Change in Mindset Needed to Stimulate Circular Economy

10:21:05 AM | 25/11/2019

If the linear economy works like a stream, turning natural resources into products tending to be sold as much as possible, resulting in increasingly wasted resources, the circular economy will recycle goods and materials, create jobs, economize energy, reduce resource consumption and mitigate environmental pollution.

Inevitable trend

In nature, the circular economy is a sustainable development trend that achieves two goals at the same time: Responding to the exhaustion of input resources and the environmental pollution in output development. The circular economy will turn products at the end of their life cycle into resources for other products, fill gaps in industrial ecosystems and minimize waste.

Mr. Tran Hong Ha, Minister of Natural Resources and Environment, said, Vietnam ranked 68th in the world by area and 15th by population, but it ranked 4th globally in plastic waste disposal, at 1.83 million tons a year. Citing a report by the World Bank (WB), he noted that air pollution cost 5.18% of Vietnam’s GDP in 2013 and water pollution cost 3.5% of its GDP.

Recently announced worsening air pollution is thought to be a consequence of conflicts of economic development and environmental protection. This shows that the circular economy is a vital trend for sustainable development.

The latest National Conference on Sustainable Development recorded successful circular business models adopted by some companies like HEINEKEN Vietnam Brewery Ltd, Coca-Cola Beverage Vietnam Ltd, and Loc Phat Breeding Farm in Binh Phuoc province.

Many studies show that the circular economy, at a low level, focuses on manufacturing processes enterprises and agricultural products. Manufacturers are encouraged and required to apply cleaner production methods and ecological designs. At the high level, the corporate level, all stages of manufacturing process are designed and no waste is released to the environment. Waste is minimalized, reused and recycled. Thus, the circular economy requires the engagement of all stakeholders: Government agencies, input producers, traders, processors, manufacturers, distributors, retailers, consumers, and garbage collectors.

Current and future CE models

According to many economic experts, Vietnam is yet to have a full circular economy model. Current models just deal with recycling and reuse of some types of waste for economical purposes and for individual benefits of production facilities, and are mainly applied by large enterprises or foreign-invested enterprises. Those models have not produced great benefits for the whole community according to circular criteria.

According to Mr. Nguyen Quang Vinh, Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), Vice Chair and Secretary General of the Vietnam Business Council for Sustainable Development (VBCSD), the circular economy is proven to be a superior model because it creates profits and jobs and produces social and environmental values at the same time, thus leading us towards a green economy, transforming daily commodities as a resource to be used in the future and eliminating the concept of waste. The circular economy will help businesses reduce production costs, increase competition and lead to sustainable development opportunities.

According to experts, a circular economy must adhere to the following principles: Design for reuse, flexible diversity (diversity of company types, business models and production systems, mutually reinforced business networks); use of never-ending energy sources; logical thinking (operating systems interact with each other, give rise to dependencies and create feedback loops that reinforce the flexibility of the circular economy); and development based on biological platforms.

To foster and develop the circular economy in Vietnam requires a good legal corridor where businesses are placed at the heart to play a central driving role, the government plays a constructive role, and civil society and consumers act to implement it. According to experts, instead of having to come up with new solutions, Vietnamese businesses can refer and creatively apply successful lessons of the circular economy. In particular, there is need to change the mindset from linear economy to circular economy, treat waste as a new source of input for production, learn from the regeneration and circulation of nature, admit that all resources are limited to use those limited resources for production, and raise awareness of industrial symbiosis, use of renewable energy and cleaner production.

The Vietnamese Government has been reportedly making efforts to build the circular economy. In 2016, it launched the National Action Program on Sustainable Consumption and Production (SCP). In 2017, the Prime Minister approved the Project on Vietnam Environmental Industry Development to 2025, which can meet contents and requirements of the circular economy. The Ministry of Industry and Trade is also drafting a National Action Program on SCP with circular solutions and views for implementation in the 2020-2030 period.

Nguyen Thanh