Over a period of time India has experienced considerable economic growth, if this trend continues the country could become one of the four biggest economies worldwide in time to come. Yet this positive indicator does not come without serious questions and the nation is still facing challenges related to rapid urbanisation, resource scarcity and a large part of the population living below the poverty threshold. In an interconnected world predicated largely on a linear 'take, make and dispose' economic model, the upcoming Indian powerhouse could embark on an industrialisation path comparable, albeit faster to that of mature markets with the associated negative externalities it entails.
But
this scenario is not inevitable, and with its young population and nascent
manufacturing sector, the country is in a position to make systemic choices and
bend the road ahead. Here, a digitally-enabled circular model of development
provide some of the answers to the most pressing questions that India faces
today. India is now the second largest market for smart phones, having
surpassed the US. The country is embracing the digital revolution, one which guided
by circular principles and enablers such as asset tracking and sharing, can
yield significant benefits as highlighted by a study produced last spring by world economic forum and EMF, moreover several building blocks of circularity are deeply ingrained in Indian habits as
exemplified by the high rates of utilisation and repair of vehicles and the
distributed recovery and recycling of materials post use. Though handled
informally, these activities provide the only source of livelihoods to some of
the poorest populations. Now, by turning these existing trends into core
development strategies, India could generate significant economic savings,
massively cut down on carbon emissions, not a mere detail for a country which
has recently ratified the Paris climate agreement and deliver better prospects
for its citizen.
Economic
gains in a low carbon system
Building
on the work carried out to map the circular economy opportunity for Europe, EMF
supported by Climate Works, with UNCTAD as a knowledge partner has analysed the
potential of circularity applied to three focus areas of the Indian economy,
cities and construction, food and agriculture, and mobility and vehicle
manufacturing.
Household
expenditure in these three combined areas represents more than two thirds of that
of the average Indian household both in urban and rural areas. They cover the
two largest industrial sectors in terms of employment (agriculture and
construction) and highest growth expectations (construction and vehicle
manufacturing). Findings of this study are compelling, adopting a circular
economy pathway would yield annual benefits of INR 40 lakh crore ($624 billion)
by 2050 compared with the current development path equivalent to 30% of India’s
current GDP.
In
addition to creating cost savings for businesses and households, a circular
transition would reduce negative externalities. Greenhouse gas emissions would
be 44% lower by 2050 compared to the current scenario and congestion and pollution
would fall significantly leading to health and economic benefits to Indians.
Extractive
to regenerative
What
could it look like, taking the example of food and agriculture, digitally enabled
precision farming coupled with equipment sharing platforms and regenerative
practices that return nutrients to the soil would have multiple positive
outcomes as reduction of costs for farmers, real time knowledge sharing for
faster dissemination of best practices and most importantly, reduction of input
requirements like fertilisers and water, a crucial resource since according to
the world resources institute demand could exceed supply as soon as 2030.
Regenerative
agriculture is already gaining momentum in India. Organisations like Inora, Kalpavruksha Farm, Organic India and Govardhan Ecovillage are
applying such practices at different scales and report increasing yields,
health, and income. Farmers in some of India’s poorest regions are recording
unprecedented rice yields thanks to regenerative practices. The northeastern
state of Sikkim is now growing 100% organically after spending some 13 years
converting 75,000 hectares of land to organic agriculture. The effort has increased
farmer’s income by 20% and avoided the deterioration of human health and
degradation of the environment that other food producing states are
experiencing.
The
advantages highlighted combine net resource savings for industry, representing
the bulk of the benefits highlighted above and better outcomes for customers
and citizen. Model integrated transport system including strategies for repair,
re-manufacturing, and recycling of vehicles would notably reduce energy
consumption 32% by 2030 whilst helping to move towards mobility for all. For construction
sector, choices made today are set to have a colossal impact considering that
70% of the building stock that will be used in 2030 is yet to be built, given
that construction is set to become the largest consumer of raw materials in India
by 2020, moving to modular practices and careful materials choice editing would
help contain the negative externalities (landfill, emissions from virgin
materials production) that are bound to skyrocket as demand soars.
Now
the question arises, will India upgrade directly to the fourth industrial
revolution and move to a contemporary model of regenerative and restorative
growth, by design, that builds economic and natural capital rather than rely
primarily on the consumption of finite resources as moving to more circular
economic models promises a much brighter future for the economy. It would allow
us to rise to the current and future challenges of global pressure on resources
and rising insecurity of supply. Pumping resources back into productive use
again and again, cutting waste and reducing dependence on uncertain supplies is
a direct route to improving resilience and competitiveness. It offers the
prospect of sustainable growth that will last stepping up efforts to increase
resource productivity will go hand in hand with existing objectives of policies
such as reducing greenhouse gas emissions, increasing energy efficiency,
sustainable re-industrialization of the economy and securing access to raw
materials whilst reducing environmental impacts.
Talking about circular economy in India, there
is a wide range of proven measures to promote resource efficiency that have
shown pay offs and the potential to be applied on a more systematic basis.
India must ensure that these changes must be undertaken in particular and rethink growth for long term prosperity.
