Massive circular economy potential for developing economies

Circle Economy, a Dutch think-tank, has published a new research report highlighting the enormous potential for the economies of the global south, something that Circle Economy says has been significantly underestimated. Research into socio-economic benefits of adopting a circular approach has been focused on developed economies – accounting for 84% of research to date. 

Among the conclusions from the report are that moving towards a more circular economy approach in developing economies can contribute to improving worker conditions, easing the impact of poverty and such factors as gender discrimination. Circle Economy notes that the shift can and should provide an opportunity to move away from the informal roles currently associated with circular activities, such as waste management and recycling, in many global south countries. These “gig economy” jobs bring low pay and little job security and expose workers to hazardous conditions and toxic materials. 

The report was co-authored by the World Bank’s Solutions for youth Employment Programme and the International Labour Organisation.

Representatives from developing economies have spoken out against potential loss and damage funding mechanisms that could leave some of the world’s poorest – and most climate vulnerable – countries in further debt.  

Agreements for a loss and damage fund were made at COP27 in 2022. Recently, 118 civil society organisations (CSOs) from the global south said that resources mobilised for the global fund should not come in the form of loans, which create further debt for developing countries. The CSOs from countries including the Philippines, India, Pakistan and Bangladesh said that resources must also be “additional, above and beyond any development assistance and existing financial commitments”. 

A representative cited a 2020 report by Oxfam International which found that 80% ($47bn) of all reported public climate finance was not provided by wealthy countries in the form of grants, but mostly as loans and other non-grant instruments. She added that “the global south must not be forced to take on more debt to pay for a crisis it did not create”. 

One way in which developing countries can leverage action on climate change is through a debt-for-nature financing facility. This involves converting existing debt into a loan, with commitments to put this towards nature conservation efforts. Ecuador has just completed the largest ever ocean-friendly debt scheme principally to allow the nation to allocate resources for conservation projects in the Galapagos. 

The deal has been put together by the Ecuadorian government in partnership with the US International Development Finance Corporation, the Inter-American Development Bank and other agencies, with the help of the Pew Bertarelli Ocean Legacy Project. The Galapagos Marine Bond will exchange $1.63bn of Ecuador’s international bonds for a $656m loan, generating some $323m for marine conservation through to the early 2040s. At this point, returns from investment, as well as repayment, should support continued conservation efforts. 

Funding will go towards monitoring, control and patrolling – particularly to combat overfishing – to safeguard key marine ecosystems in the Galapagos. Building climate resilience in the area will also be a key priority.

New data from social media platform LinkedIn is showing that the number of executives with sustainability knowledge is still failing to meet demand. Based on global data from across the platform, LinkedIn’s Green Skills Report highlights that while skills in sustainability have grown by 40% since 2015, this is still not sufficient to meet the demands of new roles, as only 13% of the workforce possesses the skills needed for the necessary green transition. The report says that the share of jobs that require these skills has increased from 9.6% in 2015 to 13.3% in 2021, alongside the acceleration of corporate net-zero plans and policies, and driven further by government investment in green initiatives in several countries. 

LinkedIn has warned that the gap in sustainability skills could jeopardize these efforts to deliver on corporate climate goals. To mitigate this problem, LinkedIn says that governments must champion the green skills agenda and businesses can and must do more to equip their employees with the skills needed to deliver genuine environmental change.