September 21, 2020

Resilience: The missing link in the new Circular Economy Action Plan

Resilience: The missing link in the new Circular Economy Action Plan

EU member states need to integrate resilience into their national recovery plans in order to be eligible for recovery support, write Joke Dufourmont (Circular Jobs Initiative Lead at Circle Economy), Natalia Papu Carrone (Research Analyst at Circle Economy) and Yasmina Lembachar (Digital Communications Lead at Circle Economy).

This article first appeared at EURactiv.

The new Circular Economy Action Plan (CEAP) paves a promising road towards circular value chains and the mainstreaming of renewable, regenerative and cyclable resources.

However, to ensure that the transition to a circular economy in the EU builds a resilient system–and a resilient labour market–, the CEAP still has some way to go, and upcoming CEAP actions should promote decentralised governance structures, support skills transferability, and build a stronger sociological foundation for the transition.

The new Circular Economy Action Plan, published in March 2020, is a comprehensive set of initiatives along the entire life-cycle of products that aims to ‘make the EU economy fit for a green future’.

With a focus on design, production and waste management, the plan provides a solid foundation towards resource efficiency and the transition to regenerative resources, and as such, is an important catalyst for action.

However, the Covid-19 pandemic has exposed the vulnerability of the global economy, including the EU’s, and made resilience a more salient priority for governments: EU member states, for example, now need to integrate resilience into their national recovery plans in order to be eligible for recovery support.

Resilience and the circular economy

To build resilience to future crises and to support the response to the current COVID-19 crisis, leading institutions such as the World Economic Forum and the World Bank are increasingly calling on governments to look to the circular economy.

A new analysis by impact organisation Circle Economy confirms the mutually reinforcing nature of the two concepts but advises caution around some of the circular economy practices, trends, and prerequisites that–if not managed properly–could weaken a system’s resilience.

The CEAP, published on the same day the WHO officially declared Covid-19 a global pandemic, makes no explicit mention of resilience, and as such, overlooks the systems and policies needed to effectively manage the trade-offs and opportunities that circularity presents for resilience.

How well is the CEAP doing on resilience? A scorecard
How well is the CEAP doing on resilience? A scorecard. Request supporting evidence here.

No decentralised governance structures

By bringing governance systems closer to their communities and by actively engaging all relevant stakeholders to support access and broaden participation, the decentralisation of utility systems and their governance can increase communities’ ability to respond faster to shocks, boosting their resilience in the long term.

But despite growing traction amongst citizens for decentralised systems — from grassroots, neighbourhood-scale sharing and repairing initiatives like the Repair Cafés to larger scale initiatives such as the on-demand additive manufacturing of spare parts for repairs at the RAMLAB in the Port of Rotterdam — the CEAP does not explicitly promote the development of decentralised circular economy solutions in energy, water, waste or food systems.

In addition, although citizens are referred to as a ‘driving force for the transition’, the virtual and physical spaces of participation proposed are merely described as places to ‘express ideas and creativity and work together on ambitious action’.

There are no calls for or reflections on inclusive governance processes such as public-civil partnerships, crucial in democratising the management of common-pool resources.

Lack of focus on skills transferability

Regions with higher potential for labour mobility–workers’s capacity to be employed in different sectors as a result of skills transferability–will see their labour markets recover faster after a shock.

Transferable skill sets are also a prerequisite for the transition to a circular economy, as sectors and business models evolve and labour mobility is required to support the expected increase in jobs in reverse logistics, resource sorting, or the cleaning of components in the refurbishment of products, for example.

The CEAP rightfully acknowledges the job-creating potential of the circular economy, on condition that the right skills are developed, and relies on an updated Skills Agenda to support skills and job creation.

However, transferable (or transversal) skills in particular are not central to the Skills Agenda, and while the Skills Agenda does address key elements that can increase the resilience of the labour market–skills passports or modular learning–it does not do so in the context of the circular or green transition.

This means that these elements, in turn, are unlikely to be a priority in CEAP initiatives going forward–a missed opportunity.

Lack of sociological foundation

Complex and adaptive systems require managing all environmental and social variables, as well as their feedback loops, to ensure resilience is built both in the short- and the long-term.

The circular economy is, as of yet, mainly embedded in environmental thinking and lacks a strong sociological basis to manage ‘slow’ social variables, such as legal systems, behaviours, value systems and traditions.

The CEAP reflects this lack of a sociological foundation: while the plan considers ‘fast’ social variables, such as social inclusion, through the Eco-Design Directive’s product accessibility considerations or through the involvement of the social economy with reference to the European Pillar of Social Rights, it makes no reference to said ‘slow’ social variables. It follows that there is no monitoring or governance in place to manage their development.

Making the Circular Economy Action Plan fit for resilience

The EU needs to urgently embed resilience across its circular economy plans.

In designing upcoming legislation and initiatives, the EU should:

  • promote decentralisation –in utilities first– and inclusive governance processes to manage common-pool resources. By continuing to engage citizens, social partners and industry in the transition in meaningful ways –through, for example, binding commitments to citizens and the development of citizen-led and -owned circular economy solutions–, the EU can pave the way for more resilient forms of ownership;
  • promote a skills-based labour market and promote skills transferability in the context of the circular or green transition. With the instruments and network around the Skills Agenda in place, a stronger focus on developing transferable skills can promote both resilience and the circular economy. These should take equal importance in both curricula and assessment, and can be embedded in ESCO skills frameworks as well as the Skills Agenda;
  • build monitoring and governance systems around slow variables such as culture, values and institutional change. To do so, the EU should first research the social impact of the circular economy with a focus on slow variables. This research agenda should be strongly embedded in the social sciences and political economy and not shun potential controversy or risks. Based on this research, the EU should develop circular economy governance systems that can respond to slow variables as well as the fast variable indicators currently used such as greenhouse gas emissions or job creation.

For more recommendations for governments, businesses, and education, download the ‘Resilience and the circular economy: Opportunities and risks’ report.

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