Embrace the circular economy

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Embrace the circular economy

Saturday, 08 August 2020 | Shilpi Kapur Bakshi/ Prahlad Tewari

Embrace the circular economy

As nations move towards a post-pandemic fiscal recovery, they must adopt strategies for long-term sustainable development and create resilient economies

The pandemic and the response to it by various governments around the world have posed unprecedented challenges, the effect of which would be felt for decades to come. People and economies are suffering not only due to the huge loss of lives but also from the slowdown of economic activities during the lockdown. According to the Union Minister of Road Transport Nitin Gadkari, the contagion is expected to cause a loss of over Rs 10 lakh crore to India’s economy. The World Bank, too, estimates that 12 million people in India could be pushed into poverty. While initially, the most visible impact of the crisis was on the healthcare sector due to shortages of personal protective equipment (PPE), ventilators, critical medical supplies and healthcare professionals trained in the handling of a contagion, its impact is now being felt on the free movement of people, goods and services, too.

A circular economy is based on the principles of reducing our waste and pollution throughout the lifecycle stages, keeping products and materials in use for long and regenerating natural systems. Circular economy-based concepts, such as cascaded reuse of resources to design reusable masks to substitute single-use masks, supported by Government-formulated guidelines and awareness about the same, are steps in the right direction.

The global market for refurbished medical devices is also predicted to witness significant growth. Recently, fuel cell manufacturer Bloom Energy started to refurbish ventilators to meet the supply gap in hospitals in the US. Due to COVID-19, organisations preferred work from home (WFH) and educational institutes preferred to learn from home using virtual platforms for meetings and online classes, which led to an unprecedented surge in demand for refurbished laptops. This cascaded use of refurbished laptops would also be critical in filling the void that has emerged in supporting online education to rural and urban poor students. Measures like these will create new market opportunities, increase the use of existing assets and reduce the pressure on the environment created by the demand for virgin raw materials.

Integrating circularity in various governments’ recovery agenda and strategies thus assumes importance. In April, the City of Amsterdam launched its Circular 2020-2025 strategy, which outlines the actions it would take to cut down the use of new raw materials to half by 2030. The local government also considers this strategy to be the basis for economic recovery from the effects of COVID-19. Similarly, the European Union (EU) and South Korea have both adopted “Green Deals” as central pillars to their economic recoveries, both leveraging regenerative models and circular economy principles. The deployment of idle railway coaches by Indian Railways as isolation wards during the surge of Coronavirus infections is adapting the approach to use existing infrastructure to an extent possible. This provides an opportunity for other governments to integrate resilience, low carbon and sustainable growth thinking into their recoveries by avoiding short-term emission-intensive projects.

Rethinking the mostly linear global supply chain systems by adopting a circular economy as a mode of production can help economies withstand supply disruptions like those experienced in the current pandemic. This was particularly visible in the case of stressed food production and distribution, which was experienced during the hastily-implemented lockdowns. By creating new and shorter supply chain connections between producers and consumers, we can ensure a continuous supply of essential goods in vital sectors and help improve resilience through stock availability and competitiveness while not giving up the commitment to achieving the UN-set Sustainable Development Goals (SDGs).

In order to support the Atmanirbhar Bharat Abhiyan, newer ecosystems need to be envisaged that are based on local, shorter and more distributed supply chains via localised material sourcing. At the start of the pandemic in India, the availability of PPEs was critically low, owning to non-availability of local manufacturers, long gestation period to import their machines and the high cost. In line with the spirit of ‘Vocal for Local’ and with various Government initiatives, India is today the second-largest manufacturer of PPE body overalls within a short span of four months. There is also a need to engage in collaborative consumption to share resources by replacing traditional ownership of products with lending, borrowing and the availability of repair services to facilitate reuse. This would help reduce panic buying. For instance, the assurance of the Delhi Government to provide “Pulse Oximeters” for monitoring oxygen levels of patients undergoing home isolation is a positive step in this direction. Acceptance of such “pay for services” rather than “owning facility options” would gain momentum if hygiene is ensured. Local waste sites can be turned into resource centres that undertake recovery and recycling of plastics.

Circular innovations can address manufacturing and supply chain shortages within the healthcare sector, too, where circular knitted fabric (washable and reusable) can be used to produce non-medical protective face masks. The need for investment in technology for designing responsible packaging solutions that maintain food safety and quality standards and prevent contamination can enhance the sustainability of the home delivery services that people are increasingly relying upon. Such solutions could also help continue efforts to reduce the usage of plastics and styrofoam. Several initiatives by various Fast Moving Consumer Goods (FMCG) companies and collaborations involving various stakeholders have been done across the globe to minimise single-use plastics.

 In addition, enhancing material productivity also plays a significant role in addressing the diminishing cost competitiveness of industries (such as the Indian automobile sector in comparison to China, Singapore, Indonesia, and Bangladesh) due to high material cost. The circular economy emphasises reuse, and through this has the potential to generate not only environmental benefits but cost benefits, too, and create new revenue opportunities. For example, the focus on manufacturing durable goods would help them to generate income from rentals, repairs and refurbishment while reducing the environmental footprint.

In the COVID-19 crisis, digital solutions have promoted virtual workspaces, a mobile Government and a multitude of platforms to monitor and trace infections. Digitalisation has not only been limited to medical solutions or WFH set-ups but has been an instrument in supporting online education modes, too.

Digital technology can play a role in creating city and village systems that are regenerative and restorative by offering de-materialisation opportunities, increasing our knowledge and understanding of data on the lifecycle of materials, people and external conditions, allowing for more informed decisions based on accurate data. This would help close the loop of material cycles and contribute to keeping products/materials in use for a longer period of time.

For example, digital technology can help aggregate local marketplaces dealing in secondary and alternative materials and formalise the informal sector waste-pickers. Real-time tracking technologies provide information on where a product ends up and how it will be reused or recycled.

However, despite the many opportunities that circular thinking presents, ongoing efforts in this direction have been hit due to the pandemic. For example, in the waste management sector where significant work was done to manage plastic waste, many efforts have been halted during the lockdown, particularly in the private recycling space.

Recycling plants are mostly shut or are operating at limited capacity with a lot of the informal sector workers, who played the role of aggregators (such as the junk collectors) leaving urban centres for their native places. Procurement of recyclable waste has also become a challenge. Among plastics, virgin plastic may become even cheaper than secondary raw material plastic due to falling prices of hydrocarbon fuels resulting from the current low demand. This will also affect the economic viability of many plastic recyclers. Efforts would be required to stimulate the demand for recycled materials and close the price gap between virgin and recycled plastics.

As countries step towards economic recovery after COVID-19, they should undertake circular economy strategies for long-term sustainable development and for creating resilient economies. The BRICS nations recently acknowledged the heightening of social vulnerabilities and job losses due to the pandemic and have emphasised on the need for improving the environment and promoting the circular economy in national plans as steps towards recovery. The time is ripe for us to rethink our consumption patterns, to build in resilience, circularity and an efficient rural-urban connection to reduce the vulnerability of our economic and social systems and move towards an Atmanirbhar Bharat.

(Bakshi is Senior Fellow and Tewari is Fellow and Area Convenor, TERI)

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