Are developing nations the ideal testing ground for circular economy practices?

As UN ministers look set to create a taskforce to eradicate the 'ocean Armageddon' of plastic waste and foster growth of closed-loop systems, a new Chatham House briefing paper suggests that the circular economy would enable developing nations to "leapfrog" to more sustainable frameworks.

Ministers of the UN Environment Assembly are meeting in Nairobi, Kenya to discuss how a global taskforce targeting plastic waste could be established. The ultimate aim of the taskforce would be to advise governments and businesses on how to reduce plastic waste, which now accounts for 95% of the rubbish in our oceans.

Specifically, the UN environment head Erik Solheim told Sky of his optimism in creating a circular economy for plastics over the next 20 years. But plastics represent a major conundrum for business across the world. As the Ellen MacArthur Foundation notes, “plastics are one of the most wasteful examples of our existing linear, take-make-dispose economy”.

Although most nations understand the need to move away from this linear economy, the major challenge is actually doing so; but even circular economy pioneers like HP and Philips are continuing to navigate a complex minefield of challenges.

A new Chatham House briefing paper, released on Tuesday (5 December) outlines that while developed countries are creating the frameworks to catalyse the circular economy, it is developing nations that could truly benefit.

A Wider Circle

The A Wider Circle? The Circular Economy in Developing Countries paper notes that developing nations are inherently “more circular” than the developed countries, although this is often born out of economic necessity.

Much economic activity in lower-income countries depends on waste management and reuse and one of the major opportunities of the circular economy is finding ways for these nations to “leapfrog to a more sustainable development pathway that avoids locking in resource-intensive practices and infrastructure”, the report notes.

“The existence of circular activities in developing countries provides excellent political ‘entry points’, which could enable governments, the private sector, civil society and other actors to promote innovative economic models,” the report states. “The circular economy could provide a powerful narrative, helping to build momentum around a set of ideas that can be applied in and tailored to multiple sectors or cities.”

The paper claims that despite growing momentum, many barriers exist for businesses in developed countries to capture value in circular economy models. This is mainly because most sectors are locked into linear systems. While China and the European Union (EU) are both implementing closed-loop framework policies, the paper suggests that piloting approaches at scale in developing countries could prove beneficial.

The EU’s Circular Economy Package examines the benefits of product design, and includes a review of all eco-design directives on the environmental impacts of products, but it is still fleshing out how to capture wide-ranging benefits.

China has major legislation in place, including the policy that three-quarters of top industrial parks having to implement closed-loop practices under a Governmental five-year plan. But it is the changes to China’s resource policies that will likely impact developing nations.

While the EU’s circular economy approach will likely reduce exports of waste streams like plastics and electronics, China’s legislative shift has created a proposed ban on imports of scrap plastics, unsorted waste paper and more than 20 other waste streams. Set to come into force in January 2018, the move will place extra scrutiny on the role of trade of materials suitable for reuse.

Trade dynamics

The paper suggests that legislative changes from developed nations will create new trade dynamics, and cross-nation agreements will be needed to unlock the value of circular economy products and material streams. Specifically, the paper notes that lower non-tariff barriers and addressing the lack of clarity on rules that apply to secondary materials will need to be examined.

Again, developing nations could well work as a test bed to examine the required cross-nation collaborative approaches. Governments in Rwanda, Nigeria and South Africa are working with the World Economic Forum and the EU to launch the African Alliance on Circular Economy.

The African Development Bank is exploring how the circular economy can support the industrial development pillar of its strategy and studies suggest that this could have huge societal benefits. Not only is poor waste management aggravating the global water crisis, but the open burning of waste has been linked to the premature deaths of around 270,000 people annually.

There’s also the impact on job loss and creation to examine. WRAP estimates that the circular economy could create three million jobs across Europe by 2030. But in India, for example, 1.5 million people already earn livings from an informal waste management sector that processes 80% of the country’s waste. The paper warns that “careful approaches” are needed to avoid displacing this workforce. In fact, the Ellen MacArthur Foundation claims that the circular economy could generate $218bn for India by 2030 – still short of the potential €1.8trn benefit for European economies.

As with developed countries, barriers regarding technology and methodologies still exist for circular economy practices. While the paper suggests that affordable asset-tracking technology and predictive analytics would optimise certain systems, it does claim that measuring progress towards the circular economy would still be a challenge.

But with Nigeria able to reuse 70% of all imported e-waste and India able to create a 100% organic and biodegradable plastic bag, techniques exist in developing nations to drive the agenda. Equipping these nations with more knowledge, finance and requirements to embrace the circular economy could push nations out of poverty and linear economies and alleviate the pressures surrounding resource use.

Matt Mace

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