Nearly 25,000 tons of solid waste are generated daily in Dhaka, one of the most densely populated cities in the world. In contrast, the fate of these wastes is being sealed in the landfills of Matuail and Aminbazar; a huge quantity often needs to be collected for days in various city locations, making Dhaka uninhabitable. As one of the leading exporters of RMG products, the country produces 5.77 lakh tons of textile waste annually. The Government of Bangladesh has launched the Smart Bangladesh campaign, and one of the four pillars of the announced vision is Smart Economy. This article looks into different practices by businesses and governments worldwide. Bangladesh can draw inspiration from such cases to build smart cities and villages, and a circular economy drives an overall smart economy.
Bangladesh needs a stronger waste collection and management system based on a linear economy. We take from our scarce resources to make products and dispose of them after using them. This linear path of ‘take, make and dispose of’ (referred to as linear economy) generates a massive quantity of waste which goes to landfills. However, the living world has no landfills. Instead, living elements flow circularly. They grow, live, die, return to the soil and again grow in a different form. Such circularity has allowed our environment to be sustained since its onset. Drawing inspiration from nature, the same model of circularity can be emulated in our economy. We can make, use, and return products from the throwaway and replace culture to their owners. A circular economy is beyond recycling (destroying the waste and creating something new) and upcycling (taking the waste and making something new from it in its current state). Circular economy redefines the idea of ownership, sharing and trust.
Products or materials can be divided into technical and biological cycles. The technical cycle involves any material that is not biodegradable, such as plastic products, bottles, shampoo sachets, mobile phones, etc. After use, these non-biodegradable products remain in landfills forever until they are burned, destroying the environment. In contrast, the biological cycle consists of products that can easily return to earth and regenerate, such as food, wood, etc. However, these biological materials are often amalgamated with technical products. For instance, even though cotton is biodegradable, the poly cotton used in the fashion industry is not.
As we reach the tipping point of an unsustainable product design and waste management system, we must rethink how we have approached making products and living on the planet. Many companies and governments all across the globe have already joined the bandwagon of circular economy. Corporations and government agencies deploy different business models and sustainability practices to build a circular economy.
What if the corporate offices in Dhaka no longer have to purchase their light bulbs? Instead, they could simply lease them from the manufacturers. Signify (formerly Philips Lighting), a company that traditionally manufactured and sold light bulbs now leases lighting equipment to companies by entering into a contract. Neither public sector nor commercial customers have to purchase light bulbs; instead, they can purchase light. As per the company’s ‘Lighting-as-a-Service’ (LaaS) model, Signify owns the lighting system and instils, operates and maintains the lighting equipment in their customer’s premises in exchange for a fee. Through circularity as a model, the capital expense of buying equipment can be replaced by monthly payments for service or performance. As bulbs are non-biodegradable, Signify designs them to be easily repaired, replaced, reused and recycled, increasing product life.
In the circular economy, companies can redefine the past notion of ownership and emerge as service providers while retaining the ownership of their products. This is called a performance economy. Bangladesh has a growing consumer electronics market where we manufacture products such as refrigerators and air conditioners. The same principles of circularity as a service can be applied to the consumer electronics market, making these expensive products more affordable to low-income and middle-income consumers.
Buildings can only run on three core utilities: power, water, and air. Customers do not have to invest in the infrastructure for power and water. Thus, there is no capital or operational expenditure to get power and water. Suppose you live in an area under the Dhaka North City Corporation. In that case, the Dhaka Electric Supply Company Limited (DESCO) supplies electricity directly to your home by investing in and operating infrastructure. For water, Dhaka Water Supply and Sewerage Authority (WASA) supplies water to your taps. At the end of each month, you receive a bill. But when it comes to air, you must invest in the infrastructure by purchasing an air conditioner and operating and maintaining it at your own cost. A Singapore-based company, Kaer has adopted the ‘Cooling-as-a-Service’ (CaaS) business model where Kaer asks the building owners for their requirements and the company designs, installs and operates the air conditioning system in the building for a fee. Kaer has also implemented such an approach in India, which makes us optimistic regarding the replicability of the model in Bangladesh.
Alongside the performance economy, the sharing economy concept has become popular. In a sharing economy, individuals and organisations are encouraged to share. Bangladesh startup founders often need help to set up their new offices with furniture due to the high costs. Rheaply, a company based in the United States, assists organisations in managing their inventory by identifying and cataloguing things (such as equipment, furniture, etc.) they possess, reusing them internally if there is an opportunity and distributing them through selling or donating to other organisations who need them. If such a company exists in Bangladesh that can take extra furniture or equipment of a company and sell or lease it to another, it would be a win-win situation for both parties. Another company, FLOOW2, has built the first business-to-business sharing marketplace that enables companies and organisations to share their overcapacity of equipment or even knowledge and skills of personnel with other businesses.
However, trust lies at the core of everything in a sharing economy, as owners or lenders may fear losing their items to dishonest borrowers. Insurance is used as a financial tool to hedge such risks of possible loss or bridge of trust. The Swedish company Omocom provides insurance for products, space, and vehicles enlisted on peer-to-peer platforms. To create trust in the sharing economy, the company offers insurance when the borrowers use, transport, and access the items.
Alongside business models, design is one of the most important aspects of a circular economy. Businesses have to design products for sustainability so that the products have longer lives. Products should be designed for disassembly so that the product’s materials, components and parts can easily be recovered and turned into a new product. Packaging innovation for products will also play a vital role in building a circular economy. For instance, Unilever launched Bangladesh’s first refill machine for liquid-type products such as Rin and Vim so that customers can bring their old Rin and Vim bottles or empty containers to refill whenever they need. In this way, the company doesn’t have to package these products in plastic bottles whenever they sell them.
In 2013, the National Development and Reform Commission (NDRC) and the Ministry of Finance of China formulated the ‘Swap the Old for Remanufacturing’ policy, which increased the collection of scrapped vehicles by nearly 5% by 2016. The policy provides financial and regulatory incentives to both manufacturers and consumers to increase collection rates. Subsidies are provided to enterprises that collect end-of-life vehicles, including parts, machines, machine tools and entire vehicles for remanufacturing purposes. To incentivise consumers to purchase remanufactured products, the policy offers a 10% discount instead of purchasing a new one.
The Government of Bangladesh has published the ‘Solid Waste Management Regulations 2021’ under the Bangladesh Environment Protection Act 1995. The country needs to focus on implementing and updating the regulations at least every four years. Bangladesh was the first country to ban polythene and single-use polythene bags. However, the policy remained only in the documents as the authorities failed to implement it. Thus, the country must stringently implement the policies while formulating its Circular Economy Roadmap by aligning with itsSmart Bangladesh Vision 2041.
Author: Shah Adaan Uzzaman
