India Could Leapfrog Advanced Countries By Adopting A Circular Economy

We have to slowly fix our economy to make it more sustainable. Growing countries like India could avoid the mistakes the first time.

As sleeping economic giants like India grow, the worry is they’ll take on the same bad habits as advanced countries: the same diets, the same levels of car use, the same consumerism, the same penchant for air travel. If so, current environmental problems, like climate change, could become unmanageable, and the world may run dangerously short of everyday resources. Take clothing as an example. If the developing world adopts our shopping habits, apparel-related carbon emissions will grow 77% by 2025, and water use will jump by a fifth, according to consultants McKinsey.


Alternatively, emerging economies could take on more “circular” approaches, where goods are designed to be recycled, “reverse logistics” networks send consumed materials back to retailers and manufacturers, and consumers move from ownership to service models. For example, a service model for personal transport–Zipcar rather than buying a car–could radically reduce footprints in the developing world, according to a new report from the Ellen MacArthur Foundation and the United Nations Conference for Trade and Development (UNCTAD).

“India could move directly to a more effective system and avoid getting locked into linear models and infrastructure,” the report says. “As the systems that provide housing, food, and mobility require development . . . the country could realize significant value by developing them in a circular, rather than a linear, way.”

Across three areas–cities and construction, food and agriculture, and mobility and vehicle manufacturing–India could create $218 billion in additional economic value by 2030 ($624 billion in 2050) by adopting circular principles, compared to its current “development scenario,” the report says. At the same time, circularity could cut greenhouse gas emissions 23% by 2030 (44% by 2050), and reduce the use of virgin materials 24% by 2030 (38% by 2050).

The report looks at ways to introduce circular approaches across the three areas. On mobility, for example, it recommends India promote sharing schemes for bikes, scooters, and cars; introduce in-car connectivity systems (to better manage traffic flows); and increase engine remanufacturing, which uses 23% less energy compared to producing new engines from scratch. The goal would be to decrease car ownership (which is only 2% of population anyway), keep vehicles on the road longer, and move to electric power, reducing noise and pollution and improving quality of life.

The report argues India can jump ahead of mature economies because less of its infrastructure is built and linear processes of “take-make-dispose” are not yet locked in. “This advantageous starting point could provide India and other high-growth markets with a competitive advantage over those economies,” it says.

See our previous coverage of Ellen MacArthur Foundation’s circular economy reports here and here.


About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.