Connect with us

Economy

How to solve Asia’s waste crisis

Published

on

If there’s one item that epitomizes our modern world, it’s plastic. It’s easy to make and use but does untold damage, especially in Asia where rivers, lakes and oceans are literally choking on it.

We are only now learning how pollution impacts the base of our food web and the oxygen-producing plankton (phytoplankton) in our oceans.  Phytoplankton use dissolved carbon dioxide (CO2) in our oceans to produce around 70% of our oxygen.  They singlehandedly remove a third of atmospheric CO2 in this way.

These very small creatures are sensitive to changes in their environment.  As oceans become more acidic, they will need time to adapt. A possible scenario is changes in dominant species, numerous extinctions and pollution in surviving fishing stocks. The worst-case scenario is a catastrophic disruption to the base of oceanic food web, which currently feeds 1.4 billion people.

With so much at stake, why is so much plastic and other waste finding its way into oceans? Perhaps because waste is, by its nature, someone else’s problem.

But it’s a problem that isn’t going away. Over two-thirds of humanity is expected to live in urban areas by 2050.  The challenge is to transition from our energy intensive, throw-away civilization to a circular economy where resource conservation and effective waste disposal are top priorities.

To start, we need to admit that not all waste can be recycled.  Some waste has an “end of life” at which point its disposal becomes urgent. Today, we have the technology not just to dispose of waste with minimal environmental impact, but to convert it into energy and other resources.

It wasn’t always that way. In the 1960s, the plastic bag probably ended up in a back-yard fire with highly toxic emissions.  In the 1970s, an incinerator would have processed it, still spewing toxic fumes and ash.  By the 2000s, many countries had opted for landfills with varying degrees of environmental controls.  Recycling often involved burning plastics in uncontrolled conditions similar to old incinerators.

Today, the aim is to recover, recycle and reuse as much waste as possible. Most waste can be recycled if properly separated. The rest can be treated using new technology with air emissions 25,000 times less toxic than old incinerators.  Most importantly, ash is captured, locked up and the pollutants stopped from entering waterways and oceans.

Japan is a world leader in waste-to-energy technology. These modern facilities emit just 20% of the current stringent Japanese emission standard.   This technology has been implemented in the People’s Republic of China (PRC) with ADB support over the last five years.

Ecoparks

Modern waste-to-energy mechanisms raise all sorts of possibilities. Ecoparks—industrial parks where businesses cooperate to reduce waste and turn byproducts into resources like energy—are transforming waste management.

Electricity, heat and steam can be shared among ecopark tenants to maximize resource recovery. Food waste, grey water, human septage, construction debris, medical and other waste can all be treated at ecoparks. We are supporting technologies to lock up pollutants and residues safely, stopping them reaching our oceans.

Ecoparks can shape consumer preferences for redesigned products and recyclable materials. Community based facilities in Spittelau, Austria and Ningbo in the PRC allow the public to see what happens to their waste. Manufacturers will respond to consumer preferences, especially as single use items attract more scrutiny.

As cities grow and recycling improves, smaller satellite ecoparks can treat organic materials and food waste, thereby curbing transport costs while keeping benefits like energy within the local area.

Digitization of waste

The waste revolution isn’t confined to ecoparks. Digital technologies now allow trading apps to link with geographic information systems to provide big data opportunities to reduce collection costs and aggregate specific wastes for recyclers.

Imagine what Uber did for taxis being applied to local waste collectors and traders. ADB is engaging with apps like www.soluhq.com where consumers can segregate and sell their waste. We are exploring linking such apps to our GIS platform. As well as promoting better environmental services, this creates opportunities for unbanked people to access online services like banking and insurance.

Digitized waste collection can also boost government finances. Resource recovery charges can be levied on products based on their “end of life” costs. Companies will redesign their products and packaging to avoid these costs, while further cutting waste generation and sparing our oceans.

Ecoparks and digital technologies also open channels for a regional approach to waste. Strategically located ecoparks at ports on busy sea-lanes, like the Enerkem facility in Rotterdam, can shorten supply chains for tradeable waste products.

Asia’s waste crisis is a chance to reframe the region’s growth. With the latest technologies and bold thinking, we can transition to a circular economy and save our oceans.

ADB

Continue Reading
Comments

Economy

On the Role of Sovereign Wealth Funds (SWFs) in Supporting a Green Recovery

Published

on

Perhaps one of the few areas where a consensus is crystallizing across the major powers of the global economy is on the urgency of advancing the green environmental agendas and reducing the carbon emissions. Global institutions such as the IMF are emphasizing the need for a green recovery to take hold in the world economy as the global community emerges from one of the starkest crises in the past century. The world’s sovereign wealth funds as a powerful force in international financial markets could play a vital role in advancing green projects as well as green finance. This is particularly relevant for Russia, where the National Wellbeing Fund could be partly invested into green financial instruments.

At this stage there is a number of global networks and initiatives that bring together the world’s largest institutional investors, including sovereign wealth funds, to drive the green investment agenda. These include European Long Term Investors, the Institutional Group on Climate Change and the Network on Climate Risk. Some of the wealth funds from the Middle East, including the Abu Dhabi Investment Authority, the Kuwait Investment Authority, the Qatar Investment Authority and the Public Investment Fund of Saudi Arabia, are signatories to the One Planet SWF Framework. The meeting held by the International Forum of Sovereign Wealth Funds in 2016 “participants highlighted that SWFs are particularly well-positioned to become trailblazers in green investment”.

Recent data and surveys reveal a growing integration of the green agenda into the decision-making and strategies of the world’s sovereign wealth funds. These were the findings of an inaugural survey of 34 sovereign wealth funds, representing 43% of the world’s sovereign funds, conducted in September by the International Forum of Sovereign Wealth Funds and the One Planet Sovereign Wealth Funds .

The survey reveals that climate-related strategies represent more than 10% of portfolios for 30% of responding wealth funds. The survey also found that these funds made 18 investments in agriculture technology, forestry and renewables opportunities in 2020 at a total value of $2 billion, up from eight investments valued at $324 million in 2015. Overall, according to the survey “sovereign wealth funds have invested more than $5 billion in agritech, forestry and renewables opportunities over the past five years as part of an increased push toward climate change-aware investing”.

Just over a third of responding funds (36%) have a formal climate-change strategy in place, with 55% of these funds adopting the policies since 2015 and 30% since 2018.

The survey came up with the following recommendations to wealth funds based on the survey findings:

· to adopt and implement climate-related strategies;

· to seek appropriate talent and expertise;

· to explore board member and executive education;

· to use metrics to show not only climate impact but also comparable returns and risk reduction;

· to communicate to all stakeholders the strategic importance of climate change;

· to partner with peers and international initiatives to share experience and generate greater leadership from within the wealth fund network.

The latter recommendation dovetails the recent Valdai Club initiative to enhance cooperation among the largest sovereign wealth funds against the backdrop of the Covid pandemic. In particular, in 2020 the Valdai Club together with Shafi Aldamer and Curran Flynn from King Fahd University of Oil and Minerals advanced the proposal to create a platform for the sovereign wealth funds (SWFs) of G20 countries to boost long-term cooperation, direct investments, and the formation of bilateral/trilateral/multilateral investment accords. The findings of this policy brief were included in the T20 communiqué, which encourages the G20 to promote “the creation of a platform that would bring together the sovereign wealth funds of its members, possibly in coordination with the International Forum of Sovereign Wealth Funds.”

Such a platform would encourage the G20 states to strengthen their economic cooperation, bolster mutual interests, improve multilateralism, and develop opportunities for their SWFs. Additionally, it would act as an emergency tool in easing the impact of a global crisis, such as the current COVID-19 pandemic, as it can be employed as an anti-crisis measure via the investments of the G20 states’ SWFs. One important venue of cooperation for such a platform for sovereign wealth funds could be the elaboration of green investing principles and benchmarks for the major sovereign wealth funds, which in turn would support the advancement of a green recovery in the global economy in the aftermath of the Covid pandemic.

As regards Russia’s sovereign wealth funds, most notably the National Wellbeing Fund (NWF), which by Q1 2021 has accumulated more than USD 180 bn in overall resources there may be a case for investing part of the liquid reserve into green instruments, including sovereign green bonds. In particular, the investment guidelines for the NWF may involve a formal target on the share of green assets in the Fund’s portfolio. These in turn may include corporate and sovereign green bonds from advanced economies as well as an allocation reserved for Russia’s corporate and sovereign green bonds. The latter would potentially deliver a significant boost to the development of Russia’s green bond market. Currently green bonds account for just 1.5% of total corporate bonds outstanding in Russia and the emergence of sizeable demand from Russia’s sovereign wealth fund would raise the potential growth for this very important market segment.

From our partner RIAC

Continue Reading

Economy

5 things you should know about the state of the global economy

Published

on

Is this the year we overcome the global economic crisis caused by the pandemic? Are our jobs in danger? Who has lost the most in the crisis and what can be done to recover? As the UN Department of Social and Economic Affairs (DESA) prepares to launch the mid-year update of the 2021 World Economic Situation and Prospects (WESP) report, here are five things you need to know about the state of the global economy.

1) US and China bounce back, but a slow recovery for developing countries 

While economic output in the United States and China is expected to grow robustly and lift global growth, many developing economies are not expected to return to pre-pandemic output levels anytime soon. The pandemic is far from over for most developing countries where vaccination is advancing slowly, and fiscal pressures have intensified.

2) The situation of the most vulnerable has become even more precarious

Lockdowns and social distancing measures resulted in large job losses in contact-intensive and labour-intensive service sectors, which predominantly employ women. The pandemic has also exposed the vulnerability of informal employment, which is the main source of jobs in many countries and which offers less job security, social protection and access to healthcare.

3) Global trade recovery is strong, particularly in Asia

Merchandise trade has already surpassed pre-pandemic levels, buoyed by strong demand for electrical and electronic equipment, personal protective equipment (PPE) and other manufactured goods. Trade in services remains constrained by restrictions on international travel. While exports from Asian economies have soared, exports from Africa, Western Asia, and the Commonwealth of Independent States has stalled.

4) The COVID-19 crisis has inflicted more harm on women and girls

This crisis disproportionately affected women, who suffered significant job and income losses, contributing to the worsening of gender poverty gaps. Burdened by increased home care duties, many girls and women gave up on schools, and the workforce altogether. Returning to school and work might take longer or may not happen at all for many of them, further widening gender gaps in education, income and wealth.

5) Countries need to do more to address the uneven impact of the COVID-19 crisis

There is an urgent need for countries to formulate better targeted and gender-sensitive policies to drive a more resilient and inclusive recovery from the crisis. Though on the frontlines of the pandemic, women have been under-represented in pandemic related decision-making and economic policy responses. The severe and disproportionate impact of the pandemic on women and girls call for more targeted policy and support measures for women and girls, not only to accelerate the recovery but also to ensure that the recovery is inclusive and resilient.

Continue Reading

Economy

Biden’s shift from neo-liberal economic model

Published

on

Mercantilism; which was the ‘Hall of Fame’ from 15th-18th Century had emerged from the decaying of feudal economic system in Europe.  It was initially started from the Mediterranean trade in bullion on the cities like Venice, Genoa and Pisa. In the course of history, this idea was challenged by the writings of John Lock’s Second Treatise of Government and A Letter Concerning Toleration with larger than life of Adam Smith’s, The Wealth of Nations of 1776—gave rise to Classical Liberalism. This idea also even started shaking during the 1930s followed by the Great Depression. The Keynesian economic model came to escape the consequences of this Great economic shortfall till 1970s. Afterwards, Neo-liberalism was the ‘lifeline of the global economy’. Soon, this also diminished from the rapid financialization and globalization process of 1990s. The financialization, which was the ‘Heart of the Town’ till 2008; devastated by the 2008 financial crisis. The US government rescued this crisis via Dodd-Frank Act and greater stimulus package to economy. And, lastly current COVID-19 pandemic crisis is much more powerful than that of 1930’s Great Depression or any other crisis in observable history. To cope of with this crisis, Biden administration is rescuing the economy with comprehensive stimulus package by challenging the internationally accepted  fundamental economic model.

Today, Keynesian economic model is taking shape in the US. The central theme of Keynesian theory —measured as the sum of the spending by households, business, and the government; which Biden is doing so by $640 billion housing plans over 10 years to provide affordable, safe housing for all individuals, by increasing tax for corporations and high-income filers by $3.3 trillion. In addition to this, he is creating massive government spending ($2trillion) on infrastructure for job creation, spending on public goods( health care, education, job, security, child care), and less interested in fiscal deficits and his more critical view on an unregulated market controlled by big corporations.  These steps of Biden correlated with that of the Keynesian economic model (the model which remained ‘talk of the town’ from WWII to the 1970s).  Following this, new Washington Consensus is born against the low levels of government spending, minimizing fiscal deficits, nonintervention, and deregulation in the market, and liberations of trade and foreign investment.  All these ‘values’ are undermined by the current Biden administration.

The world economy is in the same historical place as that of WWII followed by the great depression comparing today of the COVID-19 pandemic. So, whenever there is an unprecedented shock on capitalism; it has always transformed itself within. From the Mercantilism(16th-18th Century), Classical liberalism, Keynesian/ neoliberalism, and financialization–capitalism has survived astonishingly. This new ‘Bidenomics’ will behave as an influential replica in the other parts of the world as the land, labor, capital, and productivity is impacted immensely by the COVID-19 pandemic. This succeeding market intervention by the US government could replicate in other international liberalism followers nations of the world. The era of government-led intervention in the market started.

Continue Reading

Publications

Latest

Trending