This year's G20 held in Italy addressed the topic of Circular Economy. The most structured outcome was Policy Guidelines, prepared by the OECD at the request of the Italian G20 Presidency and addressed to G20 leaders, as well as to the Ministries of Economy, Finance, and Environment.
With benefits in the environmental, economic, and social domains, there is an apparent reason for G20 countries to continue moving forward in the transition to a circular and more resource-efficient economy. Several G20 countries have begun to develop national strategies for sustainable materials management, resource productivity, or circular economy.
One of the key ideas is that environmental risks are complex and must be managed in an integrated manner, requiring the application of a policy mix that considers the entire product life cycle. Examples of policies that can be environmentally effective and economically competitive include Extended Producer Responsibility (EPR) and Green Public Procurement (GPP). Others include integrated life cycle analysis or partnerships with companies and stakeholders across the value chain to support industrial symbiosis and innovation to improve eco-design.
Another critical point is that resource efficiency and circular economy must be addressed as an economy-wide issue, recognizing the economic benefits in terms of competitiveness, new business opportunities, innovation, and greater resilience in the face of resource scarcity and price volatility.
In addition, opportunities should be sought to exploit synergies with other policy areas, including climate change.
These issues also relate to the COVID-19 pandemic. Many countries are committed to a "green recovery" through stimulus packages of unprecedented scale and a transition to a circular and more resource-efficient economy that can help achieve long-term environmental goals and generate employment. As such, the circular economy can support economic recovery, provided that resource efficiency objectives are sufficiently integrated into COVID-19 recovery measures.
Another important aspect is to strengthen policy development and evaluation through better data and analysis. Many G20 countries have established material flow accounts and are developing indicators for resource efficiency and the circular economy. However, significant gaps remain in existing measurement frameworks. Appropriate indicators should be developed to measure the environmental externalities associated with resource consumption, the contribution of resources to economic development, and the macroeconomic and employment benefits associated with increased resource efficiency.
A final relevant point to mention is about the role of cities. Cities have essential competencies and levers in infrastructure sectors that are key to the circular economy, such as waste management and recycling, urban transportation, the built environment, water supply, and sanitation. These services are often managed at the municipal level. Therefore, it is vital to align policy action at the subnational and city level with national policies to promote the circular economy and meet national targets. In shared responsibility with regional and national governments and stakeholders, cities can act as promoters, facilitators, and enablers of the circular economy.