Smart solution to waste
Asia has been slow to shift from a ‘make, use and dispose’ economic model – but Germany shows the benefits of encouraging recycling
That many major economies are facing the prospect of severe energy shortages this winter should sound the alarm that investment in renewable energy alone will not be enough to reduce the effects of climate change.
Our current unhealthy dependence on a linear economy where we “make, use and dispose” is no longer sustainable. As the COP26 climate conference comes to an end in Glasgow, it is worth thinking about why many parts of the world, particularly Asia, lack the momentum to aggressively transition from a linear to a circular economy.
In a circular economic model, everything has value and nothing goes to waste. Its primary intention is to close the circle of consumption and create value for people, institutions and, above all, the planet.
Although most politicians and business leaders recognise the importance of this transition, they often cite costs and the lack of profitability as the major reasons it is not feasible.
While it is important to acknowledge the additional costs businesses take on to implement greener measures, more could be done to debunk the myth that the circular economy is anti-growth and anti-profit. The World Economic Forum estimates that the circular economy can add US$4.5 trillion in economic benefits up to 2030.
The circular economy embodies both for-profit and notfor-profit features by optimising resource use and profitability. When combined with renewable resources, it offers businesses
massive opportunities for savings in resource productivity.
Our most common circular economy adoption so far? Recycling. The circular economy goes beyond that, though.
By demanding a greater energy contribution to the processes of repairing, reusing and remanufacturing, this model reduces energy consumption levels holistically. Its social and economic benefits make it a much-needed alternative to today’s mainstream capitalist practices that put profit above all else.
What can we do to catalyse this transition? In hindsight, smart government regulations remain the most effective short-term solution. For that, look no further than Germany, named the world’s best recycler in 2017 by environmental consultancy firm Eunomia.
In 1991, German policymakers
introduced a packaging law making manufacturers and retailers responsible for the recycling or disposal of packaging material. A “dual system” for waste collection, in which household packaging waste is picked up separately from regular municipal waste, was implemented.
Manufacturers pay fees based on the weight of their products’ packaging, encouraging them to use less. These products come with a recognisable “green dot”, now a world-renowned symbol.
This system has done wonders for the German municipal recycling rate, which increased from 3 per cent in 1991 to more than 60 per cent in 2020. It has
been adopted by many European countries and become the industry’s gold standard.
Germany doubled down on its efforts through the 2019 German Packaging Act to further reduce the environmental impact of packaging waste by making more producers and distributors, including online retailers, register and contribute to the recycling system.
The message is clear – no registration, no business. There is no evidence that this has severely hampered German economic growth so far.
Germany also encourages recycling by ordinary citizens through its bottle return system in which consumers pay a deposit for certain products, most notably beer bottles.
To retrieve the deposit, they have to use the bottle collection machines widely available at grocery stores and supermarkets. This has helped instil the recycling habit.
While the German recycling solutions still have room for significant improvement, they prove that if the cost-sharing burdens are executed right, the financial costs borne by businesses could be manageable and certainly far less than a damaged environment.
It is quite surprising that these proven solutions have yet to be replicated in Asia. They serve as a good reference point for smart regulations for politicians touting the famous 3R slogan of “reduce, reuse, recycle”.
At the financial level, generous government subsidies with strict impact-based assessments must be expanded to support businesses committed to providing green solutions, until the industrial ecosystem has matured sufficiently to function as a circular economy.
Subsidies for electric vehicles by governments, for instance, helped Tesla become the indisputable leader in the field in the United States and Norway.
Why not go further? If China can start a stock exchange exclusively for small and medium-sized enterprises to address the problem of big business monopolies, it might not be so crazy to start a bourse for green solution-driven businesses and innovations.
Interestingly, but perhaps not surprisingly, young people who have had access to better education on environmental sustainability seem to lead the way in green innovations, which create many jobs. These young people should be celebrated as role models for businesses and those individuals who are reluctant to participate in the transition to a circular economy.
Tesla founder Elon Musk, who became the world’s richest person this year, has benefited from the global green revolution.
These bold steps are how governments can achieve the best possible results in the quickest possible time. Relying on personal and corporate social responsibility alone to achieve a circular economy is a fantasy.
More government intervention is necessary to shake up the status quo to safeguard our common destiny on this planet.
In a circular economic model, everything has value and nothing goes to waste