Circular Economy

Manchite Chawdhary

B. Sc. Economics, St. Xavier's College, Kolkata

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“In the end, the term circularity may be just one way to make us aware that we need a more encompassing, integrated and restorative sustainability path that includes people as much

as technology and nature.” Michiel Schwarz

A circular economy is presented as a system of resource utilisation where reduction, reuse and recycling of elements prevail. It presents the prospect of a systematic shift from the linear economic model towards a closed-loop model which limits the disposal of usable materials and focuses on the utilisation of renewable resources to achieve economic development. A circular economy lays emphasis

on the need for sustainable development to ensure economic and environmental stability.

Under the linear model, we procure raw materials for production of goods which after usage will turn into waste. This “waste” has not yet been fully utilised and can easily be used in the production of

secondary products which will limit the need to extract raw materials and maximises the efficiency of each unit of input. The circular model is often termed as the ‘make/remake’ or ‘use/reuse’ model.

Another important principle of the circular economy is to extend the useful life of products and materials by creating loops of the materials used in the manufacturing process. The systemic shift shall also enable the natural systems to regenerate resources to enhance natural capital. This will result in increased deposits of minerals and non- renewable sources of energy, preserving it for the future generation and maintaining the ecological balance.

Easily one of the most striking examples of effective utilisation of material is shipment containers. After exhaustive use in shipping cargo, these steel structures are utilised for their resilience and strength. Some of the unusual uses of shipping containers include housing projects, sheds, emergency medical facilities, garages, shops, portable washrooms among others. While the attention for the circular economy is increasing, the extraction and prices of primary raw materials are still increasing.

According to Circle Economy calculations, 9% of all raw materials were fully recycled by 2019. In 2018, this percentage was slightly higher at 9.1%.In theory, in the circular economy, 100% of all raw

materials are fully recycled, and no new virgin raw materials are needed. It will take a very long time for this scenario to be achieved because methods will have to be found to fully recycle materials that are currently used in products. This brings forward an issue that limits the growth of a circular economy- Are the various economic entities, be it the governments or the firms, willing to invest their

resources to further the cause of a circular economy. In the current scenario, most underdeveloped and developing economies do not have adequate infrastructure to support high volumes of recycling and waste segregation. To break free of the linear model, large scale investments must be made at a global level and merely government guidelines and agendas would not suffice to bring our infrastructure to the required level. Another key aspect which might go unnoticed is the final consumer’s willingness to shift from using the new breed or range of products that shall be developed and produced, as, with the advent of circular models, some goods might be available in limited quantities while most goods would see a refined and remodelled version of them.

Demand stabilisation and Perpetual Innovation are also a few hindrances to the establishment of a circular economy. However, in most economies, the stability of demand is uncertain due to increasing population and expenditure. This places the economy in a situation where new resources must be extracted to meet the increase in demands between two points of time. As resources must be recycled in entirety, there must be a certainty that each product can be recycled or remodelled into new commodities. This puts a key emphasis that innovators must always have solutions about the use of discarded items. The United Nation Environmental Plan predicted a $2 trillion yearly benefit for the global economy arising out of a more effective resource utilisation model. Although there shall be a decrease in jobs in the resource extraction and raw material processing industries, these shall be offset by the increase in the demand for specialised workforce to develop, produce and maintain the circular channels for the flow of goods.

The Ellen MacArthur Foundation has prepared a detailed insight into the applications of circular economy in India. Some of the key highlights have been listed below:

● A circular economy development path in India could create the annual value of 14 lakh crore (US$ 218 billion) in 2030 and 40 lakh crore (US$ 624 billion) in 2050 compared with the current

development scenario.

● By adopting circular economy approaches, businesses could achieve material cost savings and increase their profits.

● A circular economy development path could significantly

mitigate negative environmental externalities.

● A circular economy could deliver benefits for the Indian population, such as cheaper products and services and reduced congestion and pollution.

● Leveraging digital technology to enable the circular economy could reinforce India’s position as a hub for technology and innovation.

● By actively leveraging and reinforcing circular economy opportunities now, India could move directly to a more effective system and avoid getting locked into linear models and infrastructure.

● High-growth markets like India can achieve competitive advantage over mature economies by moving to a circular economy.

Thus, it is evident that there numerous challenges that we shall face in exploring the development of the Circular Economy, however, we need to evaluate the costs concerning the benefits that shall arise from this systematic shift. This gradual change requires the onset of a new ideology where the global the economy moves forward together by emphasizing on viewing sustainability as the foundation for long term economic and human growth. The question I propose is: Are we ready to usher under this paradigm shift; As consumers who prefer recycled and reusable commodities; As producers who focus on effective resource utilisation and environment friendly methods of production; As investors who are willing to invest our resources to support those who promote this cause? And is it time for the world to witness the rise of Green Politics?