We need a clear strategy for a circular economy

Infographic: TBS

A circular economy is principally poles apart from a linear economy. 

In a linear economy, raw materials that we process into a product are mostly thrown away after use, which creates a burden on nature.

However, in a circular economy, the cycle is closed as all these raw materials come back in production in a different way, to produce the same product or a different product through innovation, putting lesser pressure on nature. 

Considering the severe climate change impact, there is a need to create realisation about the importance of a circular economy with a proper and clear strategy. 

According to a report published in 2019 by the Ellen MacArthur Foundation, only 9% of the world's economy is circular, meaning that the remaining 91% is still largely based on the traditional linear model of take-make-dispose. 

This report also noted that the circular economy could generate $4.5 trillion in economic benefits by 2030, creating new jobs and reducing environmental impacts.

Another report by the Circle Economy organisation estimates that the global circularity rate was around 8.6% in 2019, up from 7.2% in 2015. The report noted that there is still a long way to go in achieving a fully circular economy, but progress is being made in several areas, including circular design, recycling and sharing platforms.

It seems that the global circular economy (CE) has not expanded to satisfaction, while climate change issues are bellying up in a bigger way, and burdening nature, and has become a serious liability to humanity. 

Even though as per above statistics the share of CE is not high, gradually a large number of countries have taken strategies to enter into the circular economy.

In the Circular Economy Action Plan for cleaner and more competitive Europe or simply #EUGREENDEAL, global consumption of materials such as biomass fossil fuel, metals and minerals has been estimated to double in the next forty years, while waste generation will increase by 70% by 2050. 

They have planned an Industrial Strategy applying CE and see potential to increase EU GDP by an additional 0.5% by 2030, creating around 700,000 new jobs.

Countries are not only thinking of going for CE, but at the same time how they can transform their economy in such a way to utilise the principles of CE to create more jobs and increasing contributions to GDP.

In the Industrial Policy 2022, in its Chapter 17 on Establishment of Environment Friendly Industry and Wastage Management, on paragraph 17.9, it is mentioned industrial entrepreneurs will be encouraged to adopt 5R: Refuse, Reduce, Reuse, Repurpose and Recycle strategy. 

Time has come for Bangladesh to outline a clear national strategy, setting targets, for scaling up CE with an aim to create new jobs and at the same time become a climate neutral country.

Bangladesh has passed through a number of stages of industrialisation. In the 8th five year plan, among the core objectives, one of the important aspects is the expansion of a manufacturing-based export-led economy. 

However, nature cannot be punished for industrialisation. For traditional industry, we take a lot of raw materials from nature which depletes our resources, and when we use this raw material in industries, there is wastage, and a part of the wastage again returns to nature as a burden. 

In a circular economy, we take less from nature. So wastage is less and the burden on nature is also less. 

We know the importance of a circular economy, however, how we can best utilise the benefits is a big question. The nature and type of industries are different and thus wastage comes in different categories, needs separate treatment, while the technology involved are also different. 

So, in case of practicing circular economy, what are the products and bi-products, their end of life, where they could go and how best can they be recycled throughout their product life, needs extensive research. 

In that respect, industry-academia collaboration is critical. Nowadays universities have been taking interest in the issue; they need to be encouraged with support.

While we discuss circular economy, we can see that circular economy is not new in our life, for example; used books are being used for packaging, rice and rice straws for cattle. 

There are a number of other examples of circularity. In the past, cattle manure was used for fire in the villages, sometimes burned old clothes were used as a remedy for wounds etc. These are circularities embedded in our conception of a circular economy. There remains ample opportunities for wider and systematic use and adaptable technology.

However, businesses treat it as a paradigm shift; some believe it expensive, technology-intensive and requires new and huge investment. However, experts believe that the environmental impact of 80% of products are determined at the design phase, so in order to ensure sustainability of products, designing is a big issue. 

In that respect, the EU is going to propose a sustainable product policy legislative initiative with a core objective of eco-design directives for the broadest possible range of products, to deliver with circularity. Bangladesh needs to think about a collaborative approach, as eco-designing policies with clear directives is not a nation-specific issue and will have an impact on everyone.

In a recent business summit organised by FBCCI, there was a specific session on circular economy. A presentation referred to the paper industry, which is a big industry, where wastewater is a big problem, but pulp recovery is possible. Entrepreneurs need to be serious and need to know about technology so that recovery of valuable materials is possible.

Besides, a circular economy can create new job opportunities. We have to consider the natural footprint and environmental footprint of our products. We need to involve academia to innovate new products. 

From a circular economy we can attract bio-economy. Nature is showing us alternatives of products, from less hazardous to more hazardous ones. By using principles of circularity we can innovate by-products and new products through modernisation and alteration.

Nevertheless, challenges are there in terms of where additional funding, linkage, education for stakeholders, and acceptance of the circular economy will come. Here is the need for institutionalisation of industry-academia collaboration. 

In our country, industrialisation depends mostly on imported technology and we have less trust in our indigenous technology. There are fund limitations in the universities and whatever funds are available can not be used in some cases. 

Additionally, there are pledges of international funding, such as the green climate fund. In the LDC5 conference, there were a number of declarations on different funding arrangements, however, the conditionalities were so stringent that it is almost impossible for SMEs to meet it. So, the only alternative for them is to avail financial support from different schemes announced by the central bank.

There is a need for stock-taking of products, getting the right information at different phases, future projection of what materials we will use and how much natural product can be produced by the manufacturers, and designing our manufacturing process accordingly. Cluster based support for ETP, wastewater treatment plants and close work with existing industry to create new initiatives is now a priority. 

One of the key areas where Bangladesh has made progress is in textile and garment manufacturing, which is one of the largest industries in the country. In recent years, there has been a growing interest in sustainable and circular textile production, with several initiatives and programs promoting sustainable production practices and the use of recycled materials. 

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has launched a sustainability initiative that aims to reduce waste and promote circular practices in the industry.

Another area where Bangladesh is promoting CE is in waste management. The country has a significant waste management problem, with inadequate infrastructure and limited resources to manage the waste generated by its growing population. 

However, there are several initiatives and programs in place to address this issue, such as the Solid Waste Management Program, which aims to promote waste reduction, segregation and recycling. There are several small-scale circular initiatives, such as recycling and up-cycling workshops and social enterprises that use waste materials to create new products.

Despite these initiatives, there are challenges, such as limited resources, inadequate infrastructure, lack of awareness and understanding of the circular economy concept. 

To fully realise its potential, there is a need for policy support, targeted investment in circular infrastructure and technologies. A clear strategy addressing these issues can attract entrepreneurs to opt for a circular economy.

Sketch: TBS

Ferdaus Ara Begum is the chief executive officer of BUILD, a public-private dialogue platform that works in the area of private-sector development.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.