Report: Economic benefits of circular economy for the Global South ‘underestimated’

An estimated 20 million people around the world are informal waste pickers. Stock image.

Published today (9 May), the research reveals that 84% of research into the socio-economic benefits of adopting a circular economy has focused on countries in the Global North.

While the EU is the market which is set to make the steepest employment gains from the transition, due to its early movement and strong policy focus, the authors of the report argue that the potential benefits in markets including Latin America and the Caribbean are not being properly explored. These gaps in knowledge, they argue, could hamper policymakers and businesses in their efforts to create good jobs in circular products and services.

Dutch think-tank Circle Economy, best known for producing the annual Circularity Gap reports, co-authored the research along with the World Bank’s Solutions for Youth Employment Programme and the International Labour Organisation.

Circle Economy’s director for governments and institutions, Hatty Cooper, said: Having better data and evidence to understand how the circular economy can create better quality jobs in different industries around the world is crucial for a just transition.

“Also, the circular economy is still seen as an environmental agenda, and its social and economic benefits are yet to be fully embraced, despite the importance of this topic.”

According to the most recent Circularity Gap report, just 7.2% of the raw materials used by humanity each year are kept in circulation. The fact that the vast majority of these materials go to waste, the report outlines, is fuelling nature loss and the climate crisis – megatrends which disproportionately impact the poorest nations.

Quality jobs

Today’s report also implores readers not only to research and realise the potential for circular job creation in emerging and developing countries, but to use the growth of circular goods and services as a means to improve worker rights.

It sets out how the research which does exist on circular jobs in the Global South largely focuses on how many jobs can be created, rather than whether the jobs would be good quality, with fair wages and good working conditions.

Almost three-quarters of workers in the lowest-income countries are employed in the so-called informal or ‘gig’ economy. They may be let go from their jobs with little to no notice, and many firms have weak governance around issues such as fair pay, workplace health and safety and worker protection from harassment.

The report concludes that the shift to a circular economy can – and must – contribute to efforts to improve worker protections, alleviate poverty and end discrimination on bases such as gender. Better data collection and analysis, plus joint policy advocacy, will be needed to make this a reality.

Solutions for Youth Employment Programme manager Namita Datta said: “It is not as much the concept of circularity that needs an introduction in these economies, but instead, the focus would be on addressing the low quality, low paying jobs in the informal sector with hazardous working conditions and exposure to toxic materials that are associated with circular activities like waste management, recycling, repair and reuse.”

Join the conversation during edie’s Circular Economy Focus Week 

Circular Economy Week 2023 (22 – 26 May) is edie’s themed week of editorial content and events dedicated to supporting sustainability, energy and resource efficiency professionals in accelerating the transition to an economy free from waste and single-use plastics.

Readers interested in the above article are encouraged to register for our free-to-attend online Circular Economy Action Sessions, taking place on the afternoon of Thursday 25 May. Tune in to hear from experts at the Ellen MacArthur Foundation, BT, Sky, The Body Shop, and more.


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