How the Circular Economy Can Ensure a Just Global Energy Transition

As the world focuses on reducing greenhouse gas emissions and decarbonizing energy, moving away from fossil fuels is a primary objective. But this change brings with it a new set of challenges — namely how to provide the resources for cleaner energy without repeating the mistakes of the fossil fuel economy, such as devastating impacts on the environment, loss of  biodiversity, destruction of local communities and wasted resources. 

One approach, which was the focus of a roundtable discussion during the COP27 climate talks, highlights the ways that incorporating a circular economy framework into the development of clean energy can contribute to a just transition — as in shift to a low-carbon global economy that is socially equitable, financially viable and environmentally regenerative.

Incorporating the circular economy in the energy transition

Unfortunately, the transition to new sources of energy will require a ramp up of mining for new materials while we move away from fossil fuels. A recent U.S. Department of Energy study, for example, suggests that the U.S. energy system will need more than 3 terawatts of solar capacity in order to decarbonize, which is more than a 40 percent increase over current capacity. Since solar panels require metals and minerals like cadmium, gallium, copper and zinc in order to work, more solar capacity means greater demand for these materials. 

It is possible to apply the lessons that have been learned from current mining practices to reduce the impact moving forward. Furthermore, increasing efficiency and designing for reuse of materials can reduce the overall need for materials and ultimately lead to a reduction in extraction. 

The Energy Transitions Commission — a global coalition of energy producers, energy-intensive industries, technology providers, financial players and environmental NGOs that are committed to achieving net-zero emissions by mid-century — is looking at several different scenarios to reduce impact. That includes exploring how to reduce the current projected need for new materials through increasing efficiency and developing circular strategies for recycling and reuse of materials, Mike Hemsley, deputy director of the Commission, said at COP27. Furthermore, technologies that utilize materials that are currently available in abundance are being examined.

At the other end of the lifecycle, the U.S. National Renewable Energy Laboratory (NREL) is developing strategies to deal with solar waste. These include designing “integrated energy systems'' that combine advancements in generation, storage, efficiency and smart controls; moving toward zero-carbon manufacturing and materials; and identifying and utilizing alternative materials that are most “Earth abundant” and “most benign,” said Ron Benioff, international program manager for NREL. 

At this time, recycling solar waste is more expensive than disposal, Benioff said. But policy innovations — including setting standards for recyclability, offering financial incentives and engaging in consumer education — could offset this and support circularity, he told leaders at COP27. 

Enel, a global utility company based in Italy, has identified a process to provide clean energy through a circular economy by relying on renewable and recyclable resources — and requiring its suppliers to do the same.

The company is working to achieve circularity “not only by recycling but by design,” said Luca Meini, head of sustainability initiatives and circular economy at Enel. The company began offering financial incentives and collaboration with its more circular suppliers, and Meini says that circularity has to be a part of the framework of the core business. The result has been profound, and the company has continued to make a profit.

Pushing toward a just transition

There is a “dual mandate to build the decarbonized future and to think today about how we create the financial and business models and distribute our finance and support in ways that will allow that to go forward in a more equally distributed approach,” said Jennifer Layke, global director of the Energy Program at the World Resources Institute (WRI). 

To this end, she identified three areas of focus. These include “to innovate product design at the outset” to minimize material use through reuse of resources that are currently available. Stakeholders must also work to identify the “business model shifts” that will be required to create “lifecycle opportunities” for takeback and circularity, and they’ll be challenged to address the “inequality in benefits to the communities that are impacted by the extraction and production of materials,” Layke said. 

When looking to decarbonize, energy stakeholders must “start projects from the beginning that are going to benefit the local economy and not have adverse impact on the local environment,” Hemsley of the Energy Transitions Commission added. “Once those projects are done, how can you then return the land to what it was before so you can have as little impact as possible?”

The public has the power to push this vision into reality, Hemsley insisted — pointing to consumer activism that spurred recent changes in the auto industry. As consumers grew more aware of problems with cobalt mining, automakers have moved swiftly to replace cobalt with nickel in electric vehicle batteries, and stakeholders are continuing to push the industry to more closely consider environmental impact and human rights when sourcing EV battery components.

Image credit: Matthew Henry/Unsplash