The circular economy is a better economy for all of us

A circular economy is an economy that conserves inputs. Waste is minimized and resources are reused instead of being disposed of as waste after first use. The goal is to break the linear link between economic growth and natural resource use so that our global economy is not tied to environmental destruction.

The current economy is a linear system with the characteristics that raw materials are taken from nature, made into products and then thrown away after use. The TH economy considers all stages of the supply chain to be able to use the least resources in the first place, circulate the resources as long as possible, use the maximum value of the resources, and recover them at the same time. and regenerate the product at the end of its useful life. This new understanding calls for durable product design that is easy to dismantle and recycle.

The Theosophical Economy is based on three main principles, as explained by the Ellen MacArthur Foundation, one of the main organizations promoting this economic model around the world:

Waste and Pollution Removal Design: In linear economics, waste management approaches focus on end-of-life disposal scenarios. An expired product will be replaced with a newer product and become waste. Instead of designing products to be disposed of at the end of their life, they should be turned into resources and materials that can be recovered and returned to use in the physical cycle. By changing the mindset that waste is viewed as an error in the design and exploitation of materials and technologies, waste and pollution can be ensured.

Keeping products and materials in use for as long as possible: Some products and components can be designed so that they can be reused, repaired, and remanufactured. But making things last longer is only part of the solution, which needs to be able to use resources to get them back into the system without being buried. This is especially relevant for short-lived materials and resources such as food and packaging, which can generate large amounts of waste without proper resource recovery processes.

Regeneration of natural systems: In nature, there is no concept of waste, everything is cyclical. All great natural cycles like: carbon, oxygen, nitrogen, water… work in closed loops with little or no resource loss in their cycle. The Theosophical Economy aims to mimic these natural cycles, creating an economic model that protects, supports, and actively improves our environment. This applies especially to organic materials, which have long been treated as waste in the linear economy, not only wasting the water and energy used for treatment, but also creating negative impact on the environment due to the decomposition of organic materials. By returning valuable nutrients to soil and other ecosystems rather than sending it to landfill, we can enhance our natural resources.

There are three ways to move towards the mainstream economy: (1) Consuming less, for the consumer, this means choosing versions of products that have been produced in more sustainable ways or can be recycled. processing; (2) Better consumption, which means avoiding outright buying but switching to cyclical models such as sharing platforms or using online communication services; (3) Make systematic change so that the whole economy is built on a salvage model.

Policies should be in place to encourage or require the use of secondary or recycled materials, for example by levying taxes on products using only natural materials. At the same time, large investments in infrastructure must be made so that recycling can be expanded or even mandated. As the Government introduces more and more policies to encourage recycling and reuse, and as consumers’ awareness of sustainability continues to increase, companies adopting the B-economy model are clearly realizing the benefits. its business position.

There should be a reasonable incentive mechanism to support the transition to the CARD economy

Over the past few years, the concept of a CSO has gained popularity as it is seen as a solution to address concerns about increasing global pressure on resources as well as to reconcile economic growth goals. and protect the environment. The potential economic benefits arising from the use of less energy and raw materials have attracted the interest of businesses around the world. In many cases, business interests are fueled by commercial opportunities created by disruptive new business models, such as product and service sharing.

However, the transition to the basic economy is not easy. Both businesses and financial institutions face difficult barriers in finding capital for their own economic projects. Risks to businesses, especially to businesses

The main challenge when transitioning to a knowledge-based economy is the ability to perceive and properly assess risks. Therefore, the Government needs to take various measures to accelerate this transition, especially the need to issue incentive mechanisms to support businesses to engage in circular practices. Incentives are often opportunities related to addressing barriers to the implementation of the CCA, either systemic or sector-specific.

According to the policy of the European Union (EU), the measures to encourage the private economy are divided into the following main categories:

Technology promotion aims to speed up the development of various technological innovations and solutions for the knowledge economy.

Encourage education to increase knowledge and awareness about resource efficiency and ECO, the need and benefits of a cyclical rather than a linear approach to production and consumption.

Social incentives aim to engage consumers and society at large in a circular economy. Various campaigns and awareness tools can be used to engage more consumers in repairing and reusing products.

Encourage the law to promulgate regulations related to the implementation of knowledge-based accounting. Examples include eco-design, extended producer responsibility, green public procurement.

Institutional incentives include policy measures, strategies, and roadmaps to promote the implementation of the market economy.

Encourage the creation of markets for secondary raw materials, repaired, reused and remanufactured products.

Fiscal incentives such as taxes, subsidies, grants, and internalization of external costs. Substances that are harmful to the environment should first be identified and eliminated.

Encourage industry arrangements to facilitate collaboration and symbiotic relationships in circular business. Facilitating and activating cooperation in the value chain is necessary to align the interests of partners.

There are positive incentives, such as discounts on secondary products, tax breaks; At the same time, there are negative incentives, such as fines for polluting acts, and payment of “polluters must pay” fees. The majority of incentives for the implementation of FI are positive, however some incentives include both positive and negative aspects, for example escrow schemes for the collection of waste products may be voluntary but If you do not participate, there will be an increased tax on the product.

Accelerating the transition to a market economy requires cautious but decisive measures to direct financial resources towards more sustainable production and consumption. In 2017, the European Commission established The Circular Economy Finance Support Platform, which aims to strengthen linkages between existing instruments and enable the development of new financial instrument for projects to transition to a circular economy. The platform is attended by representatives from the European Commission, European Investment Banks (EIBs), National Development Banks (NPBIs), institutional investors and other stakeholders. , and support from a team of consultants. The concept of GSO refers to a financial instrument in which investments will be exclusively applied to finance or refinance, in whole or in part, to newly joined eligible companies or projects. or are making the transition to a circular economy.

In addition, the European Commission also encourages the wider application of economic tools, such as guarantees for small and medium enterprises, mobilizing private financial resources to support the TH economy, environmental tax incentives. market, allowing member countries to use value added tax (VAT) rates to promote economic activities aimed at the end consumer, especially repair services. Examples of incentives include: (1) Higher prices for manufactured products that are harmful to the environment; (2) Support to increase financial benefits for companies that use resources sustainably and efficiently.

China has implemented tax incentives to promote the economy by reducing the financial burden on enterprises that recycle resources in the production process. Starting in 2009, the Chinese Government has introduced various forms of value-added tax incentives for the reuse of ordinary waste. The Ministry of Finance and the State Administration of Taxation of China have issued the “List of Value-Added Tax Incentives for Labor Products and Services Related to the Efficient Use of Resources” to provide a A complete list of goods and products that support reuse and recycling across industries. Building on previous policies of refunds for recyclable materials, China’s 2015 value-added tax policy created tax incentives for many areas of change in the way of doing business in the chain supply and pour

Doctor. Le Hoang Lan

1. Teuvo Uusitalo, Elina Huttunen-Saarivirta, Jyri Hanski, Maria Lima-Toivanen, Jouko Myllyoja, Pasi Valkokari (2020) – Policy Instruments and Incentives for Circular Economy. Final report
2. EU Circular Economy Action Plan 2020
3. Ellen Macarthur Foundation (2020)- Financing the circular economy. Capturing the opportunity
4. World Business Council for Sustainable Development (2019) – Policy Enablers to accelerate the circular economy

Reference: http://tapchimoitruong.vn/dien-dan–trao-doi-21/kinh-te-tuan-hoan-va-co-che-khuyen-khich-chuyen-doi-sang-nen-kinh-te-tuan-hoan-25558