DECEMBER 30 — As the world struggles to deal with rising greenhouse gas, GHG, emissions, a new economic model has generated much interest. The circular economy model is seen as the antidote. The traditional linear economic model has been widely criticised for its unsustainable production and consumption practices. That throw away economic model may be good for business in the short term but will prove suicidal in the long term. The model accelerates resource depletion eventually killing business and the economy. The circular economy is basically about reducing the wanton wastage of precious resources such as energy, water, and raw materials. It is about delivering NetZero.
Countries worldwide have launched attempts to embrace the circular economy. Effective implementation has been difficult. Not many countries have seen success. Many agree circular economy plans often face challenges in implementation due to several interlinked factors. Top of the list is the high initial costs and financial barriers. Setting up circular economy systems often requires significant initial investments in new technologies, infrastructure, and research, which can be prohibitive, especially for smaller companies. The financial benefits of circular practices often accrue over time, which can be discouraging for stakeholders seeking quick returns. This explains the resistance by business.
Next has to do with the lack of consumer awareness and demand. Many consumers are either unaware of circular economy products or have misconceptions about them, assuming they are lower quality or more expensive. Without sufficient demand, businesses may hesitate to invest in circular models, leading to a vicious cycle of low supply and low demand. This is the reason why a common prescription given to catalyse the circular economy practices is public education. Technological and infrastructure limitations have also been blamed. The circular economy depends heavily on advanced recycling, re-manufacturing, and upcycling processes, which require sophisticated infrastructure and technology. In many regions, the required infrastructure simply does not exist or is not robust enough to support closed-loop systems.
Then there is the issue related to inconsistent regulations and standards. Circular economy initiatives thrive under supportive policies and consistent standards. However, regulations vary widely across countries and even within regions, leading to fragmented efforts that struggle to scale effectively. Enforcement is also challenging. This is further exacerbated by the lack of incentives and subsidies. While circular economy models are often more sustainable in the long run, they may not be financially competitive with traditional models without policy support. Governments that don’t provide sufficient incentives, subsidies, or tax breaks for circular practices unintentionally discourage businesses from adopting these models.
Supply chain and design challenges also exist. Shifting to a circular economy requires changes at multiple points in the supply chain, from sourcing and production to end-of-life product design. Designing products for durability, repairability, and recyclability requires substantial changes in manufacturing processes and mindsets, which can be complex and costly. But admittedly, the most difficult is dealing with cultural and behavioural barriers. Linear economic models are deeply embedded in societal norms, and transitioning to circular models requires a significant cultural shift. Consumer habits, business models, and even government approaches need realignment, which takes time and faces resistance from stakeholders accustomed to linear processes.
Other no less important factors concern the data and measurement issues. Tracking and measuring circular economy impacts, such as material flows, waste reduction, and resource recovery rates, is challenging. Without accurate data, it is difficult to assess the success of circular initiatives or make adjustments, which can erode confidence in these programs. For circular economy plans to succeed, addressing these systemic issues with targeted interventions — like increased public awareness, financial support mechanisms, robust policy frameworks, and technological advancements — is essential.
Malaysia is among countries which have long decided to embrace the circular economy model. Such intentions are clearly articulated in the country’s 12 th Malaysia Plan. The different sectors of the economy have also launched their own circular economy blueprints. Execution has always been challenging. A recent decision to integrate all such plans into a common umbrella framework is seen as the way forward. Experts believe the absence of a robust ecosystem and a circular economy driver very much explain the lack of inertia. The integrated framework under development must seriously consider ways to close such gaps.
* The author is an Associate Fellow at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya, and may be reached at [email protected]
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
