Circular Economy: A Game Changer for Reducing Emissions in the Building Sector

A report endorsed by the World Economic Forum, authored by McKinsey, reveals that implementing circular economy principles in the building sector could slash up to 75% of its anticipated emissions by 2050. This approach addresses the ’embodied emissions’ associated with construction processes and supply chains for materials and components.

Embodied emissions refer to the greenhouse gases emitted during the production and transportation of building materials, along with construction activities. Currently, the built environment is responsible for one-third of global material consumption, highlighting the sector’s significant environmental impact.

Key Strategies for Emission Reduction

The report emphasizes several circular economy strategies to mitigate these emissions:

• Minimizing material usage initially.
• Utilizing innovative materials with recycled content.
• Designing for durability, longevity, and future disassembly.
• Implementing closed-loop value chains to create economic benefits.

Potential Gains from Circular Economy

Adopting these circular practices could prevent four gigatons of emissions cumulatively by 2050 and potentially generate an annual net profit gain of up to $360 billion by mid-century. This positive outlook persists despite the challenges of urbanization and population growth, particularly in emerging markets.

The focus is on creating a circular economy for key materials such as cement, concrete, steel, aluminum, plastics, glass, and gypsum. Special attention is given to carbon capture, usage, and storage (CCUS), especially in the production of cement and concrete, due to their high emissions intensity.