Connect with us

Economy

Circular Economy Creates Jobs and Can Save Up to $1 Trillion a Year

Published

on

Conceptualized some 50 years ago, the idea of circular growth is finally becoming embedded in a number of companies and even in cities like Atlanta in the United States, participants at the eighth Annual Meeting of the New Champions in Tianjin, China, were told.

It works by decoupling growth and resource needs, and advocates a job-creating model where industrial systems are restorative by design. Products, components, untapped resources and materials are fed back into the appropriate value chains, while sustaining economic growth.

The concept is being applied in the Atlanta BeltLine, a $325 million privately funded project to revitalize a 22-mile historic rail corridor that circles the city. When completed, the facility will connect 43 neighbourhoods through pedestrian-friendly rail transit and multi-use trails, 1,300 acres of parks, 1,100 acres of cleaned up industrial land and affordable housing.

“Mayors have the gift of speed,” said Kasim Reed, Mayor of Atlanta, USA. “You can have mayors in cities to buy-in and execute in much faster fashion that any national government you can think of, except maybe for China.” If the Atlanta BeltLine is a success, it can be an example and an exemplar for other cities to emulate.

The Chinese government has actually embedded circular growth in its five-year plan, said Zhu Dajian, Professor and Director, Institute of Governance for Sustainability, Tongji University, People’s Republic of China. But the projects are still more at the level of recycling waste and lean manufacturing, not at the higher level of rethinking business models to focus on delivering services rather than making products that eventually clog up landfills.

One company that has reached that level is Royal DSM, which has developed a new solar panel coating material that generates more energy than current coatings. Instead of making new solar panels, however, the company is re-coating existing panels made by other companies.

“If we go in a green way and use solar panels, economic growth is great,” said Feike Sijbesma, Chief Executive Officer and Chairman of the Managing Board, Royal DSM, Netherlands. “The sun will not stop shining. If you grow at the expense of future generations, we should rethink economic growth.” The linear model of economic growth, where resources are dug up, used and then disposed will not work in a world with 8 billion people.

Beermaker SABMiller is also reaping the benefits of a cradle-to-cradle (as opposed to cradle-to-grave) business model. It uses and reuses its bottles numerous times in Europe, saving millions of dollars in the process. It is also making use of its waste water to generate energy.

The ultimate goal is to adopt circular growth not only in the business but also the entire value chain, including suppliers and retailers, said Andrew Wales, Senior Vice-President, Sustainable Development, SABMiller, United Kingdom. “There is huge opportunity in reducing waste in food, water and energy. The waste in the system is still so large.”

By 2030, the world’s population is expected reach over 8 billion, including 3 billion new middle-class consumers. The challenges of expanding resource supply to meet future demand are unprecedented. The current “take-make-dispose” approach results in massive waste. A potential remedy is the circular economy, an opportunity to reduce material costs that can amount to a saving of $1 trillion a year by 2025.

This year, the World Economic Forum, in collaboration with the Ellen MacArthur Foundation, launched a new report, Towards the Circular Economy, which analysed the economic benefits for businesses shifting towards a circular economy. It also highlighted a new Forum initiative, Project Mainstream, which could help businesses to shift towards a circular economy and as a result save $500 million in materials and prevent 100 million tonnes of waste globally.

Continue Reading
Comments

Economy

Belarus: Strengthening Foundations for Sustainable Recovery

MD Staff

Published

on

The speed of economic recovery has accelerated in early 2018, but the foundations for solid growth need to be strengthened, says the latest World Bank Economic Update on Belarus.

The economic outlook remains challenging due to external financing needs and unaddressed domestic structural bottlenecks. Improved household consumption and investment activity, along with a gradual increase in exports, will help the economy to grow, but unlikely above three percent per annum over the medium term.

“The only way for ordinary Belarusians to have better incomes in the long run is to increase productivity, which requires structural change. While macroeconomic adjustment has brought stability, only structural change will bring solid growth to the country,” said Alex Kremer, World Bank Country Manager for Belarus. “Inflation has hit a record low in Belarus, driving the costs of domestic borrowing down. However, real wages are now again outpacing productivity, with the risks of worsening cost competitiveness and generating cost-push inflation.”

A Special Topic Note of the World Bank Economic Update follows the findings of the latest World Bank report, The Changing Wealth of Nations 2018, which measures national wealth, composed of produced, natural, and human capital, and net foreign assets. Economic development comes from a country’s wealth, especially from human capital – skills and knowledge.

“Belarus has a good composition of wealth for an upper middle-income country. The per capita level of human capital exceeds both Moldova and Ukraine. However, the accumulation of physical capital has coincided with a deterioration in the country’s net foreign asset position,” noted Kiryl Haiduk, World Bank Economist. “Belarus needs to rely less on foreign borrowing and strengthen the domestic financial system, export more, and strengthen economic institutions that improve the efficiency of available physical and human capital.”

Since the Republic of Belarus joined the World Bank in 1992, lending commitments to the country have totaled US$1.7 billion. In addition, grant financing totaling US$31 million has been provided, including to programs involving civil society partners. The active investment lending portfolio financed by the World Bank in Belarus includes eight operations totaling US$790 million.

Continue Reading

Economy

Economic Growth in Africa Rebounds, But Not Fast Enough

MD Staff

Published

on

Sub-Saharan Africa’s growth is projected to reach 3.1 percent in 2018, and to average 3.6 percent in 2019–20, says Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, released today.

The growth forecasts are premised on expectations that oil and metals prices will remain stable, and that governments in the region will implement reforms to address macroeconomic imbalances and boost investment.

“Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” said Albert G. Zeufack, World Bank Chief Economist for the Africa Region. “African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth.”

The moderate pace of economic expansion reflects the gradual pick-up in growth in the region’s three largest economies, Nigeria, Angola and South Africa. Elsewhere, economic activity will pick up in some metals exporters, as mining production and investment rise. Among non-resource intensive countries, solid growth, supported by infrastructure investment, will continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal. Growth prospects have strengthened in most of East Africa, owing to improving agriculture sector growth following droughts and a rebound in private sector credit growth; in Ethiopia, growth will remain high, as government-led infrastructure investment continues.

For many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production,” said Punam Chuhan-Pole, World Bank Lead Economist and the author of the report.  “This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda.”

Public debt relative to GDP is rising in the region, and the composition of debt has changed, as countries have shifted away from traditional concessional sources of financing toward more market-based ones. Higher debt burdens and the increasing exposure to market risks raise concerns about debt sustainability: 18 countries were classified at high-risk of debt distress in March 2018, compared with eight in 2013.

“By fully embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate growth,” said Zeufack.

This issue of Africa’s Pulse has a special focus on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications of achieving inclusive economic growth and poverty reduction. The report finds that achieving universal electrification in Sub-Saharan Africa will require a combination of solutions involving the national grid, as well as “mini-grids” and “micro-grids” serving small concentrations of electricity users, and off-grid home-scale systems. Improving regulation of the electricity sector and better management of utilities remain key to success.

Continue Reading

Economy

Multilateral Development Banks Present Study on Technology’s Impact on Jobs

MD Staff

Published

on

Rapid technological progress provides a golden opportunity for emerging and developing economies to grow faster and attain higher levels of prosperity. However, some disruptive technologies could displace human labor, widen income inequality, and contribute to greater informality in the workforce. Tapping new technologies in a way that maximizes benefits, mitigates adverse effects, and shares benefits among all citizens will require public-private cooperation and smart public policy.

That is one of the main conclusions of a new study, The Future of Work: Regional Perspectives, released today by four regional multilateral development institutions: the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB).

The study, which was presented at a seminar hosted 19 April at the IDB in Washington, D.C., explores the potential impact of technology in global labor markets and identifies concrete actions countries can take to prepare for the changing nature of jobs and leverage the benefits of emerging technologies.

The Future of Work: Regional Perspectives analyzes the challenges and opportunities presented by artificial intelligence, machine learning, and robotics in what is known as the Fourth Industrial Revolution. Potential challenges include increased inequality and the elimination of jobs, as well as the high degree of uncertainty brought about by technological change and automation. The greatest opportunities come from gains in economic growth that can result from increased productivity, efficiency, and lower operating costs.

The study includes chapters focusing on how new technological developments already are affecting labor markets in each region.

In the case of Asia and the Pacific, ADB research shows that even in the face of advances in areas such as robotics and artificial intelligence, there are compelling reasons to be optimistic about the region’s job prospects. New technologies often automate only some tasks of a job, not the whole. Moreover, job automation goes ahead only where it is both technically and economically feasible. Perhaps most importantly, rising demand—itself the result of the productivity benefits that new technologies bring—offsets job displacement driven by automation and contributes to the creation of new professions.

“ADB’s research shows that countries in Asia will fare well as new technology is introduced into the workplace, improving productivity, lowering production costs, and raising demand,” said Yasuyuki Sawada, ADB’s Chief Economist. “To ensure that everyone can benefit from new technologies, policymakers will need to pursue education reforms that promote lifelong learning, maintain labor market flexibility, strengthen social protection systems, and reduce income inequality.”

The publication was launched with a panel discussion featuring senior officials of the four regional development banks leading the study: Luis Alberto Moreno (IDB President), Charles O. Boamah (AfDB Senior Vice-President), Takehiko Nakao (ADB President), and Suma Chakrabarti (EBRD President). They were joined by Susan Lund (Lead of the McKinsey Global Institute) and Pagés, one of the co-authors.

Continue Reading

Latest

Newsletter

Trending

Copyright © 2018 Modern Diplomacy