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The social dimension of Circular Economy

As stated in the new Circular Economy Action Plan (CEAP) a more circular economy (CE) has positive effects in terms of reduced environmental impacts and resources use. Moreover, consumers will benefit from more durable and safe products, trustworthy and relevant information on products and protection against green washing and premature obsolescence.

CE can also have a positive net effect on job creation, if workers acquire the skills required by the green transition.

According to the Monitoring Framework for the Circular Economy, the total number of person employed in circular economy related activities in the EU were almost 4 million in 2018. The percentage of persons employed in these sectors over total employment have been growing in the last years and ranges from 1.1 to 2.8% in the various member states (Figure 1).

Figure 1. Left side: Person employed in the circular economy sectors in the EU (% of total employment)[1]; right side: Person employed in the circular economy sectors, (% of total employment, average 2015-2017)

Sectors affected by the transitions to circular economy

According to projections published in a study by Cambridge Economics, moving towards a more circular economy could bring to a net increase of 700k jobs by 2030. However, the sectoral composition will change, and sectors producing primary raw materials will decline in size, while the recycling and repairing sectors will experience additional growth.

Similarly, according to a study from ILO (International Labour Organization), the sectors experiencing the highest job demand growth under a circular economy scenario would be the reprocessing of metals (e.g. lead, copper, precious metals), reprocessing of steel and wood materials. Manufacturing of basic iron and steel, manufacturing of wood and glass, mining of copper, iron ores and coals are instead the

Figure 2. Sectors most affected by the transition to a circular economy in terms of jobs demand, in a) absolute terms (millions jobs); b) percentage. Source: JRC elaboration based on data from ILO 2018. ILO calculations are based on Exiobase v3. [Notes: Percentage difference in employment between the circular economy scenario and the IEA 6°C (business-as-usual) scenario by 2030. For details: ILO 2018, Appendix 2.1]

Skills requirements

The circular economy will require new skills, including sorting, identifying the value and recognizing the hazards of different types of waste.

A report of the European Centre for the Development of Vocational Training (CEDEFOP) and ILO reviews the current national regulations supporting employment and skills development in the transition to greener and more circular economies. The report analyses policies and initiatives in six countries and account for the different ways of defining and estimating green skills.

Waste classification and management is one of the identified skill gaps related to circular economy identified in national programs, for instance in Spain and UK.

Waste management and informal economy

Waste management and recycling sector employ a significant number of persons in certain developing countries and in the context of an informal economy. According to the ILO report “Greening with jobs” this activity employs 500k people in Brazil, more than 62k in South Africa and from 400 to 500k people in Bangladesh.

Informal waste workers include informal street sweepers, household waste-collectors, helpers to the municipal collection crew, and waste-pickers in the streets and on the landfills who collect, process, transport and trade waste alongside workers from the public and private sector (Wilson et al 2012; Medina 2000).

Several studies show that informal waste-picking is well integrated into the recycling value chain, as the recycling industry is reliant on a range of formal and informal components (Guibrunet 2019). Formal recycling industries’ main input (recyclable materials) comes in great amount from informal waste-picking (Chi et al., 2011Streicher-Porte et al., 2005Wilson et al., 2009).

As in the case of Artisanal and Small Scale Mining, given the informal nature of this phenomenon, it is particularly challenging to have accurate and updated global estimates on the number of people occupied by this activity.

Numerous studies report serious challenges in this sector in terms of occupational hazards and exposure to toxic substances, which affects both workers and local communities, especially in the case of e-waste management.

Given its important role (e.g. in reducing landfill volumes and providing livelihood for a relevant number of people), efforts for the formalization of this sector and the improvement of working conditions are undergoing in many countries. For instance organization of cooperatives and other types of social and solidarity economy organizations (ILO, 2014).

The program Sustainable Recycling Industries (SRI) aims at building capacity for the sustainable integration and participation of small and medium enterprises from developing and transition countries in the global recycling of secondary resources. Funded by the Swiss State Secretariat of Economic Affairs (SECO) and is implemented by the Institute for Materials Science & Technology (Empa), the World Resources Forum (WRF) and Ecoinvent, it has projects involving the informal sector in Colombia, Egypt, Ghana, India, Peru, and South Africa.

[1] The economic activities considered as part of the circular economy includes activities related to recycling and repair and reuse.