A new report published at the World Government Summit reveals how Gulf Cooperation Council (GCC) countries can save almost US$138 billion by 2030 if they adopt a circular economic model, corresponding to nearly 1 percent of the region’s cumulative GDP between 2020 and 2030. The report, developed in collaboration with the World Government Summit and the Ideation Center, the leading think tank for Strategy& Middle East, part of the PwC network, is titled “Putting GCC cities in the loop: Sustainable growth in a circular economy”. Under the prevalent linear economic model, the region is depleting its resources at an accelerated rate, generating unprecedented waste and emissions that are causing enormous social, economic and environmental damage.
Marwan Bejjani, partner with Strategy& Middle East, said: “GCC countries need to move away from the current linear model described as ‘take, make, use, waste.’ For instance, the region’s households are responsible for the highest consumption of electricity in the world, while their gasoline consumption per capita compares to that of North America, the region with the most intensive usage of gasoline. This is not sustainable, so there is a pressing need to move to an alternative economic model before it is too late.”
The circular economy is a holistic solution that seeks to enhance the value and productivity of material resources, and minimize any value leakage in order to have a positive economic and environmental effect. The concept derives its inspiration from nature’s biological and technical cycles by creating a closed loop material cycle.
The Ideation Center at Strategy& has defined a circular economy framework, governed by three principles:
Dr. Yahya Anouti, principal with Strategy& Middle East, said: “To ensure a sustainable economic growth it is critical that the region adopts the concept of the circular economy, starting with our foundation: the city. By incorporating circular principles into the way we construct and utilize buildings, transport people and goods, and consume products and utilities, the region can save between 2020 and 2030 up to 138 USD billions and extraordinary 150 million ton in C02 emissions, virtually the total emissions of the Netherlands in 2015.”
“To drive these circular initiatives it is essential to have a comprehensive national framework that ensures that everyone is moving in the same direction. This would require a coordinated implementation, financial incentives to encourage the right behaviors and public awareness campaigns, targeting citizens and corporations”, added Anouti.
Circular economy benefits for GCC cities
The report also outlines the steps that GCC governments can take to begin the transition to a circular economy and reap the desired benefits. This includes integrating their efforts in a comprehensive national framework, establishing a strategic council to guide the implementation, educating their populations about the environmental impact of their consumption habits, and changing how they themselves procure and consume assets.
“GCC countries are moving toward a path of sustainability, and have set a number of targets relating to renewable energy generation and recycling. However, they still lack a holistic approach for increasing circularity in line with the three principles of the circular economy. These principles are to optimize the usage of resources, maximize the life of products, and minimize and create value out of waste,” concluded Alice Klat, Director of the Ideation Center, Strategy& think tank in the Middle East.