The Circular Economy & Development
By admin November 2, 2018

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At the beginning of 2018, the World Economic Forum stated embracing the circular economy was “the biggest opportunity of our lifetime.” The circular economy is a framework for an economy that is restorative and regenerative by design. This framework builds economic, natural, and social capital and is based on three principles: (1) design out waste and pollution; (2) keep products and materials in use; (3) regenerate natural systems. It directly combats the throw and replace culture that permeates everyday life and fights to replace it with a return and renew mindset.

The promises of the circular economy stretch far and wide – from reduced waste and increased sustainability to new trade opportunities and job creation. Most impactful however, is the shift to a systems thinking perspective and in consumer behavior required that will promote sustainability in communities, economies and in our environment.

With the emergence of companies such as Uber, Airbnb, and Couchsurfing came the mainstreaming of principles of the shared economy. We are now seeing this expand to the mainstreaming of the circular economy framework with major companies like BMW, Eileen Fisher, Adidas, Timberland, Nestle and even Dell working to close the loop and produce products that embrace the model of circular economies. There is even a beer company, Toast Ale, making beer from bread waste. More and more consumers are drawn to models of circular economies, this is where the future of consumption lies and companies are responding.

While this movement has been primarily focused in developed markets, it is not exclusive to them and has great promises for developing countries. Embracing the principles of the circular economy will be essential in achieving the UN’s Sustainable Development Goals by 2030 and seeing the achievement of the triple bottom line of sustainable development – environmental, social and economic development.

In moving industry in developed countries towards circular and shared economies, their application in low-resource settings, such as developing countries, and how these principles can create a platform for equitable development must be considered.

Developing countries are well positioned to transition to the circular economy as they have higher degrees of circularity pre-existing compared to developed countries. For example, principles of shared economics are already being used to improve access to resources in low-income and developing countries. Programs such as Uber for tractors are giving small stakeholder farms in countries including Nigeria, Kenya, Ghana, India and the Philippines, access to farm equipment that traditionally was inaccessible due to high capital costs. Access to these resources improves yields for farmers and saves time and labor costs.

Circular activities in developing countries also have the potential to enable governments, multi-lateral organizations, the private sector, civil society and others to innovate economic models to help build momentum around them that can improve the livelihoods of low-income communities and promote sustainable development in developing countries.

The circular economy has the potential to reduce the risks of price volatility, dependency on foreign imports and create savings on raw material costs. Research has also shown that the circular economy could increase low-skill jobs in processing waste and allow for the development of a skilled workforce in remanufacturing. This has the potential to increase the competitiveness of developing countries.

The opportunity of the circular economy needs to be embraced not just by developed markets and large companies but by governments and aid and donor organizations working towards sustainable development and building equitable communities in developing countries.


Further Reading:

  1. A Wider Circle? The Circular Economy in Developing Countries
  2. What does circular economy mean for development?
  3. Circular Economy: The New Normal
  4. The Origins of the Circular Economy

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