A critical knowledge gap persists in understanding the impact of materials on energy transition and the essential role of Circular Economy (CE) policies in effective decarbonization. This is noteworthy because materials contribute nearly 23%(1) to global greenhouse gas emissions and are intricately linked to fundamental societal services such as shelter and mobility. Moreover, materials play a pivotal role in the energy transition, posing a challenge to emission reduction efforts due to the mineral-intensive nature of green energy technologies and the demand for new infrastructure due to electrification in many sectors.

The dilemma is how to decouple materials demand from these factors, while remaining committed to decarbonization and sustainable development goals —highlighting the indispensable role that Circular Economy can play in addressing this challenge. In pursuing the Paris Agreement’s goals, Integrated Assessment Models (IAMs) are crucial tools guiding us toward a low-carbon future. They assess climate policies and project narratives aligned with reduced CO 2 concentrations. However, many IAMs do not consider the significant impact of materials on decarbonization, nor do they explore how a circular economy can reduce these impacts. Therefore, a paradigm shift is necessary, where circular economy policies are not just exogenous assumptions, but integral components with specific targets aligned with climate goals.

To achieve effective and sustainable solutions, it is necessary to create a new and comprehensive policy framework that integrates CE mechanisms in a consistent manner and orchestrates a strategic policy mix. Consider, for instance, the goal of boosting recycling rates—a multifaceted challenge that requires tailored policy mechanisms addressing regional specificities. It involves not only designing products for easy disassembly but also reducing material combinations and, crucially, educating the public on the benefits of choosing easily recyclable products.

Circular economy policies have, until now, found themselves on the sidelines of IAMs, represented as mere external assumptions. These policies predominantly emphasize material efficiency and recycling targets, with only a limited focus on demand-side strategies aimed at reducing overall material consumption. Nevertheless, a nuanced approach, considering both costs and potential rebound effects, holds the key to the effectiveness of these policies in not only curbing CO 2 emissions but also fostering sustainable development objectives.

In the face of the global challenge of climate change, materials, and circular economy policies emerge as vital players, deserving a central role in IAMs. The integration of these elements into the models becomes our pathway toward a more effective and holistic low carbon future.



1 Hertwich, E.G. Increased carbon footprint of materials production driven by rise in investments. Nat. Geosci. 14, 151–155 (2021). https://doi.org/10.1038/s41561-021-00690-8