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Circular Economy: The Way Forward for Post-COVID Recovery

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Circular Economy
 
2021 is set to be a year of recovery and rebuilding what broke in the previous year. In this year, India will need to not only work towards reviving its economy but also do it in a manner that is sustainable and environment-friendly.
The new year is set to be an important year for environment conservation. The new US President who will take over White House in this year has committed to putting climate issues at the heart of the US domestic as well as foreign policies, unlike President Trump. In addition to this, China, under the leadership of President Xi Jinping is also promoting the development of ‘ecological civilisation’ after the COVID-19 outbreak. In order to maintain its stance in foreign relations, India will also have to buck up and ensure that its economic recovery plan has environment conservation at its heart.
According to experts, the best way forward in such a scenario is the promotion and adoption of Circular Economy in the country.

What is Circular Economy?

A circular economy is an alternative to a traditional linear economy in which the product life cycle includes three steps: make, use and dispose. In a circular economy, resources are kept in use for as long as possible and the maximum value is extracted from them, and ultimately waste is recovered and regenerated in the end. In a circular economy, the products are recovered, recycled, refurbished, improvised, repaired or even shared, in order to ensure the maximum efficiency of resources.

Why does India need to adopt a Circular Economy?

Currently, India recycles only 20 per cent of its consumption items. The country is the third highest emitter of greenhouse gases and accounts for 9.2% of total world emissions. Given that India aspires to become a global manufacturing hub, it is likely to witness higher levels of consumption of raw materials, than what’s required to meet its domestic needs. Therefore, India’s traditional take-make-waste linear economic approach will cause severe ecological damage to untoward economic and social ramifications. And with the world’s largest economies set on taking measures to preserve the environment, it will create undue pressure on India if it did not work towards climate conservation.

Benefits of Adopting a Circular Economy

Circular economy has not only environmental benefits but also has a lot of economic benefits. In the European Union, it is expected that circular economy will be able to create savings of €600 billion for EU businesses, creation of additional 580,000 jobs and reduction of carbon emissions by 450 million tonnes by 2030. In India, if the circular economy model is adopted more widely, it can generate over 1.4 crore jobs within the next 5 to 7 years.

Role of the Government in Enabling the Adoption of Circular Economy

Tax Rebates and Incentives

In order to adopt a circular economy, a lot of investment will be required by the producers to acquire and build the infrastructure. In order to encourage such an investment, the government will need to provide the producers with certain incentives in form of tax rebates or even invest in the development of such infrastructure.

Adoption of Circular Economy in products and services provided by the Government

If the government wants to encourage the private sector for the adoption of the circular economy, it will need to lead by an example and adopt such a model itself in the products and services it provides. Such an example was provided by the government of Japan when it decided to manufacture its Gold, Silver and Bronze medals for Olympics 2020 from the discarded e-waste.

Dedicated Industry Specific Policy Framework

Each economic sector has different operating methods, limitations, strengths and needs. In order to effectively enable the adoption of circular economy, the government will need to formulate industry-specific policies to avoid loopholes and propagate ease of doing business.

Corporates that adopted the Circular Economy Model in 2020

Nike’s foray into the Olympics equipped with Circular Economy

Nike launched a line of competition apparel for the Tokyo Olympics made of 100 per cent recycled polyester. It was a major milestone for the company and a strong statement in favour of circular economy. The brand also launched more circular products in 2020 including a recycled content version of the Converse Chuck Taylor All-Star and an “exploratory footwear collection” made from factory and post-consumer waste.

Ikea’s Buyback Program for used Furniture

Ikea has rolled out a large-scale furniture buy-back program in 40 countries including India. The customers will in return be eligible to receive discounts of up to 50 per cent, of an item’s original price in the store, in form of a voucher. The furniture will be recycled or refurbished and then resold to the customers. If it is not resold, then then the brand will donate it to local community projects.