The COVID-19 recovery requires a resilient circular economy

The COVID-19 recovery requires a resilient circular economy
Jocelyn Bleriot
Fri, 05/29/2020 - 01:00

The COVID-19 crisis has disastrous human and economic consequences, revealing our system’s exposure to a variety of risks. The call for a more resilient, circular and low-carbon economic model has garnered support from a growing number of businesses and governments over the past few years, and appears today more relevant than ever. Identifying opportunities, keeping a clear sense of direction and fostering a strong public-private collaboration will help usher in redefined growth towards the next wave of prosperity.

As the pandemic forces us to adapt our daily lives in ways we would not have imagined, it also challenges us to rethink the systems that underpin the economy. While there is no question that addressing public health consequences is the priority, the nature of the equally crucial economic recovery effort raises some interrogations. Should stimulus packages focus on finding the way back to growth by kicking business as usual into overdrive, or could they accelerate the shift that has already started towards a more resilient, low-carbon circular economy?

One way to tackle this polarizing question is to reject the idea that rapidly getting back to economic dynamism is incompatible with a wider system transition. Given the sums at play and the unprecedented — in peace times — rise in prominence of public authorities, this isn’t a simple equation to resolve, yet there are signs of agreement on the horizon. While the European Bank for Reconstruction and Development has declared it will devote its entire activities to addressing the economic impact of the pandemic , the Investor Agenda group, which collectively manages trillions of dollars in assets, said that "Governments should avoid the prioritization of risky, short-term emissions-intensive projects."

As witnessed in countries severely hit by the virus, being able to quickly adapt industrial facilities and shift production — of automotive to medical equipment parts, for example — has been crucial.

The recovery effort will, of course, require a variety of strategies. Looking at the pre-COVID-19 landscape, it is clear that momentum already had been increasing around the need for a system reset, with a visible consensus on the potential of a circular model. Over the course of the last decade, a number of leading businesses have stepped onto and invested in this transformative path, while pioneering institutions and government bodies put forward significant legislative proposals to enable the transition. This is notably true in the European Union and in China but it plays out in other regions as well, at national and municipal levels with the same degree of vitality.

Far from pushing that agenda to the bottom of the list, the current crisis makes the circular economy more relevant than ever, as it...