Race to Net-Zero: Is the Circular Economy the Missing Piece? 

In our first article on net-zero, we took a closer look at its meaning, and the planned timeline to get there. As a circular economy innovation firm, the team at 5REDO keeps a close eye on the climate change and sustainability realms, including the concept of net-zero. So how does it fit into the movement towards a circular economy, particularly here in Canada? Here, we break down some of the key components. 

Zooming in on the energy sector 

As outlined in the first article for this series, net-zero usually refers to net-zero emissions, specifically of greenhouse gasses (GHGs) that contribute to the warming of our planet. Most people associate GHG emissions with the energy sector, such as from vehicles (with combustion engines) or from the burning of fossil fuels.  

There’s a good reason for this – in the United States, the Environmental Protection Agency (EPA), found that about 29% of GHGs come from transportation, 25% from electricity, and 23% from industry. The picture is similar here in Canada, with the oil and gas and transport sectors being the two largest GHG emitters, accounting for more than half of total emissions (based on 2019 data). Other economic sectors like construction, agriculture, and waste, together produce between 7-12% of emissions. 

Though the G7 nations have different social or economic landscapes, transport and energy remain the top sectors for GHG emissions across the globe. With this, we see how reducing emissions in these sectors has taken center stage in the discussion about net-zero – but what else is missing from the conversation? By focusing on energy, are we missing out on crucial opportunities to help reach net-zero? 

A holistic, sustainable approach 

Examining data on where most GHG emissions come from paints a clearer picture of what will be needed to achieve net-zero, and to shift to more sustainable practices. Electricity serves as a prime example – it’s often thought of as a more sustainable alternative to traditional forms of energy, and recent developments in the electric vehicle market speak to this.  

However, as the EPA data shows, current electricity production relies heavily on coal and natural gas, two significant GHG emitters. While it’s important to shift away from non-sustainable energy, it’s also crucial to consider the additional pressure that may put on alternatives, especially those that still generate emissions. In a previous piece on Canada’s single-use plastics ban, we outlined a similar scenario; while banning the use of some plastic items can be positive, there must be truly sustainable alternatives (and the means to dispose of them properly), or we’ll just recreate the same problem. 

This issue is further made clear by the ‘Highly Insufficient’ rating Canada received from the global Climate Action Tracker, mentioned in our first piece for this net-zero series. After outlining that there are not enough effective policies to achieve current emission targets, the report also points out that Canada’s net-zero target is considered average, and doesn’t cover enough ground. “While Canada’s Net Zero Act has some positive measures, it does not follow good practice on a number of other aspects, such as including emissions from international aviation and shipping into its target,” the report states.  

As outlined above, basing net-zero goals around the energy sector and neglecting innovation in other industries can leave us falling short. Like many global issues, cutting emissions and getting to net-zero will require a multifaceted approach, which brings us to another gap in the race to net-zero: factoring in the circular economy. 

The missing piece 

One thing remains evident: it will take a strong, immediate effort to reach net-zero, and many nations aren’t addressing the whole picture. Experts on the circular economy have argued that its merits have been overlooked and under-utilized in the race to net-zero. This problem is articulated well in an article by Mike Townsend of the consulting group Earthshine: 

…going circular presents a major opportunity for any organisation, serious about taking radical climate action while generating business opportunity — especially those dependent on scarce and non-renewable resources. And, given our current progress on the essential road towards net zero and beyond — with only one in 20 European companies on track to meet net-zero climate goals — it would make good sense for more organisations to explore how the alignment between circularity and climate action might work for them, rather than waiting for expensive and unknown future technologies.  

Remanufacturing parts, shifting to sustainable materials, extending the life cycle of products, and implementing circularity integration strategies are not only better for businesses, but they can play a crucial role in reaching net-zero.

The good news is that Canada can be a leader in this realm. A recent report by the consulting firm Deloitte found that Canada is well positioned to be a model for net-zero and the circular economy, with its combination of natural resources and climate leadership across various realms. For example, the report discussed the domestic “clean tech” industry, which in 2017 alone contributed more than $60 billion into Canada’s GDP and provided 282,000 high-paying jobs.

With continued support for innovation in this space and others, Canadian industry can better address net-zero goals, by continuing on the path towards a circular economy.