For centuries humans have believed that development and environmental sustainability are mutually exclusive and cannot co-exist. This belief has led humans to prioritize development at the cost of the environment. However, the recent manifestation of the repercussions of such ignorance to nature in the form of soaring global temperatures, increasing sea levels, frequent floods, etc. have forced humans to realize that this model of economic growth cannot be sustained. They are now essentially faced with three choices. Firstly, they could continue with the current growth model and let the situation worsen. Secondly, they could compromise economic growth in favor of the environment. Thirdly, they could figure out a way to develop economically in a sustainable fashion. It is towards achieving the third objective that the concept of Circular Economy comes in.
In very simple terms, Circular Economy means recycling and reusing. It stands in direct contrast to a Linear Economy where we extract resources from nature, use them to manufacture commodities, and throw these commodities away when we no longer need them. In a Circular Economy, we recognize that no resource shall be wasted. A commodity that has been used once shall be put back into the flow of goods either by recycling it for a different use or reusing it again for the same purpose.
Various initiatives are being taken across the world to establish circular economies and tap their potential to achieve sustainable economic growth. One such initiative is the NEOM of Saudi Arabia. It is a part of the Vision 2030 of Saudi Arabia. It is an ambitious project that aims to eliminate the need of using cars in this new city by replacing streets with walkable distances, preserve 90% of nature within this city and employ Artificial Intelligence to raise the standard of living by making people’s life easier. However, this is a project that is yet to be completely implemented and is currently at its initial stages. So let’s talk about some initiatives towards the creation of a Circular Economy that have already been implemented by various nations.
China has a Circular Economy Promotion Law. It was enacted as early as 2009. Under this law, the Chinese Government devised various policies for promoting sustainable economic growth such as incentives for electric power generation from wastes (Article 55), prohibits usage or sale of clay bricks in certain areas (Article 54), makes it mandatory for mining enterprises to reach predetermined levels of various indicators such as water reutilizing levels, land-reclamation rates, etc., failing which these enterprises shall be subjected to penal actions (Article 53), etc. Another policy measure was the establishment of Eco-Industrial Parks such as Nanhai National Demonstration EIP, Suzhou Industrial Park, etc. Eco-Industrial Park (EIP) is a cluster of businesses (both manufacturing and service) striving to achieve enhanced economic and environmental performance via collaboration and cooperation. These businesses use shared infrastructures for the storage of common supplies and the waste of one business is used, if possible, as the raw material for another business. Thus, sustainable production is achieved at lower costs. Similar laws include the Closed Substance Cycle and Waste Management Act, 1991 of Germany and Resource Efficient Law, 1996 of Japan. All these three laws followed the top-down approach and involved governments using policies to attain specific objectives and goals. Germany banned landfill dumping in the year 2095 and made it compulsory for producers to take back the old electrical appliances free of cost from the year 2006. Japan propelled the creation of circular markets for enterprises and increasing educational awareness via schools about environmental issues.
|NATION||LAW||CAUSE OF INTRODUCTION|
|People’s Republic of China||Circular Economy Promotion Law||Rapid economic growth and simultaneous damage to the environment and increasing awareness about environmental degradation.|
|Germany||Closed Substance Cycle and Waste Management Act||Economic Diversification (due to the oil crisis and recession of 1974-78 in Germany) and consequent environmental damage.|
|Japan||Resource Efficient Law||Lack of landfill space and the global economic crisis|
Circular Economy has massive potential for it prioritizes both economic growth and environmental sustainability, thereby, making it attractive and feasible at the same time. The likelihood of this model of economic growth’s success will, however, depend on the degree of cooperation and collaboration between the government, the producers, and the consumers. Extreme caution will have to be exercised by the governments while formulating policies for promoting the Circular Economy. For example, while Germany’s ban on landfills promoted the recycling of products, it also resulted in a massive increase in waste incineration rates. Thus, governments would have to be very careful while predicting the impacts of their policies on the behaviour of businesses and people in general. The producers would have to ensure that they can use instruments such as EIPs efficiently. Lastly, public participation would indeed be imperative for achieving the end goals of the Circular Economy. While the government policies may achieve sustainable production, nevertheless, sustainable consumption would still be indispensable for the establishment of the Circular Economy. While the Government may make it compulsory for manufacturers to take back old products as Japan did, people would have to proactively return them. In
In the case of those enterprises that are forced to recycle products, the cost of collection and recovery of these items may be added to the cost of the end products.
Author – Sidharth Badlani