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Why we need to transition to a circular economy

  • Published at 05:20 pm July 19th, 2018
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A circular economy requires a rethinking of our current economic system Photo: pixabay.com

At the heart of the Paris Agreement lies mitigation -- the seemingly insurmountable task of reducing global greenhouse gas emissions to curtail the consequences of climate change. According to various studies, 65% of greenhouse gas emissions comes from fossil fuels combustion, 24% from industrial activities among which up to 67% is estimated to come from management of materials activities. 

Since the Industrial Revolution, our modern economy has depended on the transformation of natural resources into products. This means that fossil energy and natural resources extraction and use were and still are the driving forces behind economic growth. 

However, this linear economic model ("produce-use-dispose") is characterized by an exhaustive value chain and copious waste production which couples with poor natural resource capital management resulting in drastic environmental degradation and greenhouse gas emissions, which are at the centre of climate change issue. Moreover, this depletion of resources and economic impact of climate change directly threatens the viability of businesses, which in the future will have to compete harder for access to primary resources.

Thus, it is urgent for our society to rethink the current economic model if we want to ensure future generations will be able to thrive on this planet. This calls for a deep and long term change in the way we think about the utilization of natural resources; particularly how they are transformed into capital. For instance, a forest provides both wood that can be utilized by the economy; but also plays important ecosystem services in terms of regulating temperature, providing oxygen, and even reducing the impacts of climate change by absorbing CO2. 

The concept of the circular economy, based on the idea of a closed economy, emerged to deal with the specific limitations of our current economic model and could help to cut up to 33% greenhouse gas emission from material management. 

Indeed, according to the definition of the Ellen MacArthur Foundation, the circular economy is an “industrial system that is regenerative and restorative by design rethinks products and services to design out waste and negative impacts, and builds economic, social and natural capital.” Moreover, a circular economy is seen as a third pillar of climate international policies and serves both mitigation and adaptation efforts.

It supports mitigation actions by emphasizing a maxims use of already circulating resources, use of regenerative resources (as oppose to non-renewables), and better design of products for easier repair and recycling, thus allowing a reduction in greenhouse gas emissions from both natural resource extraction and from some industrial transformation processes. 

Additionally, a circular economy can be a climate change adaptation approach in that it ensures interventions are not so resource intensive so that they cannot sustain into the future. 

However, the actual design of a circular economy is still in development, and its potential has not fully been tapped. More research into value chains and the discipline of ecological economics (as opposed to environmental economics) are needed, which could render a circular economy a reality both in Bangladesh and abroad.

Anne-Laure Pilat is a visiting researcher at ICCCAD with a background in Public and European environmental law.