Leapfrogging into circular economy

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VIAM Ziauddin
SOURCEBusiness Recorder
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Pakistan, especially its cities and most noticeably its economic capital, Karachi, is drowning under piles and piles of garbage rendering the job of clearing the mounting rubbish clutter an ever more difficult and costlier exercise. But what is an even more demoralisingly grimmer matter of concern for the nation is, there appears to be no hope of the country ever overcoming the sapping shortages of the three most essential nation building elements – capital, energy and access to technology. circular

The resulting socio-economic doom and gloom seems to have entrapped the country in a perpetual state of poverty for even sustaining an acceptable level of which we are forced to remain eternally dependent on condition- attached costly foreign loans obtained from the four corners of the world.

Meanwhile, the global population is expected to reach close to 9 billion people by 2030 from currently 7 billion – inclusive of 3 billion new middle-class consumers. This places unprecedented pressure on global natural resources to meet future world-wide consumer demand. In such a state of affairs, countries like Pakistan are likely to simply keel over.

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But perhaps all is not lost. Perhaps we could still turn a debilitating disadvantage into valuable advantage, earning adequate revenues out of our mounting garbage by recycling it. Studies show that plastics waste, particularly that of PET (Polyethylene terephthalate) can be efficiently recycled back into the value-chain in a sustainable and profitable way. Developed nations like Japan, Scotland and others use recycled PET/R-PET in construction of roads, tunnels, bridge piers and underground storage silos. Other innovative uses include fibres in textile industry, clear sheets and strapping tapes used for packaging, cosmetics and toiletries containers, vehicle parts, bags, shoes, tees, mobile phone covers, gardening supplies including shovels and water cans, recycling bins, pencil cases and other items.

Also Read: Active circular debt of Pakistan;s power sector hits Rs860b

Antonia Gawel, Head of Circular Economy Initiative, World Economic Forum, in her article (4 key steps towards a circular economy — published on Feb. 14, 2019) says that from plastics, to electronics, to food and fashion, efforts continue to drive more circularity into material value chains, but must move from incremental steps to net positive progress.

A report launched in Davos – A New Circular Vision for Electronics, Time for a Global Reboot – in collaboration with the UN E-Waste Coalition noted the annual value of electronic waste at $62 billion, three times the worth of all the silver produced in a single year.

As a positive step in this direction, Davos saw the announcement of a collaboration between the Nigerian government, Global Environment Facility (GEF), UN Environment, Dell, HP, Microsoft and Philips, to launch a $15 million investment to create a formal e-waste recycling industry in Nigeria. The ambition is to roll out this collaborative effort to other global markets, while also working with business to rethink business models and product design to fully benefit from the untapped circular opportunities.

“Food system transformation is another area that has seen positive acceleration – the launch of the EAT Lancet report recently put a spotlight on the incredible benefits of a plant and people healthy food system, while the Ellen MacArthur Foundation launched a report at Davos focused on the potential of a circular economy for food, which could generate $2.7 trillion in benefits annually for society and the environment, while averting an estimated 5 million deaths every year by 2050.

“Fashion is also increasingly in focus. The Fashion for Good initiative, EMF’s circular textiles initiatives, are shaping more circular and sustainable solutions, but only recently have governments started to take a bolder stance in tackling what has become an incredibly wasteful and polluting sector.

“France, for example, passed a law to forbid the practice of burning unsold clothes. 2019 could see the stepping-up of actions across governments to continue to scale leadership in this space, in particular with France’s G7 presidency.

“While the momentum and positive progress is clear, we still have a long way to go. The Circular Gap Report reminds us that still only 9% of the resources put into the economy get reused. This remains unchanged from the previous year”.

And perhaps we could also try to go on a spree of conservation making the most of what little of natural resources is available within countries like Pakistan by innovatively adopting what is called circular economy in its true sense of the meaning.

A circular economy as defined by the World Economic Forum is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals and aims for the elimination of waste through the superior design of materials, products, systems and business models.

Nothing that is made in a circular economy becomes waste, moving away from our current linear ‘take-make-dispose’ economy. The circular economy’s potential for innovation, job creation and economic development is said to be huge: estimates indicate a trillion-dollar opportunity.

In a linear economy, one does not account for the side-effects generated by a product once sold to an end customer. The aim is to sell a maximum number of products at minimal cost. Continuous pressure to reduce costs is said to lead to the creation of many of these side-effects – called externalities by economists. The higher a company’s rate of production and the higher its efficiency, the more successful it will be at selling its goods in a fiercely competitive environment.

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This is said to have worked well in the 20th century when resources were easily available and raw material prices kept decreasing. Waste, as an economic externality, was not the producers’ responsibility. Managing waste cycles, dumping it out of sight or, at best, recycling it – but only when it was cost-effective – were under the control of our national institutions. However, perennially resource shortage countries like Pakistan had suffered even when there used to be available abundant natural resources world-wide.

Visionary manufacturers, who understand the upcoming challenges of increasing their economic resilience, know better: a product that is returned for repair will cost less to fix and sell again, than manufacturing it from scratch.

According to Alexander Lemille, Co-founder and general secretary, African Circular Economy Network (To build a circular economy, we need to put recycling in the bin – published on Nov. 15, 2019 in UNIDO’s Making It magazine) in a circular economy, resources do not end up as recyclables since products are made to last several lifecycles. Products’ lifespans are extended via maintain, repair, redistribute, refurbishment and/or remanufacture loops, thus they never end up in the low-value, high-need-for-energy loop: recycling.

“Reusing, redistributing and/or remanufacturing strategies are the preferred approaches in a circular economy, as they are based on parts durability. Caring for and preserving the value of product components increases corporate economic resilience, while diminishing external market risks. Whether you are acting in a highly advanced or a developing economy, these strategies make crystal-clear sense: they are less costly in the long-run because repairing a product made to last is always less expensive than producing it from scratch.

“Following this approach, we must move away from activities that devalue the material, such as recycling, and instead invest in those activities that preserve it: reuse and remanufacture. These two are especially important since they create many more secure jobs.

“The re-localization and the resizing of activities closer to customers become critical. Production sites should migrate from a highly centralized global hub to units designed to fulfil local needs. In emerging markets, where there is often an urgent need for jobs, leapfrogging straight into a national remanufacturing strategy is the way forward.”

(This news/article originally appeared in Business Recorder on November 20th, 2019)

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