Life on the planet, including our own, depends on nature.

To create more sustainable ways of life and keep global warming under control, we need to ensure healthy, resilient, and productive ecosystems.

The climate crisis, as well as the pollution and biodiversity loss crises, stem from human activities that exploit nature beyond its limits, without giving it a chance to recover, degrading ecosystems and pushing them to points of “no return.”

These activities are based on the conventional economic model, which is linear and follows the logic of extracting, producing, using, and discarding resources.

A more sustainable use of natural resources requires a different economic model.

One option among many is the circular economy, an economic model of production and consumption traditionally described as a combination of reduction, reuse, and recycling activities.

However, most current approaches to the circular economy, incorporated into various public policies, focus on extending the life cycle of products that have already been manufactured. They do not comprehensively incorporate the processes of extracting the materials needed to manufacture the products or their final disposal. This considerably reduces the protection of nature and territories during the economic cycle.

That is why it is important to understand what the circular economy is and what it should include, in theory and in practice, so that it can truly contribute to a more sustainable and fair world.

Circular economy: Definition and challenges

As an alternative to the linear economic system, the circular economy involves closing the economic cycle through various mechanisms. These include reducing the use of virgin natural resources, increasing the use of recycled materials, and minimizing waste through the repair and reuse of products, keeping them in circulation for as long as possible.

It also means creating additional value for products whose useful life has ended when their materials are used again and again.  

In the face of our continued and unsustainable use of resources, the concept of the circular economy is becoming increasingly prevalent in different areas.

Although it is a living and evolving concept, when it becomes public policy, most definitions of the circular economy consider its main objective to be economic prosperity, with environmental care as a secondary result.

In 2020, a legal definition of the circular economy in the European Union considered it to be “an
economic system whereby the value of products, materials and other resources in the economy is maintained for as long as possible, enhancing their efficient use in production and consumption, thereby reducing the environmental impact of their use, minimising waste and the release of hazardous substances at all stages of their life cycle” …

This and other definitions show that the positive effects of the circular economy on nature tend to be taken for granted, when certain theories or practices associated with the concept may actually hinder the protection of ecosystems and the people who depend on them.

This is happening with the type of circular economy promoted to make extractive processes linked to the energy transition, designed to address the climate crisis, environmentally friendly.

Circular economy and energy transition

Historically, extractive activities such as mining have degraded ecosystems and violated human rights in Latin America, creating so-called “sacrifice zones.”

Today, to address the climate crisis, several international organizations have positioned an energy transition that requires doubling the production of renewable energies and electromobility to decarbonize the global energy matrix.

This also implies intensifying the extraction of so-called "critical" minerals for the development of clean technologies. One of these is lithium, a mineral of which the region has large reserves.

Thus, far from putting an end to it, the energy transition promoted by the Global North is renewing the historical extractivist trend, generating great pressure on Latin American territories rich in minerals for the transition, affecting ecosystems and populations near extraction areas.

In this context, the circular economy is promoted as a tool to make mining an environmentally responsible process. However, international proposals in this regard do not guarantee the resilience of ecosystems or the well-being of communities.

This is evident in countries such as Argentina, Bolivia, and Chile due to the growing global demand for minerals such as lithium.

Currently, the circular economy applied to mining in Latin America focuses on the internal processes of mining companies, but not on the consequences that their interactions with ecosystems and communities generate in the extraction territories, without stopping the expansion of extractivism or the high socio-environmental impacts caused.

Obtaining lithium for electromobility, for example, involves a complex, transnational supply chain. This includes mineral extraction, refining, the production of electrodes for batteries, battery manufacturing, and finally, the manufacture of electric vehicles.

From a global northern perspective, the circular economy is mainly applied here to battery recycling and industrial improvements for mining. However, it does not include measures to protect the biophysical limits and resilience of the ecosystems where lithium is extracted, ensure environmental restoration, prevent damage to local economies, guarantee human rights, and repair those that have already been violated.

Proposals from Latin America for a just circular economy

To ensure that the energy transition does not become a new extractive process that generates the same conflicts and environmental impacts that it has systematically caused and that are precursors to the current climate crisis, it is essential that the circular economy comprehensively integrates the mineral extraction territories.

Circular economy schemes must avoid the creation, expansion, and/or deepening of “sacrifice zones.” They must also recognize the strategic value of ecosystems as natural capital for countries and communities, given the ecosystem functions they provide, including freshwater supply and carbon capture.

To move towards a just circular economy in the extraction territories, the following principles must be respected:

• Protection of the human rights of local populations, guaranteeing their permanence in the territory and the continuity of their economic activities, linked to their livelihoods and their relationship with ecosystems.
• Promotion of environmental balance in accordance with the biophysical limits of ecosystems, recognizing their intrinsic values, which favor the conservation of their functions.
• Internalization of environmental costs in mineral value chains, incorporating the value of ecosystem services used for extraction into prices.

Learn more in our policy brief Reimagining the circular economy from the extraction territories. Proposals from Latin America.