The role of the circular economy in addressing the global biodiversity crisis

Aligning the circular economy and biodiversity agenda can make important contributions to the new post-2020 global biodiversity framework.

Patrick Schröder, Tim Forslund and Malena Sell, 18 May 2021

This year provides a key opportunity for the global community to agree on new solutions to address the pressing issue of biodiversity loss which is declining at its fastest rate in human history with nearly 1 million species at risk of extinction over the coming decades.This is a problem, not only because the world relies on terrestrial and marine ecosystems to remove over 60 per cent of carbon emissions from the atmosphere every year, but also because ecosystems sustain the quality of water, air and land that human wellbeing relies on.The human impact on the biosphere has already exceeded its regenerative rate – one of the key concerns of the Anthropocene – as emphasised in the Dasgupta Review. Indeed, the largest material flows in the global economy are biological resources and one of the main drivers of biodiversity loss is our current linear and extractive food system.

It disrupts natural nutrient cycles at multiple scales as habitats are converted to farmland and intensive production degrades land necessitating even more land conversion. Furthermore, the consumption of resource-intensive foods, the large-scale use of grains for animal feed and excessive food waste by consumers all aggravate pressures on biodiversity too.

In light of this, the International Resource Panel estimates that half of total global greenhouse gas emissions and more than 90 per cent of biodiversity loss related to land use and water stress come from resource extraction and processing.

But, in addition to industrial agriculture, poorly managed mining operations pollute the environment and damage biodiversity too, especially in the developing world. Tailings dam failures, for example, account for some of the major mining-related environmental disasters in recent years.

Furthermore, the transition to a low carbon economy is expected to drive further demand for metals and minerals related to the extractive industries. For example, EU countries are estimated to require up to 18 times as much lithium and five times as much cobalt in 2030 as they do now – replacing today’s reliance on fossil fuels with one on raw materials. This growth in metals demand will directly drive biodiversity loss if demand continues to be met by linear extraction processes only rather than by closed material loops and urban mining.

Meanwhile, aquatic ecosystems are threatened, not only by extensive overfishing, but also pollution stemming from linear production and consumption systems on land. Sewage pollution, for example, threatens the health of aquatic ecosystems with contamination hotspots especially found along coral reefs and fish-rich river systems.

Moreover, plastic pollution, a result of the linear use of plastics without consideration of the material’s end-of-life, is having a significant impact on marine biodiversity and the marine food chain even in remote geographic areas like Antarctica.

The global trade system, too, is a factor impacting biodiversity as current global trading practices are built on the premise of a wasteful economy that does not account for externalities. For example, intense competition is driving down prices in a trade framework where ecosystems pay the real price. This is particularly pronounced in the agricultural commodities sector as well as the extractives sector which has seen trade in biomass, fossil fuels, metals and minerals increase by 90 per cent over the past two decades, according to the International Resource Panel.

Circular solutions for biodiversity

In order to tackle all of these issues it is necessary to develop solutions at the source of the problem. The circular economy aims to reduce the overall level of resource consumption and waste output by getting more value from the resources we use and keeping that value in the economy for as long as possible through designing out waste and shifting from owning products to using services.

In principle, the circular economy could help, not only to slow and eventually halt biodiversity loss, but also reverse its decline, by restoring ecosystems and rebuilding natural capital.

However, as a systems approach, the circular economy is currently not receiving sufficient attention. The regenerative and restorative dimensions of the circular economy have traditionally not been included in the well-known 3Rs – ‘reduce, reuse recycle’ – based on the waste hierarchy and yet it has a key role to play for biodiversity.

The 3Rs focus on reducing the negative impacts of human activities by ‘turning off the tap’ on waste, pollution and resource demand while a second set of 3Rs – remediation, restoration and regeneration – shift the focus to the positive impacts of reversing the world’s degrading ecosystems. Importantly, the positive 3Rs are not more important per se and turning off the tap on increasing waste and pollution should continue to be a priority.

‘Turning off the tap’ and creating positive impact for biodiversity through circular economy approaches. (Based on the waste hierarchy and Science Based Targets Network.)

Examples of remediation models include activities to remove pollutants from contaminated land, soil and water caused by open landfill sites, industrial pollution or mining sites. For many heavily contaminated locations, remediation will be necessary before restorative and regenerative practices can be started to aid the natural processes of decontamination used in biological-based technologies such as phytotechnologies and microbial processes. In Europe alone, 342 000 contaminated sites have already been identified but only about 15 per cent of these sites have been remediated so far.

Restorative circular models, on the other hand, include principles and standards that accelerate the recovery of an ecosystem with respect to its health with a focus on permanent changes in the state of the system, for example, solutions that can flip the dynamic from a state of continued degradation to one of net-positive improvement.

Regenerative circular models, however, focus on solutions designed within existing land uses to increase the biophysical function and/or ecological productivity of an ecosystem or its components including specific nature-derived contributions to human wellbeing. One example is regenerative agricultural practices, such as agroecology, that often focus on carbon sequestration, soil health and crop diversification. Aquaculture practices can contribute to regeneration, too, through nitrogen and phosphorus retention.

Merging circularity principles into the bioeconomy

The concept of the ‘circular bioeconomy’ combines the circular economy and the bioeconomy – a conceptual approach that focuses on replacing non-renewable or fossil fuel derived products, such as chemicals and energy, with ones from renewable biological sources. It not only includes bringing circularity principles to the bioeconomy but also a focus on global health and non-market contributions to wellbeing from biodiversity and natural and social capital.

Renewable natural resources, such as tropical forests, fish stocks and cropland, are already under pressure through over-exploitation. But there are potential trade-offs associated with shifting from non-renewable resources to renewable ones that could further reduce the regenerative capacity of ecosystems. For example, bioplastics productioncould increase competition for different land uses and potentially have a negative effect on biodiversity.

The bioeconomy therefore needs cascading approaches, coupling renewable resource use with circularity principles, in order to achieve higher-value bio-based products which increases their lifetime while reducing their impact on our ecosystems.

But, it is important to ensure that we get as much value out of the biomass we use through integrated production chains. This can be achieved through cascading steps – repeated material applications over the direct energetic use of biomass – to enable a more resource-efficient use of biomass.

Biodiversity-based agroindustries are a promising means of ensuring that biodiversity protection is integrated into practices. Biorefineries, for example, can increasingly use various organic materials, such as agricultural waste products, as input in higher-value products such as biochemicals.

However, as biomass becomes increasingly valorized, giving us more from less, there is no guarantee that these efficiencies will automatically be a boon for biodiversity unless they are paired with an effective conservation of land.

Developing countries have, over the years, proposed including products derived from the natural environment to replace unsustainable products as a priority for tariff liberalization in the trade of environmental goods and services. Indeed, in 1996, UNCTAD adopted a set of BioTrade principles and criteria which are relevant to the circular economy today.

Changing the linear food system

The area of land used for agriculture has increased by around 5.5 times since 1600 – and is still increasing. Indeed, a large amount of biodiversity loss is caused by growing feed crops for intensive animal farming and clearing land for pasture. Currently, cropping and animal husbandry occupy about 50 per cent of the world’s habitable land, while animals used in farming account for 60 per cent of all mammal species by mass, compared to 4 per cent for wild animals and 36 per cent for humans.

Circular agriculture, being based on the principle of optimizing the use of all biomass, presents several opportunities for less waste. There are many new and old practices available to facilitate a shift to circular regenerative farming, hydroponics, aquaponics and urban agriculture where the waste stream of one supply chain can be the raw materials for another.

But achieving this kind of circular agricultural system will require smart integration between plant-based and animal-based supply chains which, in some cases, would require regulatory changes. Indeed, changing diets away from animal-based products is a key element for reversing the current trend of biodiversity decline and alternative proteins and plant-based meat products have an important role to play in reducing biodiversity loss from livestock farming.

Given that around a third of all food that is produced is wasted, food waste reduction is an important element of food system transformation too. However, food waste reduction is impeded by the current linear food production economy which does not factor in environmental costs, for example, as food prices have fallen over time, it has become increasingly economically rational to waste food, while, at the same time, the costs for recovery, collection and reprocessing food waste into circular products – such as biofertilizer – continue to be high. These barriers are underpinned by international food value chains – with planetary-level impacts.

Circular nature-based solutions

Nature-based solutions (NBS) offer an important means of restoring natural infrastructure and ecosystems, including forests, wetlands and soils, all of which are important carbon ‘sinks’.

However, they could risk further degrading biodiversity rather than supporting it. For example, the planting of non-native monoculture forests may be prioritized over other approaches that could deliver more carbon sequestration and biodiversity-supporting habitats. Such a tree-planting project could result in poor soil biodiversity thereby making it more difficult to sustain a diverse forest in the future.

Aligning circularity principles with NBS, however, could help to limit any unintended side effects. In the first instance, leaving areas to naturally regenerate from existing seed banks in the ecosystem would need to happen. If tree planting is also needed, polycultures that incorporate multiple species suited to the geography and climate, or agroforestry sites that intercrop trees with food crops, would deliver multiple benefits.

In the built environment, there are multiple synergies between the circular economy and NBS that can contribute to enhancing biodiversity in urban spaces, too, while also maintaining the provision of urban ecosystem services. This includes green building materials such as biocomposites with plant-based aggregates, green building systems employed for the greening of buildings by incorporating vegetation in the building envelope and designing green building sites which emphasize the value of vegetated open spaces and water-sensitive urban design.

Until now, the global biodiversity-trade discourse has focused on a limited range of endangered species and coherence between multilateral environmental agreements and trade rules. In regional trade agreements, the focus is being broadened to deforestation-free value chains, with the EU with such a regulation underway.

Much is also happening in the private sector through initiatives on sustainability standards, private labelling initiatives and supply chains due diligence.

Looking forward

To date, many circular economy policies have largely neglected the issue of biodiversity. Even the new EU Circular Economy Action Plan only has limited direct references to biodiversity and contains too little detail about how circular economy strategies reduce biodiversity loss or how it can contribute to rebuilding ecosystems. Similarly, the references to a circular economy in the EU 2030 Biodiversity Strategy are vague. What is needed is the linking up of circular economy policies and legislation.

Circular economy and biodiversity conservation policies:
The potential contribution of the circular economy to biodiversity needs to be recognized and its implementation significantly stepped up. Importantly, circular economy solutions should not replace biodiversity conservation and the protection of ecosystems. Instead, circular economy solutions, alongside conservation efforts, are needed to bend the curve on biodiversity loss.

Circular economy, biodiversity conservation and COVID-19 policies:
Rebuilding biodiversity must be factored into recovery plans from the COVID-19 pandemic for a truly green recovery. Directing finance from industrial monoculture into more circular and species-rich systems in agriculture, aquaculture and forestry through sustainable investment policy frameworks presents a significant opportunity.

Consumption patterns: In terms of food consumption, the European Green Deal highlights the need for new sources of protein that can relieve pressure on agricultural land. As part of its recovery, France intends to direct 100 million euros to the development of plant-based proteins. The alternative protein market alone could create 30 million jobs and account for 10 per cent of the meat market over the next decade. In this vein, policy measures that steer consumers towards a more sustainable direction, both in terms of products consumed and the overall levels of consumption, will play a key role.

Trade policies: At the multilateral level, parties to the World Trade Organization are showing new interest in sustainability, climate and the circular economy. Structured discussions on trade and environmental sustainability were launched in late 2020 and many members are pushing for a new negotiating initiative at the upcoming Ministerial Conference in December 2021. Concretely, parties may choose to engage in negotiation to liberalize trade in environmental technologies, goods and services. If so, technologies that help drive the transition to a circular economy in a way that supports biodiversity goals should be included. These could be technologies for materials and water efficiency as well as sustainably produced materials and goods from the natural world.

Environmentally harmful subsidies and incentives:
Sustainable Development Goal (SDG) 12 on sustainable consumption and production is crucial. This includes phasing out harmful fossil fuel subsidies and phasing out agricultural, and other, subsidies specifically impacting biodiversity often also distorting global trade flows. In addition, taxing activities that lead to biodiversity loss, while incentivizing new, circular solutions, should be part of a larger package to encourage regenerative circular practices in Environmental Fiscal Reforms.

Public data: Data on the potential impacts of dramatically increasing renewable resource use as a substitution for non-renewable fossil fuel-based materials and the impacts on biodiversity, land use and climate change, is currently not available particularly in relation to biodiversity. This data is crucial in order to set national and global targets on maximum levels of extraction and develop specific roadmaps for industries. High-quality data will be important for setting new policies and regulations as well as for monitoring and enforcing such policies and regulations effectively.

These various circular economy approaches supporting biodiversity can make a crucial contribution to biodiversity by addressing problems at the source. Aligning circular economy, biodiversity and bioeconomy concepts and practices provides a strong framework that can be used to develop and implement regenerative and restorative solutions for ecosystems.

Many of the solutions that exist have proven their feasibility in practice but require decisive policy action to be implemented at scale, such as trade policy reform, phasing out environmentally harmful subsidies and shifting food consumption patterns, which are key areas for policy action.

2021 is a unique opportunity to accelerate global action for biodiversity protection. Aligning the circular economy and biodiversity agenda can make important contributions to the new post-2020 global biodiversity framework under the Convention on Biological Diversity (CBD), as well as to the recovery from the COVID-19 pandemic.