The Benefits of Circular Economy for Sustainable Development in India
The CleanTech Sector is a rapidly growing industry that is revolutionising the way we view energy production and consumption. It encompasses a wide range of technologies, products, and services. The concept of a circular economy is gaining popularity as a solution to the unsustainable linear model of take-make-waste that has dominated the global economy for the past century.
In this model, resources are extracted, used to produce goods and then discarded as waste, leading to depletion of natural resources and harm to the environment.
The circular economy, on the other hand, is based on the principles of preserving and enhancing natural capital, decoupling economic growth from the use of finite resources and promoting regenerative processes.
This model has significant potential to contribute to sustainable development, especially in countries like India where the pressure on natural resources and the environment is high due to a rapidly growing population and economy.
In this blog, we will explore the benefits of a circular economy for sustainable development in India and how it can help the country transition to a more sustainable and resilient future.
An Introduction: India, the largest democracy in the world, is currently facing a number of social and environmental issues including population growth, political instability, food and water scarcity, rapid urbanisation, environmental pollution and climate change. Despite these challenges, the country is striving to achieve the UN Sustainable Development Goals (SDGs) Agenda 2030 commitment of increasing waste processing from 18% to 70% by 2021. The need of the hour is to devise strategies to promote economic growth while tackling climate change and devising future plans to manage waste and preserve resources. This is where the concept of a circular economy comes in; it encourages businesses to move away from the linear 'take-make-waste' model and embrace multi-life cycle value chains that make use of design-thinking for more efficient resource utilisation.
At present, nearly 377 million inhabitants live in cities, producing 55 million tonnes of municipal solid waste (MSW) each year. Furthermore, this number is anticipated to surge substantially, reaching 125 million tonnes yearly by 2031. Even though the circular economy is extremely significant, the sector presently has an assorted understanding of the concept, which is a major hurdle for its extensive implementation in India. It is estimated that by 2050, India will gain an annual benefit of US$ 624 billion (Rs 40 lakh crore) by lessening the negative externalities.
Circular Economy in India
In India, the Circular Economy is a system that intends to take out all undesirable items from the market. These "undesirable items" refer to any kind of inefficient usage of assets and resources. It is a regenerative method of producing and consuming that requires modifying, reclaiming and reusing products and components to lessen the environmental impacts.
This Circular model looks to get rid of the following four types of waste:
1. Unused Resources - Materials and energy that can't be recycled over an extended period of time.
2. Wasted Capacities - Products and assets that are not being utilised to their full potential.
3. Squandered Lifecycles - Products that end prematurely due to premeditated obsolescence or the lack of a second-life opportunity.
4. Wasted Embedded Values - Components, materials, and energy that are not recovered from the waste streams.
The move from the current system to a circular economy is projected to add an additional US$ 4.5 trillion to the global economy by the year 2030.
In comparison with the present situation, the execution of a circular economy in India may yield an annual value of about US$ 218 billion (Rs 14 lakh crores) by 2030 and US$ 624 billion (Rs 40 lakh crores) by 2050.
This would entail forming an ecosystem that encourages the detection and utilisation of new business models. At the moment, 377 million citizens living in cities produce around 55 million tonnes of Municipal Solid Waste (MSW) (such as organic waste, paper, plastic, wood, glass, etc.) yearly.
This amount is expected to surge to 125 million tonnes by 2031. Also, only 75-80% of MSW is collected, out of which 22-28% is processed, and the rest is disposed of in waste disposal sites.
The generation of MSW is estimated to reach 165 million tonnes by 2031 and 436 million tonnes by 2050.
By the year 2030, India is projected to be the third largest economy in the world, making up approximately 8.5% of global GDP.
The circular economy may be an ideal way to drive India's growth while also providing considerable environmental benefits, in order to create a sustainable and resilient system.
According to the National Chemical Laboratory (NCL) and PET Packaging Association for Clean Environment (PACE), the recycled Polyethylene Terephthalate (PET) plastic industry in India is estimated to be worth around US$ 400-550 million. In India, PET is recycled at a rate of 90%, which is superior to Japan (72%), Europe (48%), and the United States (31%). Therefore, there are great potential prospects for a circular economy in India.
It is expected that India will become a major centre for technology and advances. It has a strong IT infrastructure and pool of talented people who are able to develop innovative and state-of-the-art circular businesses. This has the potential to help India move to the front line of the global circular economy transformation.
In addition, India is one of the quickest growing economies and it is able to embrace chances to use circular production processes and create durable designs. Established economies have a linear lock-in and transitioning would be costly and time-consuming. As a result, as an emerging nation, India has a competitive benefit over established economies.
Indians are already accustomed to a number of circular behaviours, like keeping vehicles for longer periods of time and reusing or recycling materials. Vehicle ownership in India is typically 9-12 years, compared to 7-8 years in the US. This cultural inclination makes India an attractive market for circular products.
The cost of services for those following the circular path will be cheaper than for those using the traditional take-make-waste model. Experts predict that incorporating circular practices in India would produce an estimated US$ 624 billion in savings in construction, food and agriculture, and mobility by 2050. This cost-effectiveness will be especially appealing to India's cost-conscious consumers.
Business Models: Circular Economy business models are classified into five different types of models, which companies can leverage individually or in combination as they seek to reduce resource consumption and improvise new ways to improve overall productivity.
Below are the five consumer-focused business models are as follows:
Circular Supply Chain
Materials that are fully renewable, recyclable, or biodegradable and can be used across lifecycles. For example, switching from a fossil-fuel-based energy source to a renewable energy source. Companies can develop and market circular supplies such as renewable energy and recyclable materials through their upstream or downstream partners, or they can produce circular supplies for their operations. Some businesses are deploying technical nutrients, which are inputs such as metals and minerals that can be reused and recycled indefinitely if not contaminated or leaked along the value chain.
Recovery and Recycling
This model enables organisations to extract value from the waste stream (end-of-life products, waste products/by-products), effectively eliminating the concept of waste. Recycling, refurbishment, and restoration initiatives can help businesses recover value from end-of-life products. Businesses can also disassemble waste products to recover residual value in the form of valuable material. To aggregate waste streams at scale, the model frequently involves organisations to establish reverse supply chains. They can be transformed by recycling, upcycling (converting old products or materials into something more valuable), industrial symbiosis (sharing by-product resources among industries), downcycling (converting products to something of lesser value), and cradle-cradle design is then used to transform the same (disposed products are reprocessed without any resource loss).
Product Life Extension
Consumers discard products that they no longer value as they are broken, out of style, or no longer required. However, many of these products retain significant value by just being maintained, or improved through repairs, remanufacturing, or remarketing. Companies can act as industrial manufacturers which produce these goods with extended life cycles.
It aims to link two or more parties to increase net asset utilisation through co-access. The model typically makes use of digital technologies to create new relationships and business opportunities for consumers, businesses, and micro entrepreneurs who rent, share, swap, lend, or barter their idle goods. As a result, this business model offers consumers a new way to make and save money while also providing organisations with an asset-light business opportunity.
Product as a Service
The "access-over-ownership" mindset is changing the way consumers buy products. In this model, manufacturers and retailers bear the costs of ownership while offering it as a service to customers—who become more product users than owners. It's a win-win situation when companies and customers work together to create new revenue streams, while customers benefit from significant cost savings and improved performance.
Circular economy helps solve the problems of poverty and rapid urbanisation in India
The circular economy is a solution to many of India's problems. It helps solve poverty and rapid urbanisation in India by encouraging recycling, reusing materials, reducing waste generation through better product design and use of resources more efficiently.
In order to effectively manage solid waste, the mission will concentrate on source segregation of trash, using the 3Rs- Reduce, Reuse and Recycle as a guideline; scientific processing of all sorts of municipal solid waste; repair facilities for old dumpsites through partnerships with stakeholders such as industry bodies or NGOs etc.; development of infrastructure within cities like new plants or upgradation/extension works at existing ones where necessary.
Blog Conclusion: India has a huge potential for a circular economy. Although there are huge challenges in this area, We at @thinkwithniche believe that with the right policies and regulations, India can become one of the leading countries in the adoption of a circular economy.
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