Reduce, Reuse, Recycle – the 3Rs is not just a ‘circular’ motto for preserving the environment anymore , but also for a sustainable economy. 

Why do we need countries to build sustainable economies?

In the current environment, production and management of resources, goods and services that seek to promote short term consumption are leading our world into an unsustainable situation. The economic situation that we live in today, the economic system is the complete opposite of the life cycle of nature and it collides with sustainable development in the long term.  

The world’s population is growing at an exponential rate, and so is the demand for raw materials, however, the supply of crucial raw materials are fixed, and will stay limited. In addition to this, the extraction and the usage of raw materials has a major impact on the environment, for example, it increases CO2 emissions and energy consumption, thus a smarter use of raw materials can lower these emissions. 

In a circular economic system, the economic activities build and rebuild the overall system strength. This concept recognizes the significance of the economy needing to work effectively on all aspects – for small and big businesses, for individuals and organizations, locally and globally. 

It supersedes the end-of-life concept with restoration, shifts towards the use of renewable energy, and excludes the use of toxic chemicals, which impair reuse and return to the biosphere and ultimately aims to eliminate waste through the superior design of materials, systems, products, and business models. It involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products for as long as it’s possible, and thus, the life cycle of a product is significantly increased. 

When in practice, the circular economic system implies bringing waste down to a minimum, thus, when a product reaches the end of its life, its materials are used in the economy wherever possible. They are used, again and again, thereby creating further value in the economy. 

Let’s take a closer look at the circular models and some corporate leaders on the forefront of the switch to the circular economy. 

  • Circular Supplies: Royal DSM has developed a cellulosic bio-ethanol through which agricultural residue is converted into renewable fuel. The new product reduces emissions, creates jobs, and helps strengthen national energy security. 

Thus, this model is particularly used for companies dealing with scarce commodities, in which such commodities are replaced with fully renewable, recyclable, and biodegradable raw material. 

  • Product as a Service: Philips sells lighting as a service, in which the company aims to reach more and more customers by retaining possession of the lights and other equipment the upfront costs of installation do not fall on the customer. The company also ensures sound environmental management of its products by taking them back at the right time for recycling or upgrading. 

Thus, through this model, the customers use products through a pay-for-use arrangement or lease, instead of the conventional buy-to-own approach, and can be beneficial for companies with high operational costs and ability to manage the maintenance of that service.

  • Product Life Extension: Over the last 40 years, Caterpillar’s remanufacturing activity through their Reman Program, has focused on returning parts at end of life to a same-as-new condition that would reduce cost, waste, greenhouse gas emission, and the need for raw materials. 

This model helps companies extend the lifecycle of their assets and commodities to ensure they can remain economically useful. Thus, the parts that would otherwise be thrown out, are maintained, or improved through remanufacturing, repairing, upgrading, or even re-marketing. 

  • Resource Recovery: The Walt Disney World Resort send food waste (including grease, cooking oils, and table scraps) from certain restaurants in an anaerobic digestion facility. The waste is transformed into renewable biogas to generate electricity. 

 This model leverages technological revolutions and capabilities to retrieve and reuse           resource outputs that eliminate material leakage and amplify their economic value. 

Now, to achieve a truly sustainable circular economy, production and consumption practices would need to change together, it would involve designing and promoting goods that last and can be reused, repaired, and remanufactured. This is the time we need to do more with less material and consumer in a more responsible manner. 

For example, repairing and restyling our favourite clothes can also help create less waste, we can lease clothes, companies can produce things that people need on-demand only. 

Let’s take a look at the benefits of a circular economy, and how it creates a more sustainable economic system for a country.

Business models based on reuse, leasing, repair, and remanufacturing could create almost four times more jobs than waste treatment, disposal, and recycling. They help generate local economic activity and reinforce relations within communities. 

It is projected that a move towards such a system will promote economic growth, the United Nations Environmental Programme (UNEP) calculated that by 2050, the world economy would benefit from more effective resource use by $2 trillion a year. This economic model aims to make a shift from narrow GDP growth to ‘multi-dimensional progress’, i.e. the broader strengthening of environmental quality, human well-being and economic success for both current and future generations. 

There will be little demand for extraction and processing of raw materials, which will reduce the number of less specialised professions. This will increase the value of labour, which is good for both, employment and GNP.

Moving towards a circular economy, also delivers benefits like the improving the security of the supply of raw materials, increasing competitiveness, and stimulating innovation, thus, in the long run, such a system would help improve the quality of life. 

Then, finally, there will be a change and a better understanding of the demand side, how the companies deal with their customers and the role they play throughout their lives will change, and ultimately lead to less usage of inputs, and less waste generation and changing production practices. 

Though the circular economic system in India is still at a nascent stage, there are some players trying to bring about huge changes through the system. For example, Hitachi is providing critical state-of-the-art technology to harness solar power and waste to energy plants that in the future will help reduce the dependency on fossil fuel power generation, thus helping build a healthier and low carbon footprint circular economy. 

Today, world’s most developed countries are consciously making the transition from linear to circular economies, and India is poised at the threshold of selecting and embarking on a path that is invigorating and reformative by design. 

Thus, with the current economic models slowly deteriorating the current way of life, and causing harm to the planet, we need to adapt to a more sustainable way of running our economies, that’s where the circular economic system comes into the picture, solving many of our problems, and creating a brighter future for generations to come. 

 

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