The new economic model extends the 3 R’s of consumer recycling to 4 tenants of a circular economy for environmentally friendly economic growth.

By Xische Editorial, February 12, 2020

Circular economies are rising. The idea of an economic model focused on reducing, reusing, recycling and remanufacturing resources to ensure growth has transitioned from academic theory to a guiding ideology. The European Union, in particular, has begun implementing various aspects of circular economic thinking across member states to spur growth in its manufacturing sectors. It goes without saying that a robust manufacturing sector has been the primary economic engine of industrialised economies for centuries.  

The global economy finds itself at a crossroads when it comes to manufacturing and resource management. Technological advancements are facilitating a sea change in how goods are produced, moved, and used. Traditional economic giants are forced to change their approaches while new actors, especially in the emerging world, are using innovative new methods to become titans of industry. The basics of the circular economy are critical to this global transformation and present a unique opportunity for smaller countries such as the UAE. 

According to a report commissioned by the Ellen MacArthur Foundation and carried out by McKinsey, a fully-fledged circular economic model could dramatically boost the European manufacturing sector and by extension create new growth streams. In the subsectors of product development, remanufacturing, and refurbishment, the effects would be especially profound. We can already see the benefits on a smaller scale in select consumer markets. 

Considering the amount of online shopping most of us do, it’s incredible to see the level of interest in reusing. Take the popular clothing company Patagonia. The company actively encourages its customers to reuse and fix old clothing instead of buying new items. And how many cafes now encourage patrons to bring their own reusable cups to avoid single-use plastics. What happens in this sector of the economy bears heavily on larger areas. The reuse economy is not just for the consumer but is a critical facet of sustainable economies around the world. 

If we expand the consumer idea of remaking and reusing to the manufacturing sector, it’s easy to see how much saving can take place in the supply line in a circular economy. That’s because the circular economy is designed to eliminate as much waste as possible by continually using and reusing resources. Traditional manufacturing models base growth on the extraction of natural resources, the creation of goods from those resources, and the management of waste stemming from the entire process. This linear model has had an outsized impact on cities in both positive and negative ways. Two-thirds of global energy production is consumed by cities. 80 per cent of greenhouse gas emissions are generated by cities. A staggering 50 per cent of global waste is produced by cities. 

The circular economy is a sustainable model for manufacturing and economic growth that can deliver lasting results for the next 100 years. The basis for the model is simple. Businesses and communities work together to reduce, reuse, remake, and recycle goods in a circular model. European lawmakers predict that circular economic measures will result in a 37 per cent energy savings in 2020 as well as 700,000 new jobs created across the EU. For the GCC, the potential benefits of the circular economy are even more profound with a projected $138bn savings potential by 2030. 

A homegrown circular economy would have additional benefits in Dubai beyond the borders of the city. At the nexus point of millions of people, Dubai is a hub for emerging markets. Decisions made in Dubai thus have ripple effects across Asia, Africa, and the Middle East. By embracing a circular economy, Dubai can unlock new revenue streams, improve resource efficiency, reduce energy and utility consumption, and increase innovation in products and services. The benefits also extend to improved quality of life and greater civic pride and engagement. 

Innovation is not something you can teach. Sure, you can provide the right tools and infrastructure but for innovation to really take root, society needs examples to follow. A spark is needed that changes the way people look at challenges and understand what is possible. On a city level, Dubai has been laying the foundation for disruptive innovation for decades. From the creation of Dubai Media City in 1999 straight through to the Smart Dubai Platform, Dubai’s leadership have led by design. They are creating the sparks. 

Dubai is a global testbed for the latest developments in everything from smart city design to smartphone applications. Two of the largest technology acquisitions in the Middle East involved Dubai-based companies (Souq.com’s sale to Amazon and Careem’s sale to Uber). By establishing a circular economy, the Emirate will transform its manufacturing abilities, become a sharing economy incubator and establish a global green trade corridor. 

So, how exactly can Dubai build a circular economy? There are four focus areas that need to be targeted at the start: Production, consumption, waste management, and infrastructure. Within each area, straightforward measures can be taken. The Dubai Industrial Strategy, for example, can include circular economy targets in their annual review. Public awareness campaigns about the role of consumption in a circular economy can be spearheaded by the Government. Fresh infrastructure for advanced recycling programmes can be established. 

The steps that need to be taken aren’t particularly complex and Dubai has a long history of taking bold action to ensure that the city remains on the bleeding-edge of innovation. A viable circular economy will further Dubai’s efforts at building the most robust knowledge economy in the emerging world. It is a critical facet of our future. 

The recently announced Dubai Council is the latest manifestation of radical decision making taking place at the top that will have a positive trickle-down effect across society. By consolidating the Government and streamlining how it will function, the leadership is demonstrating the type of bold thinking for a truly innovative economy to flourish. One next step is building a viable circular economy in Dubai to ensure that resources are maximized in the most efficient ways possible.