Navigating the Path to Net-Zero: The Essential Role of Coherent Public Circular Practices

Many countries have set ambitious climate and environmental goals, with a predominant focus on reducing CO2 emissions through alternative energy sources and electrification. A notable example is the United States, where the climate objective is aimed at achieving a 50% reduction in emissions by 2030 . Additionally, the country strives for a carbon-pollution-free electricity sector by 2035 and envisions transitioning to a net-zero economy by 2050 .

Recognizing that achieving climate and environmental goals hinges on establishing a global competitive circular economy , it is surprising that most governments have been slow in embracing circular principles within the public sector, which are essential for attaining these targets. The European Court of Auditors has highlighted the slow transition to a circular economy among EU member states. Between 2015 and 2021, the average circularity rate for all EU member states increased by a mere 0.4 percentage points.

Implementing a circular economy in the public sector is not so much about manufacturing; it encompasses various stages such as procurement, consumption, and after-use/next-use management of resources, products, and services. Unfortunately, most public circular initiatives have been siloed within a federal, state, or local government, incremental and limited in scope, primarily focused on reducing emissions, enhancing energy and resource efficiency, and managing waste more effectively, which still adheres to a linear thinking framework . Although these pilot projects have yielded valuable insights, public implementations must scale up now.

Instead of isolated silo initiatives, coherent circular models must be implemented across all public entities. Given its significance as a major employer, purchaser of goods and services, and regulator and policy-maker, the public sector must play a pivotal role in transitioning to a circular economic system. The impact of public procurement on the transition to a?circular economy?could be significant as it is worth around EUR 2 trillion in the European Union, around 19% of GDP.? This involves preserving the value of products, materials, and resources for as long as possible and minimizing waste. To achieve this, the public sector should lead the transition in making circular products and services more accessible and affordable.

This acceleration towards a coherent public circularity encompasses five key activities and represents the most effective approach for federal, state, or local governments to achieve their climate and environmental goals within the stipulated timeframe, while simultaneously boosting economic growth and enhancing businesses' competitiveness.

A sharing Public Sector: Many publicly owned and operated resources, such as cars, trucks, buildings, clothes, food, lawnmowers, medical equipment, computers, and office furniture, often remain underutilized instead of being shared. To optimize efficiency and reduce environmental impact, the public sector must embrace a coherent, transverse circular economy that promotes sharing, reuse, and redistribution. By implementing sharing practices with or without monetary transactions, significant cost savings primarily through resource optimization and reduced waste and therefore disposal cost , and enhanced efficiency can be achieved, and the overall climate impact can be reduced.

Transforming Procurement Practices: To facilitate resource sharing within the public sector, a shift in procurement practices is vital. Instead of each organization solely purchasing assets, the emphasis should be on renting/sharing assets from/with peer organizations. This change will maximize asset utilization and promote the sharing of resources within the public sector.

Establishing a Coherent Circular Service Market: Promoting a coherent circular service market within the public sector involves tendering circular services, such as repair, redistribution, refurbishment, remanufacturing, and recycling, for equipment used across all public administration entities. This approach fosters a vibrant market with low entry barriers, encouraging profitable businesses to offer circular services. By implementing a coherent circular service market, the public sector can efficiently address equipment repair and resource utilization, thereby reducing waste and promoting sustainability. This approach not only strengthens the circular economy within the public administration but also serves as a catalyst for the growth of local circular service businesses, creating a positive impact on the environment and the economy alike.

Leveraging Digital Platforms for Efficient Asset Sharing: Digital government platforms are instrumental in facilitating seamless peer-to-peer sharing and redistribution of assets, maximizing their utilization. These platforms create efficient avenues for collaborative sharing between various public entities, fostering a sense of unity and common purpose.

Moreover, these digital platforms extend beyond tangible assets and encompass intangible human-based resources like skills and capabilities necessary for repair, refurbishment, and redistribution. As part of the EU’s Right to Repair proposal an online matchmaking repair platform to connect consumers with repairers and sellers of refurbished goods in their area will be made available.

By harnessing the power of these platforms, public entities can accelerate the widespread adoption of coherent circular practices, enhancing sustainability and resource efficiency.

Lead by example: The implementation of coherent public circularity holds the potential to revolutionize resource utilization, fostering greater sustainability, and enabling the public sector to become a trailblazer in the circular economy movement. By embracing this approach, public entities can lead by example, demonstrating the benefits of resource sharing while making significant strides toward achieving climate goals.

While many governments are setting requirements on the private sector to adopt more circular practices—such as implementing the Right to Repair , Digital Product Passport , Extended Producer Responsibility , and tackling packaging waste —it's noteworthy that they often fall short in applying similar standards to their operations. Even though transitioning to a circular public sector is essential for reaching their net-zero goals, governments are not taking the necessary steps in this direction. This discrepancy highlights a missed opportunity for governments to lead by example and enforce circularity within the public sector. By failing to set requirements for themselves, governments risk undermining their credibility and effectiveness in promoting circularity. Governments must take their own medicine and implement circularity requirements within the public sector, aligning their actions with the expectations placed on the private sector.

Five benefits of moving from siloed to coherent public circularity.

The need for coherent public circularity is an immediate concern, not a far-off challenge. The policies and priorities for enabling circularity implemented by the public sector today will have environmental, economic, and social implications for years to come.

To make meaningful progress on their climate and environmental goals, governments must adopt governance models that align with the magnitude of the climate challenge. Implementing large and complex coherent public circularity programs requires effective coordination, expertise from various agencies and stakeholders, partnerships with the private sector, and a strong focus on digitization.

The speed with which governments can identify, prioritize, and address circularity gaps will significantly impact their ability to achieve their climate and environmental objectives. Successfully reaching these goals will not only make local businesses more competitive in the circular economy but also strengthen the overall resilience of the economy for the future by reducing dependence on finite resources, minimizing price volatility, and decreasing exposure to supply chain disruptions.

Transitioning to coherent public circularity goes beyond emission reduction and risk mitigation; it presents an opportunity for federal, state, and local governments to invest in the future, spur economic growth, create jobs, and enhance services for citizens.?The European Commission estimates that applying circular economy principles across the EU economy has the potential to increase EU GDP by an additional 0.5% by 2030, creating approximately 700,000 new jobs.?

The urgency for coherent public circularity is immediate, not a distant challenge. The policies and priorities implemented by the public sector today will reverberate in terms of environmental, economic, and social implications for years to come. By embracing circular principles for coherent public circularity now, governments can set the stage for a sustainable and thriving future for both the planet and its citizens.

When public sector circularity becomes an end-to-end, transverse, and non-siloed collaborative, the public sector will experience five key benefits:

Reducing Cost and Waste: By eliminating usage silos and facilitating the easy distribution, sharing, and utilization of equipment across all public authorities, the public sector can reduce the large inventories of underutilized assets. For instance, shared use of cars for mobility can lead to significant cost savings from reduced purchasing and decreased waste handling.

The healthcare industry for example generates millions of tons of waste annually, contributing significantly to its environmental footprint . By adopting circular economy principles, healthcare facilities can turn waste into opportunities for increased patient care.

Facilitating a Profitable Circular Private Market: Implementing circular practices like tendering repair, refurbishment, part harvesting, and recycling services across various public sector domains can foster the growth of circular services at a substantial scale. This approach creates promising opportunities for the private sector to develop profitable circular business models, leading to increased overall wealth in society. Rather than relying solely on strict legislation as a means of enforcement, public circularity incentivizes increased profit and competitiveness as a carrot for fostering private circular practices.

For instance, recent research from Eurobarometer reveals that consumers' tendency to opt for replacement instead of repair results in an estimated annual loss of almost 12 billion. By embracing circular alternatives, this financial loss can be redirected towards purchasing new and innovative services, enriching people's lives beyond mere product replacement.

The promotion of coherent public circularity not only benefits the environment by reducing waste but also unlocks economic potential, driving the development of sustainable businesses and enhancing the overall well-being and prosperity of society.

Accelerating Digital Enablement of Circularity: Embracing the circular economy necessitates new digital capabilities within all aspects of a business's digital technology platform, including digital services and customer touchpoints, internal IT systems optimization, circular business ecosystem collaboration, connected products, and business intelligence.

Offering circular products and services to the public sector requires businesses' investment in digitization, which can be further reused when offering circular services to the private sector. Digitization plays a crucial role in driving a competitive circular economy, and businesses must understand best practices to benefit from digitization and support circular business models effectively.

Accelerating the Achievement of Climate and Environmental Goals: As the public sector is considered a role model for society, setting an example of good practice, its commitment to circularity inspires and accelerates private sector engagement in the journey towards achieving climate and environmental goals.

Reducing Barriers to a Competitive Circular Economy: Given the public sector's size and influence, businesses must prepare for and contribute to coherent public circularity models and approaches. By actively participating in the transition towards circularity, businesses can reduce barriers, such as time, cost, and risk, in realizing circular economy business models and circular service offerings, benefiting both the public and private sectors.

By embracing circular principles and fostering a coherent circular ecosystem within the public sector, regions can unlock numerous benefits that will pave the way for a sustainable and competitive future for businesses and society at large.

One of the most powerful tool

Leveraging the public sector's power through strategic and circular-focused public procurement is one of the most powerful tools to drive the implementation of a circular economy across various sectors and achieve climate and environmental goals. By using its purchasing influence, the public sector can promote and encourage circular production, consumption, and usage practices throughout society.

Breaking down procurement and utilization silos within the public sector is essential to create a cohesive and supportive environment for circular initiatives. By setting an example and leading the way, the public sector can lay a strong foundation for innovative companies to thrive and become leaders in the circular economy, fostering economic growth and job creation.

Simultaneously, by adopting circular practices, the public sector can effectively reduce its own climate and environmental impact, achieve financial savings through resource efficiency, and minimize waste generation. This not only benefits the public sector itself but also sets a positive example for other sectors and encourages the adoption of circular approaches throughout the entire region.

This article is based on my previous article published on World Economic Forum Agenda: 5 activities that can lead to coherent public circularity