Effects of the Circular Economy on Jobs

The report examines how shifting from a linear 'take, make, waste' model to a circular economy affects job creation and quality. It highlights that while circular production is generally more labour-intensive and can lead to net job gains—particularly in reprocessing and renewable energy—the transition requires 'just transition' policies to ensure jobs are 'decent' and inclusive. The document identifies specific sectors poised for growth, such as secondary steel reprocessing, and those facing decline, such as crude petroleum extraction, while noting a significant 'circularity gap' in the current global economy.

• The circular economy is characterized by a shift away from the linear 'take, make, waste' model, focusing instead on material efficiency, resource efficiency, and the decoupling of economic growth from finite resource consumption and greenhouse gas emissions.
• Production within a circular economy is typically more labour-intensive than in a linear economy. The ILO estimates that changes in energy production, including renewables and building efficiency, could result in a net gain of 18 million jobs globally.
• Specific industrial sectors are expected to see significant employment shifts by 2030. The highest absolute job demand growth is projected for the reprocessing of secondary steel into new steel (30.8 million jobs), while the strongest absolute decline is expected in the manufacture of basic iron and steel and ferro-alloys (-28.2 million jobs).
• The transition to a circular economy does not automatically guarantee high-quality employment. Many current roles in waste management and recycling in Europe are low-wage and present safety risks, and there is a trend toward hiring contract workers without unionization in the construction sector.
• Empirical evidence from the U.S. state of Florida indicates that a 1 per cent increase in the recycling rate leads to a 0.4 per cent increase in direct circular economy jobs, primarily in the processing stage. Additionally, a 1% increase in environmental NGOs correlates with a 0.146 per cent increase in circular economy jobs.
• Effective transition requires 'just transition' policies and social protection. For example, when China banned unsustainable logging, nearly 1 million state forest workers lost jobs, but cash transfers and social protection helped two-thirds of them find new employment or retire within four years.
• The global economy is currently only 9.1 per cent circular, indicating a substantial 'circularity gap'.

APA

International Institute for Sustainable Development (2020). Effects of the Circular Economy on Jobs. https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf

Chicago

International Institute for Sustainable Development. Effects of the Circular Economy on Jobs. 2020. https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Effects of the Circular Economy on Jobs |date=November 2020 |url=https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2020effects, author = {{International Institute for Sustainable Development}}, title = {{Effects of the Circular Economy on Jobs}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = nov, url = {https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }