Circular Economy: Benefits & Limitations

A circular economy (also referred to as “circularity”) is an economic system that tackles global challenges like climate change, biodiversity loss, waste, and pollution.

Benefits offered by Circular Economy

For Economy

• Economic growth, as defined by GDP, would be achieved mainly through a combination of increased revenues from emerging circular activities.
• It lowers the cost of production through the more productive utilization of inputs.
• These changes in input and output of economic production activities affect economy-wide supply, demand, and prices.
• Its effects ripple through all sectors of the economy adding to overall economic growth.

For Environment

• It solves the problem of disposal of waste by converting waste into raw materials.
• Besides the problem of solid waste management, the circular economy also solves the problem of air pollution, water pollution, and land pollution.

For Individuals

• Lower cost for products and services
• Greater utility and choice
• Reduced negative externalities, e.g. congestion, pollution
• Increased Efficiency of the products

Limitations to the Circular Economy Models

There is some criticism to the idea of the circular economy:

• Linearity: Recovery and recycling of materials that have been dispersed through pollution, waste and end-of-life product disposal require energy and resources, which increase in a nonlinear manner as the percentage of recycled material rises.
• Waste Management: Impossibility for waste producers to dissociate themselves from their waste and emphasizes the contingent, multiple, and transient value of waste.
• Unavoidability: A key tenet of this principle is to consider waste as avoidable and worthy of interest.
• Utopian Concept: Circular Economy analogy of a circle evokes endless perfection; the analogy of scats evokes disorienting messiness.
• Capability: Proponents of the circular economy have tended to look at the world purely as an engineering system and have overlooked the economic part of the circular economy.

Need of the Hour

• India has a huge potential for reuse and recycling as less than 10-15% of the total waste generated goes into the recycling process.
• Circular Economy will boost the reuse and recycling of materials.
• To start with, sectors like construction, agriculture and vehicle and mobility can be considered as they are going to get the largest growth in coming years and thus India will be able to save more than Rs. 40 lakh Crore by 2030.