Circular economy could hold key to global economic recovery
The economic fallout from the COVID-19 pandemic is far reaching and ongoing, affecting all nations throughout the world. While there are still many unknowns — How long will the pandemic last? Will and when could we see a vaccine ready for distribution? What will the end economic picture look like? — we need to consider post-pandemic economic recovery strategies and the opportunities that might be available to build a more sustainable way of living for the future.
A more sustainable model based on a circular economic framework could ease financial recovery while also working towards achieving net zero carbon targets.
A group of academics from the UK, Malaysia, Nigeria, UAE and Japan — led by WMG, University of Warwick — has investigated how the positive and negative effects of COVID-19 can be leveraged to build a new, more resilient and low-carbon economy.
Publishing their paper in the journal Resources, Conservation and Recycling, the researchers concluded that adopting circular economy strategies would be the best way for the world’s economy to recover, while enabling the transition to a low-carbon economy.
COVID-19 has disrupted and strained global supply chains, and unsettled the financial market, resulting in cross-border economic devastation. Lockdowns and border closures have destabilised modern world economies, with the economic shock still being weighed across the globe. Economically, the effects can be felt everywhere due to significant financial losses across macro and micro levels of the economy, including global supply chains, international trade, tourism and aviation, and many other sectors.
On a more positive note, the pandemic has resulted in changes to behaviour and attitudes, with positive influences on human health and the planet. Some of the benefits include:
- Air quality improvement.
- Reduction in environmental noise and traffic congestions has led to an increase in the number of people exercising outside.
- A reduction in tourists has reduced exploitation of beaches, leading to increased cleanliness.
- Decline in global primary energy use. Coal use decreased by 8%, oil by 60% and electricity plummeted by 20% compared to the first quarter of 2019, leading to record low global CO2 emissions.
- Awareness of the need for diversification and circularity of supply chains, and public policies for tackling urgent socio-economic crises.
To make the world resilient post-COVID-19, the researchers recommend that all sectors adopt a circular economy framework.
“The pandemic has highlighted the environmental folly of [the] ‘extract, produce, use and dump’ economic model of material and energy flows; however, the short-term resolutions to cope with [the] pandemic will not be sustainable in the long run, as they do not reflect improvements in economic structures of the global economy,” said WMG’s Dr Taofeeq Ibn-Mohammed.
“We therefore propose circular economy adoptions for all industries, with different strategies for each one. For example, embracing the transformative capabilities of digital technologies for supply chain resilience by leveraging: big data analytics for streamlining supplier selection processes; cloud computing to facilitate and manage supplier relationships; and Internet of Things for enhancing logistics and shipping processes.
“The post-COVID-19 investments needed to accelerate towards more resilient, low-carbon and circular economies should also be integrated into the stimulus packages for economic recovery being promised by governments, since the shortcomings in the dominant linear economic model are now recognised and the gaps to be closed are known,” he explained.
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