What is the Circular Economy

The circular economy represents a comprehensive approach to addressing pressing global challenges, including climate change, biodiversity loss, waste, and pollution. It signifies a profound shift in how our world produces and consumes goods and services. Embracing this model involves fundamentally restructuring our economic systems, primarily focusing on minimizing waste and pollution while prolonging the lifespan of products and materials.

The concept of a circular economy traces its origins back to waste management, particularly as nations recognized the necessity of implementing economy-wide measures to shift away from waste disposal and management and toward waste avoidance and prevention. Japan pioneered this shift in 2000 by introducing the Basic Law for Establishing a Recycling-Oriented Society. Similarly, in 2008, the People’s Republic of China enacted its Circular Economy Promotion Law, defining the circular economy as a comprehensive term encompassing activities that reduce, reuse, and recycle throughout the production, distribution, and consumption processes. Essentially, the circular economy began as an agenda for mainstreaming and scaling up previously established and proven 3R practices—Reduce, Reuse, and Recycle.

As the circular economy concept gained recognition throughout 2010, additional dimensions emerged. Firstly, there was a growing emphasis on the quality and origin of secondary materials and the associated technical and environmental risks. The circular economy concept also increased economic resilience, reducing dependence on primary materials, including critical minerals. Secondly, it became clear that waste couldn’t be entirely eliminated at its source (i.e., when products are discarded), but rather at its root cause (i.e., the design of products, services, and processes that influence waste generation throughout the product’s lifecycle). This realization led to a heightened focus on sectors and product value chains with high waste and resource intensity.

The European Union’s 2020 Circular Economy Action Plan incorporated these expanded perspectives with three core strategies:

  1. A sustainable product policy framework, influencing the influx of products and services into the economy;
  2. The transformation of waste-intensive product value chains, including electronics, vehicles, textiles, packaging, and plastics; and
  3. Strengthened waste policies to create functioning markets for secondary materials.

In 2021, the ASEAN region embraced the circular economy vision by adopting its Framework for Circular Economy for the ASEAN Economic Community (AEC). This framework presents an aspirational definition:

“The circular economy is restorative, regenerative by design, and effectively uses materials and energy to retain their value. Competitiveness, efficiency, and resilience are at the heart of the circular economy.”

Strategic Goals

Through recycling and reusing, the circular economy presents an opportunity to safeguard our environment, optimize the utilization of precious natural resources, and catalyze the emergence of new industries, jobs, and capabilities. As it moves towards a circular economy, ASEAN strives to achieve a balance between three interdependent goals:

Resilient Economy

ASEAN can leapfrog resource-intensive development paths – which tend to be vulnerable to shocks – by adopting circular economy alternatives. Shaping circular economy that is resilient to climate change and resource constraints will minimise costs and risks over the long-term, ultimately benefiting ASEAN.

Resource Efficiency

ASEAN’s commitment to circular economy-based policies and innovations to attain resource efficiency will boost industries’ competitiveness in domestic and foreign markets, both regional and global. A strong regional ecosystem for eco-innovation is very important, to strengthen and support pioneering entrepreneurs and startups, not to mention investors and big corporates.

Sustainable Growth

Environmental, Social and Governance (ESG) criteria is part of the growing international trend towards investment portfolios where profit goes hand in hand with sustainability. ASEAN has an opportunity to lead this global shift by becoming a hub for circular innovations and mobilising funds towards circular investments.

Circular Economy Knowledge

Integrative Report on Implementation of the Circular Economy in ASEAN
To seize these opportunities, the Framework for Circular Economy for the ASEAN Economic Community was established in 2021 as a guiding principle for ASEAN Member States in transitioning towards circularity.…
Accelating the Circular Economy in Europe: State and Outlook 2024
The circular economy has become a generally acknowledged idea. It is more than just waste management; it is about maintaining the value of materials and making them endure longer in…
Knowledge Summary | CaF2024: ASEAN Action Towards Circular Economy: Move Forward with EPR
C asean Forum 2024: ASEAN Action Towards Circular Economy: Move Forward with Extended Producer Responsibility is a collaborative effort organised by the ASEAN Centre for Sustainable Development Studies and Dialogue…
Assessment of the first-ever circular economy framework of Cambodia: Barriers, international opportunities and recommendations
The paper discusses the relevance of the Circular Economy (CE) as a solution for environmental challenges faced by various stakeholders in Cambodia, particularly in light of its reliance on resource…
TVET for the Circular Economy: Preparing the Workforce for the Circularity of Industries
The labour market information report (LMIR) by The Technical Education and Skills Development Authority (TESDA) of the Philippines offers insights into the demand and supply sides of the local and…
Making Circular Economy Work for Business and Industry
Insights: ASEAN Circular Economy Stakeholder Platform Webinar Series Background The ASEAN region is experiencing significant growth, with its member states advancing to higher income levels. This development, coupled with urbanization…
Towards a Unifying Framework for Business Action for the Circular Economy in ASEAN
This business engagement paper positions circular economy as an innovation and co-creation framework to break the dependence of products and services on the unsustainable use of natural resources which is…