This article first appeared in Forum, The Edge Malaysia Weekly on February 21, 2022 - February 27, 2022

A circular economy is a recent fashionable way of redefining growth, moving away from the current “take-make-waste” industrial model, which tries to create growth through the circular process of maximising usage of resources and minimising waste and pollution, so that society and nature end up with better well-being. The circular economy recognises that we have limited planetary resources, and human activity can mimic nature, which is all about birth-death-rebirth generation cycles. As a management process, the circular model is based on three principles of designing out waste and pollution, maximising use of inputs and regenerating the natural ecology. 

The Western industrial economy comes from an atomistic view of the world, in which everything is made up of individual atoms (the smallest particle), which combine in order to form new elements or things, in a linear, cause and effect view of the world. This mechanical view is essentially static, so you take what nature provides, make it into a product, and waste it after usage, because nature is free to you. 

The circular economy is a natural, organic view that sees everything as cycles in time. Every living thing derives energy from the sun, uses it to grow and reproduce, eventually dying, but its physical form then provides food for other living organisms. Physical things also decompose over time (ashes to ashes, dust to dust), but they interact with each other to form new things. 

Water has a cycle. It accumulates in the dew of the forest, forming streams and rivers, flows to the sea, where it evaporates under the sun, rising to form clouds that then provide rain. Thus, Earth has planetary cycles of days and nights, years, decades, millenia, which comprise billions of cycles of life and death of viruses, cells, animals and plants. 

In essence, why can’t we learn from nature, rather than just keep on destroying it for our own selfishness?

As overpopulation, overcrowding, pollution and destruction of our environment worsen our well-being, the circular economy was evolved to conserve and produce what we need without excess. The circular economy is not the work of the government but the collective effort of all in society to think, work and live along cyclical lines. In short, it’s a philosophy that helps us rethink progress as “made to be made again”, in which we do not throw away anything as garbage, which creates polluting landfills. Everyone of us has value — not to be discarded because we are no longer useful.

If designed properly, the circular economy is a methodical way of regenerating or restoring overall individual, firm, market, society and planetary health. This means that potentially, it involves and benefits all levels of society and planet — individuals and organisations, small and large businesses or bureaucracies, locally, regionally and globally. In short, we move from an engineering perspective to an organic perspective, where we treat everything, living or inanimate, as important and valued participants of a living planet. 

Cycles operate in all our daily activities, from accounting cycles and management reporting cycles to production cycles and even water sewage systems. The circular economy essentially merges the technical or engineering system with the biological system. When cycles are synchronised, things work smoothly. When cycles clash with each other, waste, disorder and even chaos can occur. 

If you think about it, our election cycles produce a lot of waste. Every few years, the politicians come and spend money on banners, posters and publicity material. They need money to finance their elections, so they create a money-politics-corruption cycle that is difficult to change. A lot of electoral promises are made, many of which cannot be kept, because once they get elected, they find that the bureaucratic cycles are entangled with legal cycles. Rules and laws have to be changed, but not everyone will agree, and if some laws and rules are obsolete, or conflict with other laws, then change is bogged down, with enormous waste. 

An example is where buildings are designed according to building by-laws that were inherited from the British colonial days. Restrictions, such as height and space usage, can only be changed through administrative exemptions, giving opportunities for corruption. The modern designs of steel and glass are not energy efficient, requiring expensive air-conditioning. Some production engineers claim that 80% of the efficiency of any product comes from the design. The more time spent on design to enable the circular economy (less waste), the greener our economy. 

For example, I used to have a lot of garbage, because everything I bought had plastic packages that I had to throw away. My light bulbs and batteries do not last long, so I am forced to throw these away, ending up polluting the environment. Just changing my lifestyle during the pandemic — by sorting my garbage and composting all my food waste into garden fertiliser — has minimised my garbage and given me better environmental health in terms of a garden that no longer needs fertilisers or pesticides. 

Philosophically, the circular concept is very helpful because any bad deed we do will come back to haunt us. Thus, the quick and dirty fix may turn out to be more costly in the long run. If we design our technical cycles to recover and restore products, components and materials through strategies such as reuse, repair, remanufacture or recycle, imitating nature, we will not have, as at present, a consumption or rather consumptive society.

The digital economy has merged the physical with the virtual, opening up new ways of doing things — providing services rather than products. We do not need to jet halfway around the world to visit Machu Picchu in South America physically. We can enjoy Incan history, archaeology and natural beauty through 8K digital videos, saving a lot in carbon emissions from jet travel. 

But the real importance of the digital circular economy is that we are getting information feedback cycles that enable us to make instant decisions. Digital technology enables us to create virtual models of reality and think through how the complex, interrelated and therefore unpredictable nature of the world we live in can be supported through virtualisation, dematerialisation, transparency and new artificial intelligence.

As the world tries to move more quickly into the Green Inclusive Society, envisaged after the 2021 United Nations Climate Change Conference (COP26) in Glasgow, we are committed to net-zero in carbon emissions. This involves huge changes in our lives and the way we run the economy. We can achieve this through pioneering the adoption of the circular economy at almost every level of the economy — from individual consumption styles to production cycles and recycling processes, and eventually exporting these ideas so that we get new incomes from new ideas. 

In short, Malaysia has all the resources, talent and flexibility to grasp the opportunities of the circular economy to improve our well-being, our cohesiveness and resilience as a society. The circular economy concept is ultimately both a mindset and an action programme. At the heart of the philosophy of the circular economy is whether man is an owner of Nature or her steward. 

As His Royal Highness Sultan Nazrin Shah, Sultan of Perak Darul Ridzuan, prophetically said at the Khazanah Megatrends Forum in 2014 on “Scaling the Efficiency Frontier: A Perspective on Malaysia”: “If we accept the notion that we are trustees, rather than ultimate controllers, over the resources in existence today, and that we owe an implicit duty for preservation and prudence, then the ethos of sustainability should be at the heart of our pursuit of growth. The transitions in mindset that I have mentioned — from the paradigm of production to one of preservation; from the paradigm of maximisation to one of optimisation, and from the paradigm of resource ownership to one of stewardship — will be one of the greatest tests of our time.”

In sum, implementing the circular economy for Malaysia will be a real test of our commitment to an inclusive green society and economy. 

Tan Sri Andrew Sheng writes on global issues that affect investors

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