Relevance:

• GS 3 II Environment II Biodiversity II Conservation Efforts

Why in the news?

Computer maker HP made its first ever consumer PC using plastic waste in ocean, a move that builds on the company’s sustainability commitment. Newly launched Pavilion 13, Pavilion 14, and Pavilion 15 Laptops were manufactured using ocean-bound plastics.

Understanding circular economy:

What is a Circular Economy?

• A circular economy is an economic model designed to minimize resource input, as well as waste and emission production.
• Circular economy aims to reach the maximum efficiency in the use of finite resources, the gradual transition to renewable resources, and recovery of the materials and products at the end of their useful life.
• Moreover, it targets to rebuild all available types of capital, including financial, human, social, and natural. Essentially, a circular economy describes a regenerative economic system.

• A circular economy is an alternative to a linear economy, which is based on a take-make-dispose model.
• The proponents of this economic model believe that it is a viable option to achieve high levels of sustainability without diminishing the profitability of the business or reducing the number of available products and services.
• In other words, a circular economy does not intend to simply combat the defects of a linear economy but provides a systematic shift that changes the economic system completely.

Principles of Circular Economy:

• Minimization of waste and pollution: The concept suggests the minimization of waste and pollution by reducing damages from economic activities.
• Extension of the useful life of products and materials: A circular economy aims to extend the useful life of the products and materials by creating the loops of the materials and products circulating in the economy. The goal is achieved through the active reuse, repair, and remanufacturing of the products and materials utilized in the economy.
• Regeneration of natural systems: The regeneration of natural systems is one of the fundamental concepts of a (circular) economy. It enhances natural capital and creates the necessary conditions for the regeneration of natural systems.

Benefits of the circular model:

• Economic Benefits Of The Circular Economy:
  • It is important to decouple economic growth from resource consumption. The increase in revenues from new circular activities, together with a cheaper production by getting products and materials more functional and easily disassembled and reused, has the power to increase GDP and therefore economic growth
  • Circular economy leads to lower material needs, as it skips landfills and avoids recycling, focusing on making materials’ cycles last longer. On the environmental side, it also avoids bigger pollution that extracting new materials would represent.
  • The development of a circular economy model, together with a new regulation (including taxation) and organization of the labor markets, can bring greater local employment in entry-level and semi-skilled jobs.
• Benefits of the circular economy on businesses:
  • New Profit Opportunities: In this circular sphere, profit opportunities may come from playing in new markets, cutting costs off with waste and energy reductions and the assurance of continuity of supply.
  • Volatility Reduction and Safeguarded Supplies: Circular economy model would turn businesses more resilient, or in other words, make them more resistant and prepared to deal with unexpected changes.
  • The demand for new services: circular economy model has the potential to create demand for new services and new job opportunities such as:

1. Collection and reverse logistics companies that support end of life products being reintroduced into the system
2. Product marketers and sales platforms that facilitate longer lives or higher utilization of products
3. Parts and component remanufacturing and product refurbishment offering specialized knowledge

• Environmental benefits of the circular economy:
  • Healthy And Resilient Soils: The principles of the circular economy on the farming system ensure that important nutrients are returned to the soil through anaerobic processes or composting, which softens the exploitation of land and natural ecosystems
  • Circular economy model working has the potential to decrease 80% of the use of artificial fertilizer and therefore contributing to the natural balance of soils
  • Fewer Greenhouse Gas Emissions: The circular economy has the potential to reduce greenhouse gas emissions and the use of raw materials, optimize agricultural productivity and decrease the negative externalities brought by the linear model.
  • More Resources Saved: circular economy leads to lower material needs, as it skips landfills and avoids recycling, focusing on making materials’ cycles last longer

Issues with the circular economy system:

• Fewer negative externalities on environment: The circular economy’s principles, negative externalities such as land use, soil, and water and air pollution are better managed, as well as the emission of toxic substances and climate change.
• The fact that our current economic system is geared towards the demand of the linear economy and ain’t yet prepared to deal with circular economy entrepreneurs;
• New business models may be challenging to implement and develop because of laws and regulations that aren’t prepared for this kind of innovations;
• Plenty of businesses rely on old and/or strong alliances, making it harder to create new alliances and therefore to close loops;
• Many companies still have goals and appraisal systems that focus on short-term value creation, whereas the circular economy model is a long-term value creation model;
• The GDP index doesn’t consider social and environmental externalities, discouraging the creation of value in both these areas

The barriers to a circular economy model:

• The first barrier has to do with the challenge of measuring the financial benefits of CE and its profitability.
• ‘Operational’ challenges represent the difficulty of dealing and staying in control of processes within the value chain.
• One of the barrier is, ‘attitudinal’, has mostly demonstrated the lack of knowledge about sustainability issues and also a big risk aversion – it shows that disruptive changes aren’t the best way to develop circular strategies.
• The last barrier to a circular has a technological origin and it has to do with the need for changing and re-designing products and production/ take-back systems. These needs end up creating concerns about the ability to do this and still being competitive and having quality products.

India’s stand on circular economy:

• India is leading the developing nations in circular economy investments that are aimed at pursuing a sustainable and climate-resilient growth
• India’s thriving reuse and repair sectors provide a strong base for policymakers and businesses to replicate sustainable, circular production models across the economy.
• India’s efforts emphasise the broader potential of the circular economy to create more jobs and resilient industries, limit environmental impacts and “leapfrog” to more sustainable development patterns.
• India also recommends that international policy and financial institutions like the OECD, World Bank, UNDP and EU should prioritise sustainability when making financial investments and developing regional trade and processing hubs.
• India Australian circular economy hackathon 2020: I-ACE was introduced to accelerate the development of young and promising students and startups/MSMEs working towards the creation of a sustainable future
• Though the circular economy in India is at a nascent stage yet, the intention is loud and clear and Hitachi is a leading partner in India’s transformational journey for long-term prosperity and healthier society through following the principle of maximum output from minimum input. This is creating Social Innovation in the way we reuse and recycle our resources for a new path to prosperity.
• ‘Digital India’ Program provides a significant component of the recycling of electronic wastes. Swachh Bharat Mission is also about making wealth out of wastes.
• The manufacturing sector, especially SMEs, can play an important role in the transition to a circular economy. The industry should ‘DECIDE,’ that is,
  • Design processes for fast refurbishment and cycling.
  • Educating the general public about the value of the circular economy.
  • Collaborative models are being developed in order to ensure a smooth implementation of the Circular Economy.
  • Innovating Circular Products is a project that aims to create products that are circular in nature.
  • Transparency through digitization, virtualization, dematerialization, and resource conservation through feedback-driven intelligence.
  • For environmental sustainability, it must be energy-efficient.
• Moving towards a more circular economy could deliver benefits such as reducing pressure on the environment, improving the security of the supply of raw materials, increasing competitiveness, stimulating innovation, boosting economic growth (an additional 0.5% of gross domestic product), creating jobs, EU countries has shifted to circular economy seeing its benefits in all aspect from social to economy to environment.

Way forward:

• India should more focus on develop the mechanism to recycle more and more waste that can make environment pollution free and waste can be used for commercial purposes
• Covering of rural area with urban area in waste management
• Reusing and recycling should be made an habit of individual at local level such steps can only be taken with the help of self helps groups and NGO who works for environment protection

Mains oriented question:

What are hurdles in path of India adopting the circular economy? (150 words)