New study: Building a circular future, safeguarding resources

The transition to a circular economy in Germany would have substantial positive effects on the climate, resource conservation and biodiversity. The German economy would also make significant gains in security of supply and reduce its dependence on critical resources. These are some of the findings of the Model Germany Circular Economy (MDCE) study conducted on behalf of WWF Germany by the Oeko-Institut, Fraunhofer ISI and FU Berlin and published today. Together with the Policy Blueprint, the study establishes a scientific basis and includes practical measures, instruments and impact assessments.

“Our hunger for resources seems to be insatiable – and it has led us straight into the burgeoning triple crisis of global warming, species extinction and environmental pollution,” says Rebecca Tauer, manager of the Circular Economy programme at WWF Germany. For example, at 16.4 tonnes per capita, German raw material consumption was approximately 13% higher than the EU average in 2018, and resource extraction and processing in Germany account for 40% of our greenhouse gas emissions. “The circular economy offers us a way out of this dead end by providing a substitute for our linear ‘take-make-waste’ economy. What has been lacking until now, however, is a practical and holistic vision for transitioning the German economy to a genuine circular economy.”

A circular economy offers real climate and biodiversity gains

The overall societal benefits of a circular economy are significantly higher than the socio-economic costs associated with the transition, according to the study. “The transition to a circular economy can reduce greenhouse gas emissions by as much as 26% and resource consumption by up to 27% by 2045,” says project manager Siddharth Prakash, Head of the Circular Economy and Global Value Chains Subdivision at the Oeko-Institut. “Cutting resource consumption and decoupling from economic growth are essential to keep within planetary boundaries in future. With Model Germany, we are providing key impetus for policy-making on a future-fit, sustainable and competitive economy.”

Almost 84% of the greenhouse gas emission savings can be realised across the assessed sectors with just five bundles of measures. “Less residential and office space, less private transport, more plant-based nutrition, resource-efficient data centres and reduction of textile consumption are approaches that will have a significant impact,” says Siddharth Prakash. “These measures would also reduce land use by 30% in the assessed sectors and thus help to conserve biodiversity.”

Far more security of supply with a circular economy

Some raw materials are essential for a successful energy and mobility transition but cause major environmental damage and are critical in terms of their supply situation and economic significance. “Model Germany shows that Germany’s demand for raw materials can in many cases be reduced with less consumption and more recycling,” says Antonia Loibl, a researcher at Fraunhofer Institute for Systems and Innovation Research ISI. “For neodymium, cobalt and copper, for example, the demand assumed for 2045 can be covered to more than 50% by the appropriate circular economy measures identified in Model Germany. The risk of supply bottlenecks is also reduced by circular economy measures.”

Actively shaping the transition

“To make the vision, guiding principles and objectives of a circular economy a reality, a firm commitment is required. And for that, a governance structure for a resource conservation law – analogous to the Federal Climate Change Act – is crucial,” says Klaus Jacob, Head of the Policy Assessment Research Group at FU Berlin. The mechanisms that would promote circular economy measures are broadly familiar but they must be refined and their level of ambition substantially increased in order to have the desired environmental steering effect. For example, tax and financial policy should provide better incentives for a circular economy approach, the public sector should commit to integrating environmental aspects into its planning processes, and manufacturers and distributors must take on more responsibility for their products, according to the study.

The authors of the study recommend that by the target year (2045), per capita raw material consumption should not exceed seven tonnes annually; raw material consumption should also be reduced in absolute terms to around 500 million tonnes. In addition, Germany’s Circular Material Use Rate should be increased to 25% by 2030.

“Germany needs to make up ground with the circular economy as a matter of urgency and thus unlock the dormant potential for mitigating climate change and conserving biodiversity. With that in mind, the German government should adopt an ambitious and practical national circular economy strategy by next year,” says Rebecca Tauer from WWF Germany. “The circular economy will strengthen Germany’s long-term position as a place to do business and is the key building block for an economy that respects planetary boundaries.”

Background

The modelling study starts with the status quo, i.e. the German economy and the assessed sectors in their current state. On that basis, the study models four scenarios with a target date of 2045: a baseline scenario, a technology scenario, a behaviour scenario, and an ambitious MDCE scenario. Each scenario varies in terms of the quantity and quality of the implemented measures. The focus is on circular strategies which are applied upstream in production and use, rather than in relation to downstream waste later on.

The Policy Blueprint follows on from the modelling study and maps out the path of the transformation to an ambitious circular economy. The Blueprint describes several mutually supporting core elements: vision and guiding principles; targets and indicators; governance; and policy instruments to implement CE measures.

The vision includes five action strategies to contribute to the overall environmental goals such as climate and biodiversity protection: reduction of resource flows; material substitution; slowing resource flows; intensification of product use; and closing resource loops.

For each sector, specific instruments are defined and described in detail. In addition, sector-specific characteristics (e.g. opportunities and challenges) of the implementation of framework-setting instruments are addressed and windows of opportunity identified. The assessed sectors are: building construction and civil engineering, vehicles and batteries, ICT and household appliances, food and nutrition, textiles, packaging, furniture, and lighting.

The “Model Germany Circular Economy” study was funded by EDEKA, the Otto Group and Vodafone. The Bertelsmann Foundation is supporting the project as a Knowledge Partner.

Modell Deutschland Circular Economy. Eine umfassende Circular Economy für Deutschland 2045 zum Schutz von Klima und Biodiversität [Model Germany Circular Economy: An ambitious circular economy for Germany in 2045 to protect the climate and biodiversity]: Brochure

Modell Deutschland Circular Economy. Modellierung und Folgenabschätzung einer Circular Economy in 9 Sektoren in Deutschland [Model Germany Circular Economy: Modelling and impact assessment of a circular economy in nine sectors in Germany]: Study by the Oeko-Institut, Fraunhofer ISI and FU Berlin

Modell Deutschland: Circular Economy. Politik Blueprint
[Model Germany Circular Economy: Policy Blueprint]: Oeko-Institut/FU Berlin study