Dr. Arvind Kumar*
Estimates suggest circular economy adoption in India will bring an annual benefit to a tune of Rs 40 lakh crore ($624 billion) in 2050 and reduce GHG emissions by 44 per cent. The recent focus on circular economy in the Union Budget puts India in the right direction; but the question arises is, are we equipped enough for this kind of transition?
Estimates suggest that the global population will reach close to 9 billion by 2030 – including 3 billion new middle-class consumers. This places unprecedented pressure on natural resources to meet future consumer demand. The circular economy is a redesign of this future, where industrial systems are restorative and regenerative by intention. This ensures the maximum value is extracted from items with minimal impact and minimal waste. One overarching insight is that an integrated systems view is necessary to understand the interplay of economic, environmental, and social forces. In practice, the CE is realized through various principles, and valuable examples but above all, the 12 R principles presented so far can be the basis for classifying types of CE which are rooted in the age-old virtues of ‘moderation’, ‘optimal utilization’ and ‘empathy’.
Circularity is not a new-age idea to the Indian ecosystem. The country has been known for its frugal innovation around ‘doing more with the less’. Today, India stands at an inflection point in its journey towards economic growth. To balance the adverse effects of rapid urbanization, industrialization, growing population, and climate change, it is imperative to imbibe circularity in our economic development. There is a need to disrupt the linear ‘take-make-waste’ model and adopt circular economic models which are restorative and regenerative by design, and pay equal attention to people, planet and profits. This would integrate the design-thinking approach for optimizing resource efficiency across product lifecycles, enabling businesses to overcome the risk of raw material shortages.
As a multiplier effect, it would also reduce negative externalities such as waste, pollution and health hazards, while opening up newer business opportunities. Estimates suggest circular economy adoption in India will bring an annual benefit to a tune of Rs 40 lakh crore ($624 billion) in 2050 and reduce GHG emissions by 44 per cent. The recent focus on circular economy in the Union Budget puts India in the right direction; but the question arises is, are we equipped enough for this kind of transition? So far, the government has been proactive in formulating policy frameworks for ten focus sectors for circular economy transition. The Natural Resource Efficiency Policy, Plastic Waste Management Rules, Construction and Demolition Waste Management Rules, Metals Recycling Policy and Extended Producer Responsibility are a few such examples. But how effective and reasonable are these interventions?
Today, one-third of India’s 1.2 billion people live in urban areas, generating approximately 62 million tonnes of municipal solid waste (MSW) annually. As per NITI Aayog, this number is expected to grow rapidly to 125 million tonnes per year by 2031. Optimizing material usage through better product design, product lifecycle extension, product as service, sharing platforms and using recycled material through green procurements can disrupt the not-so-sustainable consumption pattern and consumerism. For example is it significantly better to recycle used tyres into rubber floor tiles, ink, carpets or car parts, than to export them to India increasing one of the world’s worst pollution crises. But in both cases we see a loss of value, as the high strength steel, kevlar and fibre are gone forever. Instead, the 2030s born-circular’s business model will benefit from the tyre throughout its usage cycle. When a tyre reaches its recycling phase they extract all its original materials and use them to produce new tyres.
Building a circular economy requires complex efforts at the local, national, regional, and global levels. To transition from the current trajectory to a circular one needs regenerative approach with shift to renewable energy and materials; reclaim, retain, and regenerate the health of ecosystems; and return recovered biological resources to the biosphere. A shift in thinking to an integrated and whole-life approach to development is no longer simply desirable; it is a necessity. Realizing the opportunities for cross-system benefits that protect our resources for a sustainable future is the essence of the circular economy. For example stopping all further non-critical groundwater abstraction, harvesting rainwater for groundwater recharge, adopting agriculture that reduces demands for water without compromising commercial output and maximizing use for recycled water. The circular economy concept on the supply chain on agri-food is a crucial and novel issue. The role could vary, starting from decreasing food waste, improving the efficiency of the production system and even to fulfilling the sustainability purpose.
Multi-stakeholder collaboration and alliances are instrumental to enable such circular business models. For example, the key to addressing India’s solid waste management challenge lies in connecting all kinds of actors along the value chain, including producers/brand owners, municipalities, the informal sector, waste management companies, and recyclers. The government can offset such pre-competitive collaboration across industries and value chains with partners as mutually invested coordinators of circularity.
While this opens up additional avenues of green job creation, businesses have to be considerate about the already existing informal sector in demystifying the complexity of reverse logistics and the recycling landscape. Leveraging digital technology for reverse logistics could further reinforce innovation and value creation for circular business models. Technology and digital intelligence can transform the traceability of material flow across value chains and build confidence amongst industry players and users of recycled products. Initiatives such as Startup India, Make in India and Digital India have well-positioned the country to create such indigenous solutions. For instance the idea of LiFE was introduced by the Prime Minister Sh. Narendra Modiji during the UNFCCC COP 26 in Glasgow last year. The idea promotes an environmentally conscious lifestyle that focuses on ‘mindful and deliberate utilization’ instead of ‘mindless and destructive consumption’.
While increased manufacturing and changing consumption patterns will generate more employment and increase per capita income, the effects of such higher production on the environment must also be efficiently managed and mitigated. Therefore, it is essential to recognize and revolutionize the material flow in the manufacturing process and shift towards a circular economy, which provides multipronged economic and ecological benefits. Climate change continues to transform daily lives, while action remains murky. Do you think this obfuscation has a catastrophic impact on people and the planet? While at COP26, our understanding of what is needed and the public commitment to do so were advanced, but now more widespread adoption of circular economy as a key solution should be a debate at COP27. At the heart of it, the idea is to move away from the take-make-waste approach and turn towards a circular approach for leaping prosperity whilst being within the boundaries of our finite planet.
*President, India Water Foundation
