September 15, 2021
Four years ago, G7 Ministers endorsed strong evidence that the circular economy “can be a major driver to attain economic growth and employment, and can bring about environmental and social benefits together with long-term economic competitiveness and prosperity”. In the intervening months, with accelerating climate, biodiversity, and pollution indicators accentuating the limitations of our current, ‘linear’ production systems, the imperative for a more circular economy has only become more pronounced.
As the shift to a more circular economy gains traction worldwide, it’s past time for Canada, too, to lean in and assert its own path. Many elements of a Canadian strategy can be informed by the circular economy strategies and policies of early adopter jurisdictions. But Canada’s path will also need to prepare our primary resource producing sectors for a world where secondary materials supply a growing portion of global demand, and where markets demand materials that are more recoverable, reusable and recyclable, and that can be traced back to demonstrate sustainability and circular principles at each step of the way.
The Smart Prosperity Institute has been working to identify the key elements of such a ‘made-in-Canada’ strategy. In particular, SPI has been developing new research on the role of Primary Materials in an Emerging Circular Economy exploring the real-world implications of a low-carbon, circular economy transition for primary resource producing economies such as Canada’s.
While reducing the flow and intensity of primary material inputs and waste generation is central to an effective CE transition, the relevance of globally emerging CE policy discussions for economies with significant primary resource-producing sectors is not well understood. Our initial research finds that early strategic thinking and policy development on the circular economy have been led by resource-importing economies, and perhaps for this reason have a downstream focus on closing the loop for materials now flowing out of the economy as ‘waste’. The development of the circular economy concept to date has left primary resource sectors and producers on the periphery, as flows to be minimized, instead of incorporated into more circular value chains.
Yet the concurrent imperative to transition to a low-carbon economy presents an inconvenient truth: in the short-to-medium term, meeting low carbon targets will require extraction of some primary materials, such as minerals and metals, to not just continue but increase, even with extremely aggressive targets to improve material recycling, reduce waste, and improve circularity.
What do these combined transitions mean for economies such as Canada’s? We need improved understanding of the policies and practices that may be needed to support natural resource producing economies such as Canada’s in an increasingly circular, but also materially intensive global economy. This suggests that public policy must consider smart incentives for circular innovation along the entire value chain, so that both primary and secondary commodities become more sustainably sourced, but also so that downstream end-users design products and demand materials that are more recoverable, reusable and recyclable, and that can be traced back to demonstrate sustainability and circular principles at each step of the way.
The good news is that Canada begins its journey to a circular economy with two strong advantages: the opportunity to learn from international experience, and a strong set of pre-existing clean-tech oriented government funding programs and innovation startup ecosystem which have boosted Canada’s to 2nd spot in the Global Cleantech Innovation Index. Although currently designed primarily around carbon reduction commitments, the two decades of investment in this ecosystem offers a robust initial platform from which to build out timely and wide-ranging policies and programs to support circular innovation.
While a strong feature of the transition to a circular economy is that it is generally seen as business-led, robust public policy is critical to incentivizing CE innovation. Expanding the application of extended producer responsibility, which holds manufacturers responsible for the entire life-cycle of their products and especially for the take-back, recycling, and final disposal, is the backbone for any policy plan for a circular economy. But a key take-away from international experience on circular economy is that many other policies and programs are also necessary: common roadmaps to orient actors in complex systems; knowledge networks, data and metrics to understand opportunities and identify progress; information sharing platforms to share best practices; investments in innovation accelerators and clusters to test new approaches; use of procurement dollars to grow markets; and education and training to develop the skills to be competitive in this emerging economy.
Canada does have a patchwork of some of these policies already, but for a scattering of products, and with fragmented approaches across federal, provincial, and local government levels. The growing number of sector- and community-based circular economy initiatives and new businesses are struggling in that fragmented patchwork. Canada is missing an integrated circular economy strategy, and one that doesn’t leave resource producers on the periphery. To get there, we can call on a third Canadian advantage: a long legacy of working in collaborative fora with government, industry, and civil society stakeholders to develop shared strategies. A commitment to launching this could be the legacy of this week’s World Circular Economy Forum.