Most discussions about climate change focus on energy, like moving from fossil fuels to solar, wind, and other renewables. While that shift is crucial, it only tackles about 55% of global greenhouse gas emissions. The other 45% comes from something we rarely discuss: how we make and use everything from steel and concrete to food and clothing.
This is where the circular economy comes in, not as a vague concept, but as a real and scalable way to close the emissions gap that renewable energy alone cannot solve. The way we make, use, and discard products creates nearly half of all greenhouse gas emissions. A circular economy provides a practical way to reduce those emissions and even remove carbon from the atmosphere.
What Is the Circular Economy?
Today’s economy mostly follows a straight line: we take raw materials, make products, use them for a short time, and then throw them away. This ‘take-make-waste’ approach uses a huge amount of resources. The UN Environment Programme’s International Resource Panel says that extracting and processing materials, fuels, and food causes about half of all global greenhouse gas emissions and over 90% of biodiversity loss and water stress.
The circular economy replaces the linear model with a system based on three main ideas described by the Ellen MacArthur Foundation:
- design out waste and pollution,
- keep products and materials in use at their highest value, and
- restore natural systems.
The circular economy is not just about improving recycling, which is actually the last-ditch option in a circular system. The biggest emissions cuts come from changes made earlier in the product’s design and production, like designing products to last longer, sharing and reusing items more, and rethinking what we need to make in the first place.
Where the Emissions Are Hiding
To understand why the circular economy matters for climate, you need to follow the carbon embedded in materials. A research team published findings in Nature Geoscience documenting that greenhouse gas emissions from material production alone rose by 120% between 1995 and 2015, reaching 11 billion tons of COâ‚‚-equivalent. As a share of global emissions, material production rose from 15% to 23% of annual climate-warming greenhouse gas emissions during that period. Two-fifths of that carbon footprint stems from construction, with another two-fifths tied to manufacturing vehicles, machinery, and equipment.
These are the emissions hidden in the things we use every day, which climate policy experts call ‘embodied carbon.’ Every ton of steel, bag of cement, and sheet of aluminum has a carbon cost from mining, smelting, and processing, no matter how the factory is powered. Even if you use clean electricity for a cement kiln, the chemical reaction that turns limestone into clinker, a key ingredient in concrete, still releases COâ‚‚. Circular strategies help by cutting the need for new raw materials from the start.
The Scale of the Opportunity
The Ellen MacArthur Foundation’s landmark report, Completing the Picture, illustrated what would happen if circular economy strategies were applied to just five key material sectors — cement, steel, aluminum, plastics, and food. The result would be a reduction of 9.3 billion tons of COâ‚‚-equivalent  annually by 2050, equivalent to eliminating the current emissions from all forms of global transportation. That would close roughly half the emissions gap in those sectors alone, and those five sectors represent only a portion of the full 45% of emissions tied to how we make and use things.
Applying circular strategies across all material and food systems would significantly reduce human-caused warming. It would be possible for the economy to return to operating within the planet’s annual capacity to absorb CO2.
Europe’s Joint Research Centre reported in October 2025 that improved materials management, including reduction, reuse, and recovery of materials that currently end up in landfills could cut 189 to 231 million tons of CO₂-equivalent emissions annually from heavy industry alone. The largest savings would come from steel (64–81 million tons), followed by plastics (75–84 million tons), cement and concrete (38–52 million tons), and aluminum (12–14 million tons). The European Environment Agency’s 2025 assessment found that doubling the EU’s circular material use rate could reduce greenhouse gas emissions related to material extraction and processing by roughly 61%.
In the United States, an analysis by Oliver Wyman and the Ellen MacArthur Foundation identified the potential for circular strategies to reduce emissions by 295 to 538 million tons of COâ‚‚-equivalent in the built environment sector alone, while generating between $575 billion and $1.1 trillion in economic value. The World Economic Forum and the United Nations Development Programme estimate that global economic growth from going circular would be worth $4.5 trillion by 2030.
Circularity’s Four Pathways to Lower Emissions
The circular economy reduces emissions through four interconnected strategies, each focusing on a different stage in the life cycle of materials and products.
Design Out Waste and Use Less Material
The best way to lower embodied emissions is to use less material from the start. This involves designing buildings that use materials more efficiently, making products with fewer parts, and reconsidering how much space and how many things we really need.
The World Resources Institute explains that the sectors with the greatest potential for circular emissions reduction are buildings and construction, transportation, and the food system. In the built environment, research by McKinsey and the World Economic Forum found that the sector accounts for almost 40% of global energy-related CO₂ emissions and produces about one-third of the world’s waste. According to the World Economic Forum, adopting circular practices in construction could reduce sector carbon emissions by up to 75% by 2050 compared to today’s approach to building new structures.
Keep Products and Materials in Use Longer
Every product that gets repaired instead of replaced, every building that gets renovated instead of demolished, represents avoided emissions. Extending the useful life of products and components through repair, refurbishment, remanufacturing, and resale keeps the embodied carbon in those materials productive rather than sending it to a landfill, while triggering demand for new extraction.
This idea also applies to sharing and service models. When companies move from selling products to offering services, like Philips providing lighting as a service instead of selling light bulbs, they have a clear financial reason to design products that last longer and are easy to maintain. This encourages material efficiency throughout the supply chain.
Improve Recycling
When products reach the end of their useful life, high-quality recycling can recover materials, reducing the energy and emissions required compared to making new materials. For example, making steel from scrap in an electric arc furnace uses about 75% less energy than making steel from iron ore. Recycling aluminum saves around 95% of the energy needed to produce new aluminum.
However, recycling rates today are still far too low. The European Environment Agency reports that in 2022, recycled material accounted for only 11.5% of all material used in the EU, only slightly higher than in 2010. In construction, just about 1% of materials from demolished buildings are currently reused. Increasing material recovery is one of the biggest untapped chances for the circular economy to cut emissions.
Regenerate Natural Systems
The circular economy’s third principle, regenerating nature, moves beyond simply reducing harm to actively reversing it. This is most powerfully expressed in the food system, which accounts for roughly one-third of global greenhouse gas emissions when production, processing, transportation, and waste are included.
A circular approach to food applies regenerative agricultural practices, such as no-till farming, cover cropping, composting, and agroforestry, that rebuild soil health and sequester atmospheric carbon. Healthy soils are massive carbon sinks. According to the Ellen MacArthur Foundation, a circular economy applied to the food system could cut food-related emissions by 49% by 2050, while reducing biodiversity impacts by 50% and still feeding a growing population.
Preventing food waste is a keystone effort that can cut emissions. The UN estimates that food waste causes about 8% of global emissions. If food waste were a country, it would be the third-largest emitter in the world. Circular strategies such as better demand forecasting, local sourcing, composting, and food redistribution can greatly reduce this waste and lower methane emissions from landfills.
From Slowing Warming to Reversing It
The circular economy’s focus on regenerative industries can result in more than slowing the buildup of greenhouse gases in the atmosphere; it also provides a path to start removing carbon from the atmosphere. Regenerative agriculture and land restoration actively sequester carbon in soils and biomass. Unlike mechanical carbon capture, soil carbon sequestration is a proven natural process that delivers co-benefits for water filtration, biodiversity, and food security.
By lowering the total amount of materials moving through the economy, circularity frees up energy system capacity. When industries need less energy, for example by recycling aluminum instead of making it from bauxite or by renovating buildings instead of building new ones, switching to renewable energy becomes easier and faster, and the unused capacity can be redirected to efforts to create greater efficiency, such as AI-powered scientific invention.
When combined with the move to clean energy, these circular strategies can lead not just to net-zero emissions, but even to net-negative emissions, meaning we could remove more carbon from the atmosphere than we add.
What You Can Do
The circular economy may seem like something only policymakers and companies can tackle, but individual choices also send signals that shape the whole system. Here are some practical steps you can take to connect your daily actions to the bigger emissions picture:
Make purchases last. Every product you don’t buy is virgin material that doesn’t need to be extracted from nature. When you do buy, choose products designed for durability, repairability, and recyclability. Use Earth911’s recycling search to find local options for materials you need to dispose of.
Try to repair items before replacing them. Fixing an appliance, mending clothes, or refurbishing a phone keeps the carbon in those products in use. Support local repair shops and right-to-repair laws that make fixing things easier and more affordable.
Buy secondhand when you can. The market for used goods is growing fast, and not just because the economy is troubled, with 85% of shoppers now regularly buying or selling secondhand items. Every secondhand purchase helps avoid the emissions from making something new.
Cut down on food waste by planning meals, using what you buy, and composting what you can’t eat. Even small reductions in food waste at home can have a real climate impact when millions of households do the same.
Support regenerative food by choosing products from farms that use regenerative practices. Your buying choices help encourage more farmers to switch from conventional to regenerative methods.
Speak up for circular policies. Laws like extended producer responsibility (EPR), right-to-repair, building deconstruction rules, and organic waste collection all help speed up the shift to a circular economy. Let your elected officials know these policies are important to you.
Inventing A New World
Climate change is just as much about materials as it is about energy. We can’t reach net-zero emissions, or start to reverse global warming, by switching to clean energy alone. We also need to change how we design, make, use, and recover the things we use every day.
The circular economy offers a framework for this transformation. It’s not a cure-all, but it is a vital partner to renewable energy, tackling the 45% of emissions that energy changes alone can’t fix. Unlike many climate solutions that need new technology, circular strategies mostly depend on changes in design, business models, and policies we already know how to use.
The real question isn’t if the circular economy can help solve climate change; the evidence shows it can. The challenge is whether the 8 billion people on the planet will adopt circular practices quickly enough to make a real difference.
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