By Dr Ahmad Ibrahim
There is much talk about the circular economy (CE). Most countries now recognise that CE is no longer just an option.
It is a must for a sustained global economic resilience. No wonder many developed economies view CE as urgent.
This will change the global market for products and services. As a nation very dependent on external trade, Malaysia must also transform towards CE.
New market rulings on CE may deprive us access if we do not conform. There is no denying that embracing the circular economy is essential in building a sustained and resilient economy.
There are several compelling reasons. The circular economy is a systematic approach to economic development designed to benefit businesses, society, and the environment.
It contrasts with the traditional linear economy, which follows a “take, make, dispose” model of production. We need to transition to a circular economy.
The Earth’s resources are finite, and the linear economy’s reliance on extracting, using, and discarding materials is unsustainable.
A circular economy emphasises the continuous use of resources, reducing the need for virgin materials and minimising waste.
By reusing, recycling, and repurposing materials, we can significantly reduce the environmental impact associated with resource extraction, such as deforestation, habitat destruction, and water pollution.
This will build economic resilience. A circular economy reduces dependency on volatile raw material markets, which are subject to price fluctuations and geopolitical risks. By creating closed-loop systems, businesses can secure a more stable supply of materials.
Companies can achieve significant cost savings by designing products for longevity, reuse, and recycling. This reduces the need for constant raw material input and waste management costs.
There is much evidence to show that CE will result in job creation and economic growth. The circular economy fosters innovation and the development of new business models, such as product-as-a-service, remanufacturing, and sharing economies.
These models can create new revenue streams and job opportunities. Circular practices often involve local recycling, repair, and refurbishment activities, which can stimulate local economies and create jobs in communities.
Reduced carbon footprint is a major environmental benefit of CE. Circular economy practices, such as recycling and energy recovery, can significantly reduce greenhouse gas emissions.
For example, recycling aluminum uses 95 per cent less energy than producing new aluminum from raw materials. By designing out waste and keeping products and materials in use, the circular economy minimises the amount of waste sent to landfills and incinerators, reducing pollution and conserving landfill space.
Enhanced competitiveness is a key outcome of CE. Companies that adopt circular economy principles can differentiate themselves in the market by offering sustainable products and services.
This can enhance brand reputation and customer loyalty. As governments worldwide implement stricter environmental regulations, companies that proactively adopt circular practices will be better positioned to comply with these regulations and avoid potential fines or sanctions.
CE will lead to improved quality of life. A circular economy can lead to cleaner environments, reduced pollution, and healthier communities.
This can improve the overall quality of life and reduce healthcare costs associated with environmental degradation. Circular economy models, such as sharing economies, can provide more equitable access to goods and services, reducing inequality and promoting social inclusion.
The circular economy aligns with several United Nations Sustainable Development Goals, including responsible consumption and production (Goal 12), climate action (Goal 13), and life below water (Goal 14).
By embracing the circular economy, we can make significant progress toward achieving these global goals.
As the global population continues to grow and resource constraints become more pronounced, the circular economy offers a pathway to sustainable growth that can meet the needs of future generations without compromising the planet’s health.
CE can ensure supply chain stability. The Covid-19 pandemic highlighted the vulnerabilities of global supply chains. A circular economy, with its emphasis on local sourcing and closed-loop systems, can enhance supply chain resilience and reduce the risk of disruptions.
Furthermore CE practices encourage adaptability and innovation, enabling businesses and economies to better respond to global shocks, whether they are economic, environmental, or health-related.
The transition to a circular economy is not just an environmental imperative but also an economic and social necessity. It offers a holistic approach to addressing some of the most pressing challenges of our time, including resource scarcity, environmental degradation, and economic instability.
By embracing the circular economy, we can build a more sustainable, resilient, and equitable economy that benefits both current and future generations.
Countries around the world have developed the necessary framework and roadmap to transition to CE. Malaysia has also taken the key steps to put in place a national CE framework applicable to all economic sectors, including future ones. – BACALAHMALAYSIA.MY
- The writer is a professor at Tan Sri Omar Centre for STI Policy, IISDS, UCSI University and Associate Fellow, UAC, University Malaya
