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R e se ar ch P aper
Ener gy ,
Envir onment and
R e sour c e s Pr o gr amme
S ept ember
2020
The cir cular
e c onom y in
La tin
America
and the
Caribb e an
Opp ort unitie s
f or building
r e silienc e
Pa trick
S chr ö der ,
Manuel
Albaladejo ,
Pía
Alonso
Ribas, Melis sa
MacE wen
and
Johanna
Tilk anen
Cha tham
House,
the
R o y al
Instit ut e
of
Int ernational Aff air s ,
is
a
w orld-le ading
p olic y
instit ut e
b ase d
in
L ondon.
Our
mission
is
t o
help
go v ernment s
and
so cietie s
build a
sust ainably
secur e,
pr o sp er ous
and
just
w orld.
C ont ent s
Summary
2
01
Intr o duc tion
4
02
L A C instit utions
and
p olicie s
17
03
Challenge s
and
opp or t unitie s
in L A C
27
04
Financing the
cir cular
e c onom y
tr ansition
in L A C
44
05
P ot ential
tr ade
opp or t unitie s
f or
the
cir cular
e c onom y
50
06
C onclusions
and
r e commenda tions
5 4
Anne x
5 8
About
the
author s
60
A ckno wle dgment s
61
Summary
—
The
circular
econom y
has
g ained
pr ominence
in
Latin
Amer ica
and
t he Car ibbean
(L A C) in
r ecent
year s
as
an
appr oac h
t o
sus t ainable
development. Countr ies
in
t he
r egion
ha v e either
implement ed or ar e planning
ne w circular econom y
policies,
public
initiativ es
and
r oadmaps.
—
The
C O VID-19
pandemic
has
r evealed
significant
shor t comings
in
t he
linear econom y
–
t he
vulner ability
of
g lobal
value
c hains,
t he
deple tion
of
natural r esour ces
and
t he
e xacerbation
of
social
ineq ualities.
The
circular
econom y off er s
an
alt er nativ e fr ame wor k
f or a
mor e r esilient
and
inclusiv e economic model in
L A C
countr ies.
—
A
successful
tr ansition
t o w ar ds
t he
circular
econom y
in
L A C
will
depend
on
t he widespr ead
adop tion
of
Indus tr y
4.0
t ec hnologies.
Indus tr y
4.0
is
a
k e y
enabler of
t he
circular
econom y ,
allowing
ne w business
models
t o
be
pr ofitable
while r educing
en vir onment al
impacts.
L A C
g o vernments
need
t o
suppor t
a
circular econom y
tr ansition
t hr ough
a
t ec hnology
lens,
t o
guar ant ee bo t h
added
value and
sus t ainability .
—
L A C
countr ies
mus t
in ves t
mor e in
r esear c h
and
development
in
or der
t o
t ak e full
advant ag e of
Indus tr y
4.0
t ec hnologies
and
appl y
t hem
t o
a
circular econom y
tr ansition.
In vestment
in
science
and
t ec hnology
is
s till
com par ativ el y lo w ,
eq uating
on
a ver ag e t o
jus t
0.66
per
cent
of
GDP
acr oss
t he
r egion, wit h ent er pr ises
(public and
pr ivat e)
financing
onl y
about
36
per
cent
of
t hat
shar e. —
Social
and
en vir onment al
jus tice
consider ations
ar e of
eq ual
im por t ance
in
t he
circular
econom y
model. A
‘jus t
tr ansition ’ appr oac h
is
im por t ant
t o
ensur e t hat
t he
circular
econom y
does no t
per pe tuat e e xis ting
ineq ualities
of
t he
linear economic model, or damag e liv elihoods
t hr ough
ne w t ec hnologies
and
t he aut omation
of
jobs.
A
social
inno vation-based
appr oac h
t o
t he
circular
econom y in
t he
L A C
r egion
can
r educe
po ver ty
while
pr omo ting
human
development
and sus t ainable
consump tion
patt er ns
f or a
mor e r esilient
and
inclusiv e socie ty .
—
Good g o ver nance
and
t he
es t ablishment
of
tr anspar ent,
r ules-based
ins titutions at
t he
national
lev el
ar e crucial
f or a
successful
and
inclusiv e circular
econom y tr ansition
in
t he
r egion. Pr o viding
a
s t able
in vestment
en vir onment
and functioning
mar k e ts
f or business,
as
w ell
as
addr essing
ineq uality ,
ar e all
crucial
f or success.
A t
t he
r egional
lev el,
str at egies
can
be
desig ned
t o
ensur e t hat
countr ies
coor dinat e t o
suppor t
national
and
subnational
r egions
in
t he
tr ansition.
The cir cular
e c onom y
in
La tin
America
and
the
Caribb e an
Opp ortunitie s
f or
building
r e silienc e
—
The
cur r ent
financing
situation
f or t he
circular
econom y
in
t he
L A C
r egion is
limit ed mainly
t o
t he
pr o vision
of
int er national
development
finance
f or w as t e management
and
r ecy cling,
whic h
ar e at
t he
lo w er
end
of
t he
valorization hier ar c hy
wit hin
t he
circular
econom y .
Ov er
t he
ne xt
decade
t her e could be subs t antial
c hang es
acr oss
t he
r egion
in
w as t e manag ement,
whic h
will
need
t o
be
financed.
It
is
im por t ant
t o
attr act
bo t h
domes tic
and
f or eig n
in ves tments be y ond t he
w as t e management
sect or t o
mak e t he
tr ansition
t o
a
circular econom y
possible.
—
The
t hr ee ma jor
indus tr ial
ar eas
t hat
ar e a
pr ior ity
f or t he
circular
econom y in
L A C
ar e t he
mining
and
e xtr actives
sect or ,
w as t e management
and r ecy cling,
and
t he
bioeconom y .
Cir cular
econom y
pr actices
in
t he
mining sect or ar e essential
f or r educing
en vir onment al
im pacts
and
social
r isk s.
The y
will
also
im pr o v e t he
sect or’ s
com pe titiv eness
as
demand
f or primar y me t als
and
miner als
falls
due
t o
urban
mining
and
advances
in
pr oduct
r euse, mat er ial
r eco very
and
r ecy cling
t ec hnologies.
In
t he
w as t e management
and
r ecy cling
sect or ,
circular
econom y
pr actices
could r educe
t he
amount of
w as t e t hat
is
either
landfilled
or bur ned.
Mean while,
t he
bioeconom y off er s
ma jor
oppor tunities
f or sus t ainable
f ood
sy s t ems
and
ag r icultur e in t he
r egion, whic h
can
help
a v oid
tr ade-off s
be tw een
economic, social
and en vir onment al
objectiv es.
01
Intr o duc tion
With
height ene d
ur genc y
ar ound int ernational c ommitment s
on
the
en vir onment
and
de v elopment , the
cir cular
e c onomic mo del
offer s
La tin
America and
the
Caribb e an
(L A C )
an
alt erna tiv e
w a y
of
upholding
the
r e gion ’ s
glob al
r e sp onsibilitie s .
The
emer ging
moment um
of
the cir cular
e c onom y
in
L A C
The
circular
econom y
model has
g ained
high-lev el
political
att ention
and
suppor t in
Latin
Amer ica
and
t he
Car ibbean
(L A C) in
r ecent
year s.
The
r egion
has
alr eady launc hed
mor e t han
80
public
initiativ es
r elating
t o
t he
circular
econom y . 1
These
policies
ar e im por t ant
enabler s
t hat
ar e necessary
t o
acceler at e and
scale up
circular
pr actices
in
t he
econom y ,
suc h
as
c hang es
in
pr oduct
desig n,
in
supply c hains
and
indus tr ial
pr oduction
pr ocesses,
and
in
how pr oducts
ar e being
used and
disposed
of
at
t he
end
of
t heir
lif e time. 2
In
2019,
t he
circular
econom y
concep t
g ained
significant
tr action
at
t he
r egional lev el
in
L A C.
In
N o v ember
of
t hat
year ,
t he
Int ersessional
Mee ting
of
t he
F or um of
Minis t er s
of
En vir onment
of
Latin
Amer ica
and
t he
Car ibbean
announced pr oposals
f or a
R egional
Coalition
on
Cir cular
Econom y
(Coalición
R egional
de Economía
Cir cular),
‘wit h
t he
main
objectiv es
[of
dev eloping] a
common r egional
vision
and
str at egy
on
circular
econom y
in
or der
t o
ha v e a
bigg er
impact, t o
build
cooper ation
and
e x c hang e bes t
pr actices ’ ,
t asking
t he
UN
En vir onment Pr og r amme
(UNEP)
wit h
building
t he
coalition
in
close
cooper ation
wit h
t he U nit ed N ations
Indus tr ial
Dev elopment
Or g anization
(UNIDO)
and
o t her
1
Cer na,
L.,
Ar av ena,
A ., Cas t ello,
N . and
Urr utia,
R.
(2019),
E CONOMÍA
Cir CULAR
y
P OLÍTICAS
P ÚBLICAS :
Es t ADO
del
AR t e y
DESAF íos
PARA
LA
CONS trucción de
un MAR co
político
de
pr omoción
de
ECONOMÍA
CIR CULAR
en
Amér ICA
L ATINA
[Cir CULAR
Economy AND
Public
P olicies:
Best pr ACTICE
AND
c HALLENG es f or
t he
constr uction
of
A
POLITICAL
fr AME w or k
t o
pr omo t e
t he
cir CULAR
economy
in L ATIN
Amer ICA ] , K onr ad- A denauer -Stif tung,
https://www .k as.de/es/w eb/ener gie-klima- lat einamer ik a/einzeltit el/-/cont ent/economia-cir cular-y-politicas-publicas
(accessed
16
Jun.
2020).
2
W or ld
Business
Council
f or
Sus t ainable
Dev elopment
(2019),
P olicy ENABLERS
t o
ACCELER AT e
t he
cir CULAR
economy : S CALING
up ACTIONS
ACR oss regions
AND
s t AK eholders , Geneva:
WBCSD,
https://cir cular econom y.eur opa.eu/platfor m/ sit es/default/files/wbcsd_policy_enabler s_t o_acceler at e_t he_cir cular_econom y .pdf
(accessed
16
Jun.
2020).
The cir cular
e c onom y
in
La tin
America
and
the
Caribb e an
Opp ortunitie s
f or
building
r e silienc e
int er national
and
r egional
partners. 3
In
t he
cont e xt
of
t he
pos t-C O VID-19
r eco very in
t he
r egion, t he
circular
econom y
is
g aining
additional
att ention
as
a
solution
t o
incr ease
r esilience
and
mitig at e futur e disr uptions. 4
This
r esear c h
paper
pr o vides
anal y sis
of
t he
cur r ent
s t at e of
circular
econom y policies
in
L A C
and
identifies
pr ior ity
issues
f or national
g o ver nments,
businesses, civil
socie ty
and
t he
r esear c h
community .
It
has
fiv e aims:
—
T o
map
circular
econom y -r elat ed policies
and
public
initiativ es
in
L A C;
—
T o
identify
oppor tunities
t o
build
r esilience
in
L A C
economies
and
socie ties t hr ough
t he
circular
econom y ,
pos t-C OVID-19;
—
T o
anal yse
c halleng es
and
solutions
associat ed wit h
t he
tr ansition
fr om a
linear t o
a
circular
econom y
in
t he
L A C
cont e xt ;
—
T o
highlight
t he
r elevance
of
Indus tr y
4.0
t ec hnologies
and
inno vation
f or t he circular
econom y ;
and
—
T o
giv e special
consider ation
t o
t he
need
f or a
‘jus t
tr ansition ’...