the potential to capture around one quarter of current carbon emissions in the next three decades. Together with FAO, UNECE promotes the role of forests in a circular economy and the potential role of new products, such as materials like lyocell in the textile industry, which can replace more water and resource thirsty materials like cotton. Forest certification is also necessary to give confidence to producers and consumers that forests are managed sustainably.

New practices in a sharing economy

  • Helping to avoid wasteful under-use of resources, a circular economy is supported by sharing platforms and business models. More generally, shifting from a product to a service model can contribute to maximizing efficiency and reducing waste. For example, cities can integrate shared mobility initiatives as part of sustainable urban mobility plans, helping to reduce local congestion, pollution and the demand for private vehicles by using existing ones more efficiently. This has been a focus of work of the Transport, Health and Environment Pan European Programme (THE PEP). UNECE has also issued guidance to help scale-up car-pooling and car-sharing in Central Asia.
  • Changes in technical provisions and other regulations may facilitate the extension of such models. UNECE is developing digital keys, which will facilitate car-sharing. This would open the door to more efficient use of vehicle fleets and a reduction in the number of vehicles needed for the same number of trips.