What is a circular economy?
A circular economy is a new production and consumption model that aims to optimize resource use, minimize waste, and protect the environment. Different from the traditional linear economy (produce, use, dispose), the circular economy is based on the fundamental principle that "everything is input for something else."
The relationship between green economy and circular economy
A green economy is a low-carbon economy that minimizes environmental harm and conserves natural resources.
Both the green economy and the circular economy share the common goal of promoting sustainable development, protecting the environment, and using resources efficiently, but each model has its own approach and strategy.
The circular economy is an integral part of realizing the goals of the green economy.
04 principles of the circular economy
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Energy efficiency: Reducing the consumption of raw materials.
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Extending the life cycle of products and materials: Maximizing the lifespan of products.
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Reducing waste and emissions: This criterion clearly demonstrates that the circular economy is the current global model, aiming for net-zero emissions by 2050.
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Minimizing environmental impact: Ensuring that the economy does not harm the environment.
Importance and benefits of the circular economy
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Environmental protection: The circular economy optimizes resource utilization, significantly reduces waste, and lowers GHG emissions. Reusing and recycling products slows down the depletion of natural resources, minimizes the disruption of landscapes and habitats, and helps to prevent biodiversity loss.
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Economic opportunities: The circular economy can unlock a market opportunity worth up to $4.5 trillion and create millions of jobs globally by 2030 (according to Accenture Strategy). According to a 2023 report by the Institute of Strategy and Policy on Resources and Environment (ISPONRE), the circular economy can help Vietnam save 0.5-1% of its GDP annually by reducing material costs and waste management.
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Reducing dependence on raw materials: In the circular economy, instead of continuously exploiting new raw materials, old products are collected and recycled to create new materials, reducing the demand for natural resources. This helps to reduce pressure on raw material supply, limit dependence on imports, and reduce risks related to price fluctuations or raw material shortages.
Opportunities of a circular economy in Vietnam
Vietnam has many opportunities to adopt a circular economy:
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Learning from global experiences: Vietnam can learn from the experiences of leading countries in implementing circular economy models, such as the EU, China, Japan, the UK, France, Canada, the Netherlands, Switzerland, and Finland.
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Reducing waste and emissions: The circular economy significantly reduces waste and greenhouse gas emissions. This contributes to achieving the Sustainable Development Goals (SDGs) and addressing climate change.
Challenges of a circular economy in Vietnam
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Legal framework: Vietnam lacks a comprehensive legal framework for the development of a circular economy. Existing policies primarily focus on green growth and sustainable development.
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Investment and technology: The circular economy requires significant investment and advanced technology. Businesses must invest in new machinery and equipment that meet energy efficiency standards or use clean materials, which can impact their profitability.
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Awareness: Public and business awareness of the circular economy is limited. The circular economy requires genuine cooperation and shared benefits. Therefore, using economic incentives and market mechanisms to engage stakeholders in implementing a circular economy is a significant challenge when businesses prioritize profit.
References:
Dung, N. D. T. &. H. Q. (2024, December 16). Environmental benefits from circular economy. Vietnam Economic Times | VnEconomy. https://en.vneconomy.vn/environmental-benefits-from-circular-economy.htmư
VnExpress. (2024, October 15). Thế nào là nền kinh tế tuần hoàn, kinh tế xanh. Tin Nhanh VnExpress. https://vnexpress.net/the-nao-la-kinh-te-tuan-hoan-kinh-te-xanh-4803850.html