Just 9 per cent of the billions of tonnes of materials which enter the world economy are recycled, a figure that must drastically increase to avoid dangerous climate change, a report has warned.

As business leaders gather in Davos for the World Economic Forum, new research from campaign group Circle Economy says there is “vast scope” to reduce greenhouse gas emissions by re-using, re-manufacturing and re-cycling.

Climate change is closely linked to the amount of material we use. Almost two-thirds of greenhouse gas emissions are released during the extraction, processing and manufacturing of goods to serve society’s needs, the report says.

We now use 92.8 billion tonnes of minerals, fossil fuels, metals and biomass every year - three times as much as in 1970 - with a further doubling predicted by 2050.

Yet most governments’ climate change strategies look primarily at measures such as renewable energy and barely consider creating a circular economy.

The report calls on governments to take action to move from a linear “take-make-waste” economy to a circular one that maximises the use of existing assets, while reducing dependence on new raw materials and minimising waste.

The Netherlands has set an example by introducing a target of becoming 50 per cent circular by 2030 and 100 per cent by 2050.

Circle Economy argues that innovation to extend the lifespan of existing resources will not only curb emissions but also reduce social inequality and foster low-carbon growth.

One example of how this could work in practice is construction in China where the majority of houses and roads people will use in the next 50 years have yet to be built.

The researchers calculate that China’s built environment emits 3.7 billion tonnes of greenhouse gases every year and is set to more than double in size by 2050, from 239 to 562 billion tonnes of material.

Less than 2 per cent of China’s construction inputs are reused or recycled material, although this is improving. Increasing this proportion further can make a significant impact on emissions and help the world keep with the 1.5C maximum rise in temperature agreed under the Paris Climate Agreement.

“A 1.5 degree world can only be a circular world,” Circle Economy’s chief executive, Harald Friedl, said.

Applied systematically, circular business models would “tip the balance in the battle against global warming”, he said.

“[Governments] should re-engineer supply chains all the way back to the wells, fields, mines and quarries where our resources originate so that we consume fewer raw materials.