Circular Economy

The world is entering a new decade with economic and environmental uncertainty. The approach towards recovery and investment that governments and the business community take will profoundly impact our lives. Moving towards a more circular economy can have dual benefits of reducing pressure on the environment while spurring economic growth.

The concepts of a Circular Economy took roots in a post-industrialized society where people realized that the linear economic process of producing-consuming-dumping was creating toxic waste in the rivers and polluting the air and land around them. This environmental awareness pushed governments to adopt laws around the use of toxic chemicals and promote the reuse, recycle, and disposal of waste materials. Taking this approach further, a Circular Economy is a holistic and systemic approach to product design, production, consumption, and treatment of post-consumption waste streams in an economy. The goal is to design products and services that maximize resource use efficiency while minimizing their impact on the environment.

In practical terms, the linear process of take-make, use, and throw is replaced with a circular process that optimizes the lifecycle impact of extracting finite resources through concepts of sustainable product design, efficiency, reuse, and recycle. This will mitigate negative externalities like environmental pollution and loss of biodiversity due to the overexploitation of finite natural resources.

In recent years, there has been a lot of focus on mitigating the risks posed by climate change on public health, the economy, and our environment. Around the world, this has spurred the efficient production and use of renewable energy. Renewable energy has the potential to reduces air pollution, greenhouse gas emissions and the power sector's need for critical water and land resources when compared to coal or other fossil fuels. Another area that has received increased public attention is plastic pollution. Increased public awareness on this issue has driven several countries like India, China, and the EU to adopt stricter regulations around single-use plastics. These are examples where Circular Economy concepts have begun to take root to solve real-world environmental problems.

Unfortunately, these examples are the exception instead of the norm. According to the World Resource Institute, governments and the international business community need to holistically promote an economy where "waste and pollution are designed out in the first place, products and materials stay in use for much longer, and natural systems can regenerate". The World Economic Forum estimates that this approach could generate 395 million jobs and constitute a $10.1 trillion business opportunity by 2030.

By investing in a circular economy, India and the world can achieve developmental goals and systemically entrench environmental stewardship within the economy.