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  • Davide Bonesi

Circular Economy and International Trade: Opportunities & Challenges for South Asia-WCEF2022 Event

The efforts undertaken by the entire world to decrease greenhouse gas (GHG) emissions have been influenced by the actions of emerging economies. Among them, a huge role is played by South East Asian countries, which are living through a period of rapid economic growth. As is common in such periods, increased production and global trade can increase the carbon footprint of these nations on the planet. With this regard, governments and experts have been discussing how to accelerate the circular economy transition in these countries. In fact, with the entire world aiming at reducing emissions, the question for ASEAN countries is not whether to adhere to circular and sustainable practices, but how fast adherence can be enabled. One of the major challenges related to the transition is the management of plastics. This material is difficult to include in circular practices, and South Asian countries are trying to cope with it.

To foster a discussion on circular economy and international trade in South Asia, Circular Innovation Lab hosted a World Circular Economy Forum (WCEF) 2022 side event together with co-hosts Chatham House and the United Nations Conference on Trade and Development (UNCTAD) and knowledge partners the International Trade Centre (ITC) and the European Environmental Bureau (EEB). The event was titled: “Circular Economy and International Trade: Opportunities and Challenges for South Asia,” and took place on November 10 2022. The two sessions composing the event focused on different but related topics. The first session addressed plastic value chains with experiences from plastic experts on the ground. The second session focused on the regional dynamics regarding circular trade in South Asia and how policies can promote the future of trade.

Starting with the first session, Ms. Karla Baldwin, Planning and Logistics Director at Plastic Bank, was the first speaker. She highlighted the major challenges in the collection, sorting, and preparation of plastic waste for recyclers. The main issue arises from the lack of sorting in household waste, while another relevant challenge is the mismatch of the system. The latter means that some recyclers prefer not to have the waste materials sorted or cleaned since they have the capacity to do it themselves. By doing so, they obtain higher revenues due to reduced outsourcing of other treatment processes. Hence, if they handle the sorting themselves, they benefit financially due to the presence of other materials that can be reused or sold.

The second speaker was Mr. Anuar Abdullah, founder of Ocean Quest Global. Dealing with the preservation and restoration of coral reefs in South Asia, Mr. Abdullah raised awareness about the 60 million tonnes of fishing gear per year, mostly made from plastic, that are typically discarded in the ocean and on coral reefs. Moreover, he evidenced the presence of garbage patches, which are blocking the light from reaching the coral, further degrading coral reefs until they die off. In order to deal with this problem, clean-up activities alone are futile. In fact, they gather less than 0.1 per cent of the waste that is present. Besides cleaning the ocean, he continued, prevention was identified as the preferred alternative. The latter could be reached by educating the fishing industry and preventing plastic waste from ending up in the ocean in the first place.

Following this contribution, Mr. Zaki Saleemi, Vice President of Crescent Bahuman in Pakistan, addressed the problem of polyester in the manufacture of blue jeans. Although the inclusion of polyester fibers represents just five per cent in jeans, Mr. Saleemi stressed that those small percentages of polyester impact the rest of the fabric tremendously and create major issues for recycling processes. In fact, any iteration of polyester is basically not recyclable by current mechanical recycling methods. He concluded by saying that although no efficient alternatives to polyester currently exist and consumer demand insists on these designs, there are efforts by manufacturers in the hope of cutting the reliance on polyester and making the products more recyclable once again.

Different from the first session, the second session focused on regional dynamics regarding circular trade in South Asia. The first panellist was Ms. Latifahaida Abdul Latif, an international trade negotiator specialising in the financial sector and assistant director responsible for the analysis and monitoring of finance and socioeconomic issues at the ASEAN Secretariat. In her contribution, she addressed the growing momentum of sustainability initiatives gaining traction in the ASEAN region. Indeed, she emphasized, an increasing number of initiatives, currently totalling 67, have been put in place to assist businesses in the transition, as a lack of support has been identified as one of the major issues in the transition to a circular economy. These initiatives were aimed at reducing emissions from the most polluting sectors, such as agriculture, transport, and energy. Despite the ASEAN countries' efforts, Ms. Latif pointed out that the circular economy transition is very diverse across them, so creating transparency and mutual understanding is critical before beginning regional harmonisation.

The second speaker of the second session was Mr. James Baker, a Senior Circular Economy Specialist at the Asian Development Bank. In his contribution, he stressed how the Chinese change in legislation regarding waste imports and plastic waste changed the perception of both waste and materials. He pointed out that the definition of waste is an interesting opportunity to look into with regard to the framework. In particular, what matters is when that definition will change into something circular. He went on to say that standardization and definitions could promote free trade. At the same time, it can reduce waste crime by improving cooperation with recyclers and aggregators. Moreover, it allows circular trade to operate more successfully.

Following this contribution, Dr. Divya Datt, an environmental economist responsible for developing and managing the UNEP program portfolio in India, was introduced as the next speaker. She stressed the recent actions of the Indian government regarding circularity. By introducing circular economic initiatives, the government is trying to develop a roadmap for the transition from a linear economic model to a circular one. Eleven focus areas, including agricultural waste and municipal solid waste, were identified to drive the circular transition. Moreover, she stressed the launch of the `Lifestyle for the Environment- LiFE Movement,` a program aimed at triggering a behavioral change and introducing a circularly motivated mindset on the consumer side.

Ms. Apoorva Arya, Founder and CEO of Circular Innovation Lab, concluded the event with some last remarks. She pointed out the need for technologies to be inclusive and the opportunity for traceability to enable circular trade. She also mentioned how regional collaboration and efforts can enable circular trade by establishing a common ground and standard harmonisation.

Highlighting opportunities and challenges in plastics management and regional policy dynamics, this WCEF 2022 side event provided an in-depth understanding of the situation actors are experiencing from a circular economic point of view. While the challenges are diverse and complex to manage, actors have shown a willingness to change this trend and make international trade more circular. In doing so, there is a need for coming together and harmonizing practices and definitions, as no one actor can solve the problem on their own.

To learn more about the main insights and key takeaways from the event, read the full event report here.


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