Earlier this year, the UAE established a federal circular economy council to generate new economic opportunities, reduce the use of natural resources and protect the environment. In this piece, Nour Sleiman, co-founder and chief marketing officer at UAE-based Cartlow, a re-commerce website explains the impact and importance of the circular economy.
Transitioning into a circular economy is not solely aimed at minimising the negative impact of a linear economy, but also on the overall health system of the economic activity. Shifting from a ‘take, make, use, dispose’ to a ‘make, use, return, re-use’ model would require the dedicated contribution of organisations, individuals, and businesses together – large and small – to work effectively at all scales. This model shift will generate new business and create economic opportunities while contributing positively to the environment as a whole.
Nowadays, the earth’s raw materials are increasingly consumed at a large scale to generate the products that we use on a daily basis. According to a report by the OECD, approximately 50 per cent of greenhouse gas emissions are generated through this process. Furthermore, GCC countries generate about nine million tonnes of scrap metal per year, with plastic and metal waste rising at far faster rates than the global average according to Strategy&. We have seen many global initiatives shift towards a circular economy. A prime example is the UAE, where it recently adopted the Circular Economic Policy to regulate the use of natural resources and its approach to achieve sustainable governance.
Beyond the environmental benefits, where economies can reduce carbon dioxide emissions by 10 to 12 million tonnes per year, resulting in significant environmental benefits, a circular economy presents a large potential for economic growth. According to a McKinsey report, businesses can witness an increase in revenues through adopting circular activities, such as dissembling already functional product parts and re-using them to make new products; which can increase gross domestic product (GDP). It is also vital to note that as the world population grows, the demand for raw materials grows along with it, and unlike a linear economy, a circular economy’s need for materials is lower, therefore, it is likely to save up to 70 per cent of raw materials.
Through development, regulation, and organisational contribution, the potential for new job creation increases with a circular economy model. If GCC businesses prioritise recycling at 40 per cent, it is estimated that 50,000 new jobs and 15 per cent higher operating margins can be achieved, especially through specific value chains according to Strategy&. Although the UAE is widely known as an innovation and startup hub, adopting a circular economy mindset will further encourage new businesses to discover and invent new ideas, methods and processes that will reduce costs (operationally) and…
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