Establishing a circular economy could reduce carbon dioxide emissions across the construction sector by as much as 75% over the next 25 years, according to the latest research.
The white paper – which was published by the World Economic Forum in partnership with McKinsey – said that the built environment holds “immense potential for positive change”. It also revealed that implementing a circular business model across the sector could also unlock global economic gains of up to £36 billion by 2030 and £823 billion by 2050.
The report itself was created as a call to action for construction business leaders across both the public and private sectors, offering clear transition strategies which align with global development goals.
Currently, approximately 26% of all global greenhouse gas emissions originate from the built environment.
Looking closely at the data available, the report goes on to reveal that establishing circular ways of working within the sector could reduce carbon emissions by as much as 4 gigatonnes by 2050.
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McKinsey partner and co-author of the study, Sebastian Reiter, said engaging the construction sector is “crucial” for reducing greenhouse gas emissions in the long-term.
The report also considers the potential for reducing carbon dioxide as well as the possible net value gain (money saved) for six key building materials: cement and concrete, steel, aluminium, plastics, glass and gypsum.
It found that creating a circular business model for cement has the most potential value (an estimated £7.8 billion in 2030 and £96 billion in 2050), while steel is already “highly recyclable”.
Further circular opportunities across construction include designing aluminium, plastics and glass for reuse, increasing recycled material use and adopting alternative fuels. These actions could reduce related carbon emissions for those materials by as much as 89%, 62% and 41% respectively, by 2050.
McKinsey senior partner and co-author of the report Jukka Maksimainen said the analysis shows an “extraordinary potential” for circularity on a financial level as well as across carbon savings.
“We see hardly any solutions in the market that address this issue at scale yet,” he added.
“This makes it even more essential that we identify scalable solutions and make them visible.”
