In a recent Neftake, the EU Ambassador eloquently set out the case for green, resilient, and inclusive recovery, supported by a green finance agenda. Green investment is set to play an expanding role in economies: the World Economic Forum estimates that globally, the green bond market could be worth $2.36 trillion by 2023; increasingly, banks, insurers, and investors are committing to ensuring their investments and lending are aligned with net-zero. This mobilization of private capital, of green finance, seeks to channel funds into sustainable practices that offer environmental benefits and a decent return.
Much of this funding will undoubtedly be channeled towards important climate adaptation and mitigation priorities. Circular economy (CE) models and innovations can also target climate-related objectives and be an attractive destination more generally for green finance. Yet, in Nepal, where conceptions of development are rooted in transport infrastructure, international trade, and urban centers with concrete structures; where the environment is commoditized; where political priorities are short-term; CE transitions — and a genuinely green, inclusive recovery — seem challenging to imagine.
But imagine we must. A Chatham House report on an “Inclusive Circular Economy: Priorities for Developing Countries” offers some relevant and timely perspectives.
If the CE is to gain political traction and attract investment, it argues, it is crucial that strategies be aligned with existing priorities. Opportunities for value creation through a transition to a CE exist across many sectors in Nepal — from waste to machinery repair, to textiles, to resilient design in construction.
A separate report on CE opportunities in India from the Ellen Macarthur Foundation analyzed CE in cities. It sets out a bold vision, making the case that circular economy principles could be incorporated into the design of infrastructure, to provide water, sanitation, and waste services at scale, creating “effective urban nutrient and material cycles.” Systemic planning of city spaces, integrated with circular mobility solutions, including vehicle sharing models and on-demand mobility, “can contribute to higher air quality, lower congestion, and reduced urban sprawl.” It’s also not just about what we create, but how we use it: flexible use of buildings and urban spaces, enabled by digital applications, can increase utilisation rates, getting more value out of the same assets. In rural areas, regenerative, circular forms of agriculture such as agroecology can dramatically reduce fertilizer and land use, while contributing to improved soil health and ecosystem conservation. Circular water management can support the restoration of ecosystems.
There are, of course, challenges to scaling up the CE in Nepal, reasons, why the futures imagined above, are not easily attainable. To take just a few: limited institutional capacity can constrain the use of punitive measures such as taxes on waste; growing urbanisation inevitably requires primary materials (such as concrete) for construction — with a lack of reusable alternatives; in the recycling economy, companies cite the logistics and cost associated with collecting and separating solid waste, along with an unpredictable onward value chain for materials. For the millions of people across South Asia who already make their living by extracting value through closing material loops or extending product lifetimes, the challenge is often access to finance and technical expertise.
Whilst challenges clearly exist, it is evident that there is potential for CE models to attract investment and make a major contribution to the development agenda. Its potential for job creation, economic development, and increased social welfare is significant. It offers a useful pathway through which to embed sustainable resource use at the heart of industrial growth, whilst leveraging the strengths of large workforces and vernacular knowledge. The DNA of CE thinking helps to tackle pressing issues of sustainable development, social justice, and human wellbeing. Plotting such a path seems overwhelming. Sometimes it’s useful to start by imagining.
Himalayan Circular Economy Forum
Ellen MacArthur Foundation, Circular Economy in India: Rethinking growth for long-term prosperity, 2016, http://www.ellenmacarthurfoundation.org/publications/.
Preston et al., An inclusive circular economy: priorities for developing countries, Chatham House, 2018, https://www.chathamhouse.org/2019/05/inclusive-circular-economy/executive-summary