Benefits and advantages of a circular economy

Topic: Circular economy: Diverting food waste and food loss

I. Introduction

Sustainability has now become a major issue with a much more globalized business operating environment. Here, consumers are now demanding that governments and businesses look to ensure that the resources are preserved in such a manner that future generations are able to leverage their benefit. This is a stark departure from popular sentiments just a few decades ago. Here, the prevailing economic theory of the time postulated that businesses only existed to maximize shareholder wealth. Here, it was thought that as shareholder provided the majority of capital to a business and took a majority of the financial risk of failure, the rewards should therefore flow to these individuals. However, this thinking has shifted to incapsulate many environmental, social, and governance standards aimed at creating a much more sustainable operating environment for businesses. These standards are based on the premise that business has an obligation not only to its shareholders but also to its community, employees, and society overall. This shift in mindset has allowed for society, business, and government to work together to provide more sustainable product offerings and solutions consumers (Anja, 2018).

This concept of sustainability has manifested itself in many emerging industries such as renewable energy, electrification of vehicles and reduction of carbon emissions. Each of these areas requires investment on the part of government to provide financial incentives for doing so. This has occurred in the electric vehicle market through government tax credits. This has also occurred in the renewable energy sector with public-private partnerships. Each of these elements help to create solutions that are mutually beneficial for all stakeholders involved. These sustainable solutions are what underpin a circular economy (Ahmed, 2021).

As it directly relates to food waste and food loss, agricultural initiatives are now becoming increasingly important. This is particularly true as population growth and demands from society continue to increase. As result a large number of investments are required to create a circular economy as it relates to food. For example, investments will need to be made in infrastructure as consumers, particularly in third world countries will require adequate methods to travel to markets. Likewise, innovations that improve overall crop yields will also be needed. These innovations will involve three primary categories which include environmental quality, agriculture productivity and socio-economic viability. Each of these elements will be discussed in detail below are integral elements within the overall circular economy as it relates to food waste (Anna, 2021).

II. Core Concepts

a) Definition of Circular Economy

According to the Ellen Macarthur foundation a circular economy is a method of processes and behaviors that involve activities designed to increase sustainability. These activities often include recycling, refurbishing, reusing, and sharing of materials and products. Here, the objective is to minimize hard to the planet, by utilizing resources for as long as possible, while being mindful of productivity (Rizos, 2017).

b) Circular economy across the value chain

Here, it is important to understanding that a circular economy often leverages various inputs across the value chain. These inputs can often have a very dramatic impact on the overall output and success of the circular economy. For example inefficient farmers using antiquated methods can cause lower crop yields. These lower crop yields impact all other elements with the value chain subsequently including distribution, product pricing, and carbon emissions. Here, every element within the value chain should be enhanced through sustainability initiatives. The Farmer for example should recycle used products or materials during the production process. Distributors should use reusable or recycled packaging to delivery the products to the store. The store should have a portion of its energy needs being met from renewable sources. The grocery delivery staff should utilize electric vehicles that reduce carbon emission. Finally, the consumer should recycle the packaging used once the groceries are consumed. Here in each stage of the value chain, each participant in engaging in sustainable behavior that helps preserve natural resources (Juana, 2018).

c) How does circular economy eliminate food waste and food loss?

Through leveraging the above value chain, food loss and waste is mitigated. Here, each participant in the value chain is looking to reduce the impacts of both production and consumption. Waste is avoided through proper design and implementation at each stage of the value chain. Food spoilage for example is reduced through sustainable initiatives to increase crop yields. Likewise, food resources that are not utilized are then re-integrated within the value chain with a circular fashion. This heavily reduces waste as resources are continually re-utilized throughout the process (Armand, 2020)

d) Definition of food waste and food loss

A circular economy is particularly pertinent for food waste and loss as nearly 1/3 of the worlds food is lost or wasted each year. This presents an enormous opportunity for a circular economy to better conserve and re-integrate these resources back into society. As it relates to a circular economy, food loss relates to the decline in food quality due to behaviors of participants throughout the value chain. This definition is very broad and can apply to any participant that may discard, throw away, or dispose of food without out re-entering the circular economy. Food waste is similar but is focused on the reduction of quality as it relates to retails, food preparers, and consumers. This can include waste associate with food that doesn’t confirm to optimal standards of size, food that is near the expiration date, or simply food that is left unused in kitchens and pantry’s in the homes of consumers (Haradhan, 2020).

e) How does Circular Economy play a rule in achieving the Sustainable Goals?

To mitigate food waste and food loss, circular economies play a very large rule in achieving sustainable goals. For example, the reduction of waste and loss allows more resources to be conserved. It therefore reduced the reliance on society of using more natural resources than it otherwise needs to. Likewise, it reduces societies dependance on these resources and the environmental destruction that occurs while gathering them (Mohajan, 2020).

III. Implications of circular economy on countries

a) The effect of circular economy for the countries. Economic, Environmental

From both an economic and environmental perspective a circular economy is large benefit. For one the circular economy allows for the creation of high paying renewable and sustainability jobs. Renewable energy investments alone will be in the trillions of dollars worldwide over the next 3 to 4 decades. These investments which include, wind, solar, hydro all require large amounts of capital investment which will come predominately from the private sector. In order to facilitate the completion of these projects, many jobs will be required in these fields. With larger job openings, society improves through higher salaries, wages, and wealth. Likewise, society benefits through a much more sustainable energy source the powers their respective economies. Sustainability operations will also undergo a similar transition. These jobs will include oversight commissions, research and development jobs, front line works, inspectors, and so forth. As the sector continues to grow so too will the economic benefits that are accrued to society. This ultimately improves the environment as more members of society adopt these initiatives within their everyday behaviors (Cong, 2021).

b) How does circular economy play in the prosperity of a country?

A circular economy plays into the prosperity of the country as its natural resources are persevered, lower the depletion rates of materials that are essential for the prosperity of the country. It addition, a circular economy can improve efficiencies’ within the country overall, which lowers waste and ultimately improves resource management. As noted above a circular economy also generates higher paying jobs that can be used to help sustain future economy growth.

c) Challenges that face the implementation of circular economy

Although the benefits of a circular economy are substantial, the ultimately challenge faced by the circular economy is that of adoption. Here the unwillingness of participants to engage in the behaviors required will ultimately undermine the integrity of the system. In addition, as noted above, the upfront capital requires needed to implement a circular economy are also substantial. Here, there must be both business, government, and consumer appetite to allocate capital to these initiatives over a prolonged period of time.

IV. Existing implementation of circular economy in the counties. Countries adopting circular economy. Companies’ adoption of circular economy

Circular economies have been proven to be successful as many countries particularly in Asia have successfully adopted these practices. South Korea, Singapore and Japan have adopted and implemented the circular economy approaches. A primary catalyst for their rapid adoption is the collectivistic nature of eastern society which is often diametrically opposed to that of western civilization which is more individualistic. Brands that have heavily adopted circular economy practices are IKEA which sells second hand furniture, Burger King which uses reusable packaging, and Adidas implement shoes that customers return once they are done using them (Li?Heng, 2020).

V. The Mena region implementation of Circular Economy. United Arab Emirates adopting a policy for Circular Economy Saudi Arabia initiative

The Mena region is dealing with continued instability and conflict, high youth unemployment, and a lack of positive economic reforms since the outbreak of COVID-19. To combat these issues the UAE and Saudi Arabia have engaged in a circular economy implementation initiative. Here the countries have experience prosperity due in part to their dependance on hard full of natural resources. Their petroleum-based resources have been very destructive to the environment are seeing much lower demand as the world transitions away from fossil fuels. As result, the economy is looking to engage in a circular economy by preserving the natural resource needs of its ballooning population. The UAE and Saudi Arabia are targeting sustainable manufacturing, infrastructure, transportation and food production in their initiative. They have also published an ambitious 10-year plan in which to reduce GHG emission and pollutants, become more competitive internationally, and create high paying green jobs for their workers.