The circular economy in the developing world

The circular economy is usually described as a strategy for industrialised countries, often as a response to over-consumption of energy and resources. The name itself distinguishes it from the ‘linear economy’ that it replaces, re-using materials rather than consuming them.

But what if you haven’t got a linear economy to replace? What relevance does the circular economy have in poorer countries? So far, it “is almost entirely absent from the development discourse”, according to a new report from Tearfund and the Institute of Development Studies. It’s time to put that right, because for developing countries, the circular economy is an opportunity to do things differently first time around. It’s an “alternative growth model that reduces the tension between lifting people out of poverty and protecting the planet.”

Virtuous Circle isn’t a long report, but it’s the first time I’ve seen the ideas of the circular economy applied specifically to development, and that feels overdue.

Of course, many traditional ways of doing things are already circular in nature. When resources are scarce and expensive, things get reused or repaired. We could learn a lot from the ingenuity of African mechanics. However, these practices begin to fall away as development progresses, as the linear model is the default import. As we’ve seen with ocean plastics, rubbish can increase without investment in waste disposal to match. People have access to consumer goods and processed foods, with all the packaging that entails, but there’s no formal recycling or rubbish collection. This can lead to waste escaping into the environment, and pollution of land and water. As the report points out, that means that some lower income countries are actually moving backwards on resource efficiency.

Getting to grips with the waste problem in rapidly developing countries would benefit the environment and human health, and help to keep us within the planetary boundaries. It would also create jobs, replacing informal waste picking jobs with better work in recycling and remanufacturing. Being able to make better use of existing resources would make poorer countries more resilient to price rises for raw materials. It may even help to reduce the likelihood of resource conflict. There are many advantages to leap-frogging to a circular economy.

What does that look like practically? Tearfund’s partners on the ground provide a few examples. Take Procomposto, a Brazilian business that collects food waste from restaurants and turns it into compost, creating value out of organic waste that would otherwise be in landfill. Or the Vira-Lata Cooperative, which collects used car parts from garages, sorts them, and delivers them to a steelmaker for recycling.

These are small to medium sized companies that are formalizing the waste stream in Brazil, and creating economic opportunities and decent jobs in the process. They are intermediate in scale – a good step up for the waste pickers, but still small enough to keep the profits and benefits circulating locally. Since it is the poorest and most desperate who end up working on the landfill sites, these companies are making a difference for those who need it most.

There are plenty more examples in the report, along with policy recommendations to encourage a transition towards circular economy leap-frogging. It is a promising opportunity, and I hope to read plenty more about the circular economy in developing countries in future.