Report argues boosting reuse, remanufacturing and recycling in lower income nations can drive economic development and employment opportunities
Building a more circular economy focused on reuse, recycling and remanufacturing may provide a powerful means of boosting growth and jobs in developing countries around the world.
That is the conclusion of a new Chatham House briefing paper, published today, which argues a growing waste crisis in many developing countries is creating an urgent need to find new ways of reducing resource consumption. It said that as a result potential opportunities to generate employment and economic development from of reuse and remanufacturing are opening up in developing and emerging economies.
Many such counties have a "competitive advantage" over industrialised economomies in these sectors due to their existing expertise in repairing products and sorting and reusing waste, it adds, which can help them "leapfrog" make-use-dispose business models in favour of more sustainable circular economy development pathways.
The paper also argues that developing a more circular economy in developing countries will deliver significant climate change benefits, noting that landfill and waste dump sites are projected to account for around 8-10 per cent of greenhouse gas emissions globally by 2025. It warns that meeting emissions commitments made in the Paris Agreement will be "impossible" without a renewed emphasis on ensuring natural resources are used more efficiently. It estimates more efficient practices could cut waste-related emissions by 60 per cent by 2050.
Consequently, the report argues the circular economy could be a "powerful new pathway for industrial development", with better management of resources a key component of poverty eradication as well as climate change mitigation and resilient economic growth.
In addition, business could benefit from more ambitious resource efficiency policies. "Businesses are looking closely at the opportunities that the circular economy presents in terms of enhanced resilience and value creation - the types of firms exploring these areas are varied, ranging from major corporates with global supply chains to small businesses introducing innovative waste-management practices in cities," the paper states.
It also highlights a growing interest in circular economy efforts within the international development community, with governments in Rwanda, Nigeria and South Africa working with the World Economic Forum and the EU to recently launch the African Alliance on the Circular Economy.
The report argues the EU and other industrialised economies have a key role in entering into constructive dialogue with developing countries to improve international cooperation in support of the circular economy and remove trade barriers to recycled and re-manufactured products. The EU in particular, it points out, is currently developing its Circular Economy Action Plan, which is likely to lead to a reduction in exports of waste to developing countries, while also undermining demand within the EU for raw and processed materials from developing nations. Some experts fear that despite its good intentions, the EU's proposals could have an adverse impact on emerging recycling industries in developing countries.
There are also concerns that developing world waste management industries are struggling to climb the value chain and support the wider circular economy vision. For example, while there is significant economic activity in developing countries relating to the sorting and re-use of waste, higher value, employment-generating opportunities for remanufacturing and recycling are yet to be fully harnessed, in part due to a lack of infrastructure capacity and poor access to digital and mobile technology. Work should therefore focus on tying the circular economy more closely to the UN Sustainable Development Goals, many of which are strongly linked to better resource management, the Chatham House report argues.
"The circular economy is rising up the development agenda," the paper concludes. "It appears to offer a credible industrialization pathway in an era of digital disruption and automation. It will help create value out of challenges, such as resource scarcity and pollution, that could otherwise undermine development gains. It may even provide new thinking for how to make the difficult transition from informal to formal employment."
The circular economy clearly offers a huge opportunity for industrialised and developing economies alike, but can they now work together to ensure those opportunities are realised?
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