In the context of natural resources becoming depleted and the environment under pressure, the transition from economic models linear to the economic circulation (STEALTH) has become an urgent need. In Vietnam, although this model still facing many challenges, but there has been progress in applying the solution, recycle, re-use, reducing waste. Let's Lac Viet Computing learn about the model of economic circulation, the benefits that it brings, as well as solutions developed this model for the business.
1. Learn about the economic model is what?
1.1 Workflow Definition
Economic circulation (Circular Economy – CE) is an economic model that maximizes the use of resources and minimize impacts to the environment. This model focuses on the re-use, recycling, reducing waste throughout the production process, consumption, destruction products.
Unlike economic models linear (take, use, dispose), economic circulatory recommended maintaining the value of products, materials, long-term, by the way, reuse, repair, recycling and re-make products, helping reduce dependence on new resources.
The core elements of the economic model circulation include:
- Minimize waste: By optimizing the production process and consumption.
- Recycling and re-use: Strengthen ability recycled materials, re-use old products.
- Use resources more efficiently: Focused on the use of the maximum value of the available resource.
1.2 example of economic circulation
Some examples of economic models, the circulation has been successfully deployed in the world:
- IKEA: The company has applied the economic model circulatory using recycled materials, recycled products. IKEA longer development services exchange and recycling of furniture, help customers to return old products for recycling into new products.
- Patagonia: Manufacturer outdoor sports this encourage customers to repair, re-use old products instead of buying new. The company also uses recycled materials for their products, thereby reducing the impact on the environment.
1.3 economic comparison of linear and economic circulatory
Economic linear: 's economic model tradition, in which resources are exploited, the product is produced, consumed and then discarded. This is the model of “take, make, dispose”.
- Cons: Depends on natural resources, cause pollution to the environment, creating energy waste giant.
- For example: Electronics industry with consumer products fast, such as mobile phone, laptop, after a period of use, will be put away without recycling or re-using.
Economic circulation: This model advocated re-use, recycling and resource optimization instead of just tapping consumption.
- Advantages: Minimize waste, protect natural resources, reduce environmental pollution and bring sustainable value for business.
- For example: Automotive industry are directed to the recycling car parts for re-use in the production of new cars.
2. Why business needs to focus on economic circulation?
The economic model of the circulatory not only help enterprises to optimize the production process but also actively contribute to environmental protection, cost savings, and enhance brand value. Here are three important reasons that business needs to focus on economic model circulation.
2.1 environmental Benefits
In the context of the environment are subjected to many negative effects from the process of industrial development, consumer non-durable, the transition to economic models, the circulatory help businesses reduce pollution, protect natural resources. This is shown through actions such as recycling, re-use, reducing waste.
- Reduce the amount of waste: The economic model of the circulatory help minimize the amount of garbage, especially the type of waste difficult to recycle. The re-use of materials, reducing the amount of waste not only reduce environmental impact but also saves the cost of garbage disposal.
- Reduced CO2 emissions: Apply the economic model of the circulatory not only reduce the exploitation of natural resources but also helps to reduce CO2 emissions. The recycling of raw materials, use of renewable energy helps to reduce significantly emissions from the industry.
- Data: According to reports from Ellen MacArthur Foundationif all businesses globally applicable model of economic circulation, and can reduce 9 billion tons of CO2 emissions per year, equivalent to about 39% of global emissions.
This model not only contributes to reducing pollution but also help reduce the cost of waste disposal, protection of natural resources.
2.2 Benefits of cost and profit
Apply economic models, the circulation can bring more benefits financially for the business, from reducing the cost of production to the creation of new sources of income from the recycling of reusable raw materials.
- Save the cost of raw materials: Recycling, re-use of materials helps to reduce dependence on raw materials, thereby reducing production costs. Businesses can use recycled materials or waste products in production without the need to purchase raw materials from outside.
- Increase the efficient use of energy: Use technology, energy saving and renewable energy helps to reduce operating costs long-term. Businesses can reduce the cost of electricity, fuel and other costs related to production.
- Create source profits from recycling: Besides the cost savings, economic model circulation also opens new business opportunities through the sale of recycled products. These products may include recycled materials or products made from recycled materials.
- Data: According to the study of Accenturebusinesses applying economic models recirculation can reduce the cost of production up to 20% and create new sources of profit from the sale of recycled products, at the same time reduce the investment cost on the raw material.
2.3 Improve brand image
Today, consumers are increasingly attach importance to the sustainability factors and environmental protection, when choosing products and services. The application of the economic model of the circulatory not only brings environmental benefits, financial but also help businesses improve image, brand value.
- Build credibility and trust: The business committed to applying economic models circulatory will get high trust from customers, partners and community. These businesses will be considered as a pioneer in protecting the environment, contributing to sustainable development.
- Attract customers and partners have the same perspective: Business applicable models economic circulation will attract customers and partners who are conscious of environmental protection. The application of methods of recycling used packaging, environmentally friendly, reducing waste and can raise the brand identity of the business.
- Practical example: Large companies such as Unilever and Nestlé have committed to switch to model economic circulation in the manufacture of packaging. Unilever, for example, has recyclable packaging and using recycled materials in many of its products. This not only helps them reduce the environmental impact but also improve the reputation, increase trust from consumers. Their image is positive reinforcement in the eyes of customers, at the same time attracting partners and investors.
3. Economic circulation in Vietnam and the world
3.1 economy circulating in Vietnam
Vietnam, although is in the process of conversion of applied economic models sustainable, there are still many challenges when implementing economic model circulation. Although there are a number of pioneering enterprise, as companies producing plastic recycling projects, renewable energy, this model has yet to be widely popular.
The environmental policy in Vietnam are increasingly improved, but the transition from economic models linear to economic circulatory still encounter many difficulties, including inadequate infrastructure, recycling, lack of information, knowledge about the process of circulation, awareness is still low in the business community.
Many models of production, new business direction closer to STEALTH in the private sector be done quite successfully, create more opportunities, production, business and enhance competitiveness for economic investment in Vietnam. Follow Ministry Of Industry And Trade, Vietnam Malemodel eco-industrial park in Ninh Binh province, city, can Tho and Da Nang city, saving $ 6.5 million USD/year; pattern processing by-products, aquatic products; union packaging recycling Vietnam (PRO). This showed potential opportunities to develop economic models circulating in Vietnam.
3.2 economy circulating in the world
In the world, many countries have implemented successful economic model circulation. The European union (EU) is one of the areas leading to development policy economic circulation, in which the construction of the circulation in the automotive industry, electronics, food and agriculture. The European union has set a target to reduce by 50% the amount of plastic waste by 2030, investments in recycling technology to build a circular economy.
The netherlands and Sweden are the two countries on applying this model, with big companies such as Philips, IKEA participate in the initiative, recycle, re-use of materials, aim to minimize waste and protect natural resources.
3.3 common Challenges when applying new economic model
Although the economic model of the circulatory have many benefits, but the application in many countries, including Vietnam, still facing the challenge:
- Infrastructure deprivation: The lack of recycling plants and modern systems of waste management efficiency.
- High investment costs: The transition from economic models linear to economic circulation requires large investments in technology, new system.
- Consumer habits: Consumers and businesses are not yet familiar with the use of recycled products or repair old products instead of buying new.
4. Solutions developed economic model circulatory success
To implement effective economic model, complete weekly business not just innovation in production methods, but also to combine with the modern technology, from which optimization processes, and promote the transformation sustainable. Explore specific solutions to help businesses apply, model development economic circulation effectively.
4.1 Mounting develop STEALTH with strategy number conversion
Convert number not only helps business growth efficiency, but also plays an important role in the implementation of the economic model circulation. The application of digital technology to help businesses track, optimize the production process, thereby minimizing the waste of resources, reduce emissions, increase recycling capabilities. Technologies such as Internet of Things (IoT), Big Data, AI can assist with the correct track the production process and provides information about environmental factors, help in business process optimization, re-use resources in an efficient way.
4.2 Leverage the support policy of The Government
Follow Resolution no. 41-NQ/TW of The political bureau of environmental protection in the period of accelerated industrialization and modernization of the country, from 2006 to date, the mechanism of budget expenditures applicable to the environmental protection not less than 1% of the total budget expenditure estimates every year. In addition, The state has issued a number of legal encourage shopping green products, such as Decision no. 68/2011/QD-TTg on the issuance of The category vehicles, equipment, energy-saving requires units to use the budget to purchase equipment, energy-saving from the date of 01/01/2013.
The government plays an important role in promoting the transition economic model from linear to cyclic through policy support mechanisms. The tax incentives, financial support and program investments in research and development (R&D) of technologies, recycling, resource use efficiency will help to reduce financial risk, encourage businesses to invest in the economic model circulation.
4.3 Promote recycling waste and scraps
Recycling and reuse of waste is core in the model of economic circulation. Businesses need to improve the system of collection, recyclable waste like paper, plastic, metal, and other materials to minimize environmental impact, while simultaneously creating new products from recycled materials. The use of advanced technology such as classification, automatic garbage, recycling, energy will help this process become more effective.
4.4 Apply advanced technology, energy-saving
Apply technology to save energy is an indispensable element in the development of model economic circulation. Businesses need to invest in advanced technologies such as solar energy storage systems, energy solutions, energy-saving to reduce operating costs, protect the environment. This not only helps to reduce the bad impact to the environment but also reduce operating costs, long-term for the business.
4.5 Propaganda, raise awareness about STEALTH
One of the important elements to model economic circulatory success is to raise public awareness and businesses about the importance of this model. Enterprises need to implement media campaigns, training programs, raise awareness for staff and partners to build a community of understanding, support economic circulation. Model standards can be referred to the campaign “Zero Waste” or “Plastic-Free” has helped raise awareness about reducing waste and encourage the community to consumer recycled products.
Despite many challenges in the deployment in Vietnam, but with the support of technology, policy support from The government, the economic model circulation are opening up new opportunities for business. The catch, apply economic models circulatory will help businesses not only improve production efficiency but also contributes to the overall development of economy and sustainable.
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