Circular Economy: Where India needs to focus?

Circular Economy requires creating institutional structures with built-into market incentives for promoting principles and practices where consumer becomes a user and the industrial system is regenerative by design so that the waste released by one turns out to be an input of the other.

The recent international conventions focusing on sustainability, climate, biodiversity and desertification have highlighted how lopsided economic development, unplanned urban expansion, non-sustainable land-use including deforestation, overgrazing and agricultural growth, and climate change associated to excessive rainfalls and floodwaters and their drainage, have played havoc with the human lives. Equally important are the challenges emerging out of the rise in the global population soon touching the 8 billion mark, global temperature up by 1.5 degree Celsius from the last 100 years ago, the resource depletion with natural gas remaining only for about five decades and oil reserves for about four decades. The Cape Town going dry, the hazardous air quality in Delhi and water crises reported in many Indian cities raise questions on the human actions and call for a radical mind-set transformations linked to consumption, production and resource-use.

India's estimated resource requirements touching 15 billion tonnes by 2030 for exceeding supplies adds urgency for decoupling economic growth from the resource-use and environmental damage. The emerging disproportionate health burdens on the poor and vulnerable population groups further adds urgency to search for a model which promises a just balance between India's current model of economic transformation and the required inclusive integrated sustainable human development while ensuring resource efficiency and conservation and checking ecological misconduct. Recently, emphases have been laid down to redefine and redesign the economic growth process for a regenerative economy, wherein materials, energy and resources are saved, waste recycling and product restoration are encouraged and supply risks get mitigated. The moving from linear to Circular Economy (CE, hereafter) will reduce externalities with positive employment benefits to the youth and will ensure everlasting economic resilience and enhanced value of natural and societal capital resources. Thus, the CE has been defined as an economic system wherein waste and pollution do not occur by design, products and materials find re-use and natural systems are auto-regenerative. The FICCI-Accenture and Ellen MacArthur Foundation (EMF) estimate about $218 billion opportunity per year for India by 2030 and about $4.5 trillion business opportunity for the world with a massive encouragement to innovative business ventures and start-ups.

Such a Circular Economy requires creating institutional structures with built-into market incentives for promoting principles and practices where consumer becomes a user and the industrial system is regenerative by design so that the waste released by one turns out to be an input of the other. The CE, thus, remains an integral part of resource saving and requires to coordinate a wide range of strategies related to products, resources and consumers; and if done properly with right enabling conditions, economic opportunities become endless and increasingly diverse crossing all boundaries. The experience of European Union countries, China and Japan suggest that resource efficiency should be mainstreamed in the development context. While endorsing the same the Sustainable Development Goals (SDGs) 2015 further indicate the role of resource efficiency and reconciling the different trade-offs between safe environment and growth required for humans' security. A few of the MNCs namely Google, Philips, Renault, Ricoh, Unilever and so on are already engaged in circularity practices and adopted resource-efficient supply chains, which had resulted into cost savings. Philips has introduced 'lighting as a service' business, Ricoh collects disassembles to reuse different parts of printers, scanners and related equipment.

With the globalization polices backed up by the rapid changes in information and digitally enabled technologies which have led to the Fourth Industrial Revolution (41R), the scope of economic diversification, value creation and additions and skill formation in India and other developing countries has gone up substantially. With such an informal sector contributing about half of the GDP and offering employment to about 90% of the workforce, the CE activities and practices offer a great scope. Only about 60% of discarded plastics out of the 25 thousand tonnes generated every day are recycled in India against 6% in the US. India's per capita consumption of plastic at 11kg per year is the lowest in the world with global average of 28kg per year. More than 80% of waste is collected/ processed by informal workers. About 95% of the e-waste processed in urban slums is by untrained persons unaware of the toxic effects. About 1.5 million people involved in the informal waste-junk management (Pickers), lacking adequate protective equipment. The empowering all such workers including engaged in electronic waste, plastic recycling, phone repairs etc. with basic knowledge and institutional support offer a great potential to engage in high-value CE supply chains. Further, the scope for moving from extractive to regenerative domains is abundant particularly in the case of food and agriculture cities, constructions (With 90% of the residential stock in the informal sector not subjected to any regulatory system) transport and manufacturing which constitute about two-thirds of household expenditure of an average India both in urban and rural areas. It is more so because the Indian social norms and consumer behaviour is found supportive to CE.

The adoption of regenerative applications and technology-led innovations by Organic India, INORA, Govardhan, for instance, have shown encouraging results with respect to income yield, health soil nutrients recovery etc. An integrated multi-model transport-system with build-in provisions of repairs and recycling would reduce energy-use, and enhance mobility. Tata Steel's Advanced Materials Research Centre in collaboration with IIT(M) to develop light-weight, high-strength materials for automotive companies, setting targets for collection and repairs of e-waste under Extended Producers' Responsibility (2016); production of 100% organic, bio-degradable and eco-friendly plastic bags by Envi Green; Room/home sharing under Airbnb & OYO; Uber/Ola pooling for passengers; E-waste Rules (2018) related to diverting waste from local scrap merchant experiments to bury shredded plastic in roads; use of perforated clay bricks (which require 15% less materials), are important initiatives. The recent government of India policies related to the Zero Defect in manufacturing stage, National Electricity Mobility Mission Plan, Waste Management Rules further supported by technology and finance mechanisms across, if tweaked properly, can integrate CE into the Indian development systems, and India can 'leapfrog' developed countries.

Note: Dr. Guljit K. Arora is Principal, Dr. Bhim Rao Ambedkar College, Univesity of Delhi and Ayush is a Law Practioner and currently engaged with CCI as Research Associate.

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