Interest in the “circular economy” has grown over the past decade in recognition that current rates of resource consumption are unsustainable. The shift to a more sustainable model of economic growth requires a circular economy in which products are recycled, repaired, or reused, and waste from one process is used as an input into others.
In 2015, the Paris Climate Agreement and the Sustainable Development Goals both highlighted the urgent need for “transformative” approaches to reduce greenhouse gas emissions and resource use. At the same time, a circular economy is being made possible by advances in information technology. Digital “Ebay-style” marketplaces for waste products and materials are, for example, being piloted in the United States and “trace and return” software is allowing firms to track products in the economy to optimise use and facilitate repairs and upgrading.
Until recently, the circular economy has largely been considered a rich-country agenda. Although pressures from resource extraction and waste are often more immediate in developing countries. Despite these countries often being considered more “circular” than wealthier ones, few studies have assessed the opportunities and risks for lower-income countries that are shifting towards a circular economy.
A new briefing paper by Chatham House addresses this gap. It argues that shifting towards an economy focused on reuse, remanufacturing and recycling may provide an urgent boost to growth and jobs in developing countries.
Careful approaches will be needed to manage potential trade-offs between the benefits and drawbacks of circular approaches, including those around the climate impacts of some “waste-to-energy” technologies that incinerate rubbish to generate electricity.
The paper also argues that the European Union (EU) and other leading countries can do more to work with developing countries and improve international cooperation in support of the circular economy. Here, China has a key role to play as the decisions it takes on its domestic economic agenda, on trade policy and on overseas investments will have a profound impact on the direction of travel.
China’s circular economy strategy
As a major manufacturer and processor of natural resources, China sees some of the worst effects of unchecked resource extraction and waste production. In 2014, China generated 3.2 billion tonnes of industrial solid waste, only two billion tonnes of which were recovered for recycling, incineration and reuse.
The growing waste crisis has had lethal consequences; 73 people were killed in a landslide at a waste dump in Shenzhen in 2015. Even when waste is managed, reliance on poor-quality processes can make matters worse. China has seen dozens of protests by local residents over waste-incineration projects.
However, the government has been taking action. It has set targets, introduced financial measures and passed laws to promote a circular economy. It is one of the few governments to have a circular economy strategy and law, and the concept has featured prominently in both the 12th and 13th Five-Year Plans.