Carbon Dioxide (CO2) once released into the atmosphere could stay around for 300 – 1000 years. Around one-fifth of the global CO2 emissions come from the transport sector (passenger + freight), in which 75% can be accounted to only road transport. Hence, popularizing electromobility could have a significant impact in reducing those CO2 emission and reduce environmental risks. Looking at countries with maximum number of electric vehicles, USA and China stand on top of the chart. But when it comes to market share of electric vehicles within a country then Norway is the winner by a large margin. The journey of EVs in Norway started in 2011 with share of passenger cars at just 1.6% and now Norway has the world’s largest market share for EVs with 61.5%. With this astounding success Norway has set a benchmark for all the aspiring nations to achieve better electromobility goals. A number of factors helped Norway to achieve this feat.
Looking a few decades back, till the 1950s Norway’s economy was mainly dependent on fishing. In 1959, Shell – a Dutch oil and gas company – discovered little gas sources around Norway. With further explorations, one of biggest oil fields was discovered near the Norwegian waters. In 1972 Norway founded its national oil company ‘Statoil’, now known as Equinor. That is how the oil boom started in the country, and today Norway is the fourth largest oil producer in the world. After sufficing the domestic needs, natural gas and oil form a major part of their exports. With reference of electromobility, increasing the use of electric vehicles will reduce the domestic consumption of oil and gas. This was a perfect blend for an oil and gas intensive country, and promoting electromobility technology at home eventually increased the high-in-demand oil and gas exports globally, generating higher revenue for the country.
Norwegian state owns a major share in the company Equinor, so in a way Norway’s economy is significantly controlled by the state. The Norwegian administration was prudent enough in investing this oil wealth in a global fund called the sovereign wealth fund. Some other progressive countries, in particular China, Singapore, United Arab Emirates and many more varied countries, are co-investors in this fund. However, Norway has the largest of the all sovereign wealth fund which stands at $1.17 trillion providing a strong financial backbone. Moreover, the government uses only the interests/profits of this fund and not the capital for public use. It is the one of the few countries of the world which does not have a significant debt which makes it net a positive economy. Having a strong and stable economy allows a country to push new technological boundaries and bear the potential risk involved. The Norwegian government had ample scope to invest and take risks in new technologies such as electric vehicles.
Managing to manufacture such high quantities of vehicles could be tricky as setting up manufacturing factories and predicting the initial demand can be a tough task. Along with the imperative of economic security, Norway ranks at 119 globally with regards to population. Because of comparatively low population their demand-supply threshold is low. Taking into consideration lower population manufacturing facilities to meet the EV demand was manageable which made penetration in the country achievable compared to other highly populated countries.
It is only environmentally viable to adapt to EV and reduce combustion engine vehicles only if the electricity generated in the country has higher share of renewables; promoting EV and charging them from fossil-fueled electricity would not be as efficacious with regards to the aim of reduction of CO2emissions. In Norway, 98 percent of all electricity production comes from renewable sources. Hydropower is the basis of renewable energy sector of Norwegian industry with around 95% of the electricity generated in Norway being from flexible hydro power plants. There was a large installation of wind power as well in 2019. With such high shares of hydro and wind power, Norway is electricity surplus country. This surplus of renewable energy fits in perfectly for supplying added electricity demand from the EV market with clean electricity.
Even after all these pre-conditions which support the idea, its actual implementation is always a challenge. Charging infrastructure needs planning and high investments. Strategically, for establishing infrastructure for electromobility there is a dilemma between whether to increase the number of electric cars as a first step or the first step as making charging stations widely available. Norway targeted areas with higher population density to tackle this dilemma. The population in the country is concentrated in the southern part of Norway, with the counties of Oslo and Viken being the most inhabited regions of the country. Initial focus of developing the necessary EV infrastructure was laid in these regions. This made majority of the people familiar with the technology and eventually believe in it. Once the demand of cars increased in these regions, multiplying the infrastructure to other regions of the country was done with efficacious planning. Now, there are hardly any regions without charging stations to be found in Norway.
Governance and incentives
Technology alone cannot meet success; it needs favourable laws and incentives in the initial phase to have an exponential growth. It simultaneously needs to flatten the use of the previous technology in the market to replace it. Norway levied massive taxes on the ICE vehicles and reduced the sales and import tax on electric vehicles making it pocket friendly for the customers buying cars. Along with it, the government awarded free parking and free toll roads for EVs and such plans for electric vehicles turned out to be a much easier choice for the buyer for long term investment too. Commuting was also made faster by permitting EVs to access the bus lanes which has comparatively lesser traffic.
The investments and the plans for electromobility in gaining ground were implemented mainly between 2009 and 2011. Approximately 7 Million Euros were invested during these 2-3 years in building infrastructure for manufacturing and charging. Since then the percentage of market share of electric vehicles have seen constant growth by maintaining technological and governmental upgradations in the schemes and policies.
The efforts to make electromobility a success for Norway took focused efforts for longer than a decade. This EV success story for Norway continues to progress. The next goal for Norway is to have all new cars sold from 2025 be electric or hydrogen-fueled to achieve zero emissions. Learnings from Norway shows that transition from ICE to EV is surely possible. For countries looking up for implementing plans for electromobility, it is absolutely possible to adapt similar corresponding plans in their respective countries. The key fundamentals elements which need to be at place are share of renewable energy, revenue for the infrastructure and governance support for execution. An overall effort, wherein the fundamental, economic and systemic factors incorporate and evolve gradually for longer goals should be roadmap of all countries for transitioning the transport sector to a low emission sector with electromobility.
Indians inherently are great consumers, as in, they consume the hell out of a product. Not great consumers in the true business sense though — homely jugaads like using finished jam bottles for storing spices, old t-shirts as the kitchen cloth and making bed sheets out of old sarees can sometimes act as real substitutes to consumerist behavior. Whenever a new item is purchased, its durability is a major criterion and its life cycle is charted prior to making the decision. Circularity hence is not entirely alien to our culture.
The concept of circular economy around the world as well is not new, it has been floating in the academic circles for many years. However, in the last decade or so it has gained traction as a real buzzword, and is today more relevant than ever. World population continues to grow, with standards of living continuously improving and consumerist behaviour driving the economic growth more than ever. Global North, that doesn’t have to care about population boom, continues to consume and discard materials at an unprecedented rate. Global South on the other hand, with its increasing population, standing at the threshold of the portals to western ideals of development, has begun its journey on the same path of take-make-waste, and India is a vital part of this narrative. Before Covid-19 pandemic hit the world, India was riding a roller coaster on its way as one of the fast-emerging economies of the world.
Societies today have multiple pathways to the ultimate coveted summit of ‘development’, which don’t have to be identical to the path taken by the industrialized economies. Pushing the envelope with the take-make-waste approach, circular economy offers an alternate, comprehensive and sustainable approach to development. 1.3 billion Indians, who the next census will tell if they have surpassed China in numbers of mouths to feed, continue to compete for the country’s resources. The country’s economic slowdown, now worsened by the pandemic, has aggravated the struggle. India would need to adapt a sustainable model of development to still be able to call itself an “emerging” economy, and a developed state in the future. Even though the per capita figures are small, according to the World Bank, India produces the most waste globally, with a 2016 estimate declaring the amount of solid waste generated as 277 million tonne per year. India is also the third largest emitter of greenhouse gases; even as per capita levels remain insignificant as compared to the top two emitters US and China. Elite imitation is not the only alternative for becoming a developed state, and surely not for sustaining the developmental status. We have the advantage of learning from history and hence designing India as per the framework of circular economy can help us avoid taking the same wasteful path and ensuring a sustainable future.
The concept of Circular Economy
Just like the aforementioned Indian households, circular economy believes in maximizing value. Rather than the conventional ‘cradle to grave’ approach where we use and throw products – whose true value remains unoptimized and continues to contribute to the growing pile of garbage, circular economy promotes the ‘cradle to cradle’ approach, where materials are kept in circulation for as long as possible. By designing products to be reusable and recyclable, it aims at eliminating waste. Focus is laid on building not only efficient but resilient systems. Other important concepts that it encompasses include bio-mimicry, regenerative design and performance economy. Ellen Macarthur Foundation (EMF), a pioneer in championing the concept, distinguish between the technical cycle — where techniques like reuse, repair and refurbishment are used as product recovery strategies, with recycling being the last option, and biological cycle — where consumption is allowed however regeneration of the utilized nutrients is also ensured with methods like composting. They describe the following as three main principles of the circular economy:
Designing out waste
Keeping materials and products in use in circular loops
Regenerating natural systems
Viewing India’s future through this lens reveals the relevance of the concept to the Indian scenario. Waste management particularly has not been our strength, and we therefore need better designed products which minimize the need of dealing with materials after their life cycle ends. Large part of India’s population is also dependent on agriculture as its main livelihood, hence a focus on, say, returning nutrients to the soil and support regeneration can be a game changer for the agro sector. With 7 Rs of Rethink, Reduce, Re-use, Repair, Refurbish, Recover and Recycle, it is evident that there are multiple ways of thinking beyond the conventionally talked about Recycling approach, which sure is a part of the picture but is not the only resort to optimizing the value chain. Cascading cycles ensure optimum use of materials, high utility, replenished natural resources, eliminating waste and hence ensuring prolonged and sustainable progress.
India’s current path of development
World Bank has pointed out in the past that India’s story is one of growth and achievement. Home to rapidly emerging middle class, India has shown a rather stable growth path. However, past few years have seen an economic slowdown. Even before the pandemic put a hold on global markets, and shocked Indians with -23.9% growth rate for Q1 FY 2021, India’s growth had already started to decline in various sectors like agriculture and construction. As India now focuses on gaining the traction back, this might be just the moment for integrating circularity in the economy.
Product optimization has remained crucial for the common Indian. Repairing, refurbishing and recycling supports an entire bunch of people employed in the informal sector which is critical in driving and supporting this concept. e.g. 60% of discarded plastic is recycled in India, which is much higher as compared to economic giants. However, majority of this is being handled by the informal sector and therefore doesn’t lead to institutional changes needed to achieve circularity systemically. The country employs more than half of its population in the agriculture sector, even though agricultural output and its contribution to GDP is not in proportion to the people employed. The agriculture sector has seen slowdown in the past years, even as India is faced with the challenge of feeding it growing population. Agriculture struggles to thrive along with the problem of soil degradation, which is due to natural as well as human-made causes. It also competes for water resources with millions of people living in lack of water and sanitation facilities. Where developed countries face the challenge of food wastage majorly in the consumer stages, food wastage in India is spread across the entire value-chain, with millions of tonnes of grains wasted in post-harvest and storing stages. In the 2020 Global Hunger Index, India stands at 94th position out of the studied 107 countries in the 2020, under the category of “serious level of hunger”. India still is a major global exporter in the sector, however, there could be an impending supply constraint in the future with India’s growing population and increase in per capita calorie intake. India is also urbanizing rapidly, which means cities are constantly under increased pressure for supplying resources to a growing population in a limited area. Cities are key drivers of economic growth worldwide, and even though official sources suggest a figure of 30% urbanized India, several studies suggest that the actual figures could be way more depending on the way urban areas are defined. Growing standard of living improves citizen’s purchasing power which pushes them to consume more. One could even take the liberty to claim that for the emerging middle class, acquiring of assets might be more like a status symbol than seeking real utility and optimization. India’s per capita material consumption however remains rather small as compared to other growing economies. Indian government with its initiatives liked Swaccha Bharat and Smart Cities mission are expected to help build the necessary framework and infrastructure. India is involved in many joint programmes with international governments like Germany for capacity building and idea exchange, however cost benefits of such schemes could be limited if an integrated approach is not adopted at a large scale. Rapid urbanization also invited problems like traffic congestion and pollution. India is home to some of world’s most congested and polluted cities, which seen on an Indian scale is a remarkable outlier, as only a little above 2% of the Indian population owns cars. There have been many initiatives by a number of state and city governments to tackle such issues, with cities like Pune gaining recognition for many of its successful initiatives. Government is increasingly recognizing the vitality of public transport infrastructure and is also trying to push electric vehicles in Indian markets. ICE vehicles might still rule the roost for a long time till some significant policy changes are introduced. Another growing sector is the electronics market, where majority of the demand is met through imports. Managing electronic waste however is becoming a nuisance as India generates two million tonnes of e-waste annually, with a mere 1.5% of India’s total e-waste getting recycled and almost 95% of it being handled by the informal sector. Metals constitute an important component of these gadgets, extraction of which is an energy intensive process. Unorganized handling of e-waste also poses hazard to the workers and the environment. Economic development also means more commercial and residential buildings being built in India, with studies stating that over 70% of the buildings in India estimated by 2030 are yet to be built. Construction and demolition waste contribute to one-third of India’s total solid waste. Building sector makes a large part of the pie of India’s greenhouse gases emissions, which means there is a huge scope of improvement in resource efficient buildings and cities. Sectoral analysis can be done of each segment of Indian economy, especially the ones driving the growth narrative, which ultimately will reveal great initiatives taken but have huge scope for improvement in setting the framework for sustaining the growth. The Covid-19 pandemic saw a rapid pile-up of the already gigantic mountain of plastic waste, with single use masks, gloves and other medical waste putting more pressure on the existing insufficient waste management infrastructure. Circular economy focuses on making economic growth independent from linear consumption of limited resources, and hence would enable Indian state to be a more resilient system.
The reimagined path of circularity
Propelling India’s economic growth needs constant resource supply. Our resources are only limited and the world’s growth is way too dependent on the linear, under-optimized model. Ensuring that materials in the society run as much as possible in loops will allow maximum utilization of resources therefore minimizing the amount of waste generated. Circular economy as a concept is fairly well known in the Global North, especially Europe, however utilizing it in India opens a door of brand-new possibilities. As India undergoes rapid modernization in its infrastructure and institutions, the time is appropriate now more than ever. The EMF in 2016 released a detailed study of such a framework in India and reported an annual value creation of ₹14 lakh crore (US$ 218 billion) in 2030 and ₹40 lakh crore (US$ 624 billion) in 2050 as compared to India’s current developmental path. As a result of eliminating waste, a cost benefit of 30% by 2050 has been indicated.
Keeping materials in loops would mean a cut in energy use and emissions to create virgin materials, which will have a significant impact on India’s carbon footprint. Concept of ownership also is redefined in such an economy, where we take products/services on lease from the manufacturer rather than owning them, and returning them back to the manufacturer once they are close to achieving their optimum performance in the first cycle. The manufacturer then takes the product in, repairs/refurbishes/recycles it and sends it back to the market starting another loop. With reference to this technical cycle, organized refurbishing, remanufacturing and recycling sector will lead to new job creation at a large scale. More than half of the world’s population lives in cities and the numbers are only going to increase, and same holds true for India as well. Promoting circularity in city planning would include optimum urban planning, space management (e.g. constructing vertically instead of horizontally in congested cities like Mumbai) and a resilient energy system. In energy sector India is hugely dependent on imports especially for oil and gas and promoting circularity through renewable energy available amply in the Indian mainland will be essential for an atmanirbhar Bharat. Building segment has ample room for cutting emissions which can be tackled using sustainable raw material and optimum design. World Economic Forum in 2016 had reported that adopting circular principles in the building segment could help many countries to achieve cost effective emission cuts and attain energy savings of more than 30%. Mobility sector also is a huge playground for the circularity concept, with public transport being key to developing a truly liveable city. With a huge population still without personal vehicles, this could be an ideal starting point to develop effective and diverse transport network to serve the large chunk of the Indian population. The EMF report indicates that the suggested circular development path could reduce total vehicle kilometres travelled by 38% in 2050, helping significantly in lowering congestion on roads. Looking at the biological loop of the circular economy framework, it would require efforts on eliminating nutrient leakage, with consumption allowed but with ensuring releasing the residues back to the ground using methods like composting and anaerobic digestion. The huge amount of losses throughout the value chain is taken care by ensuring shelf life of food is improved and residue/waste is used for regenerative process like making livestock feed and biofuels. Digitization of agricultural sector can enable farmers to be active participants and for developing an optimum process flow. There are certain successful programs already like that of ITC’s e-choupal, which is helping develop an efficient supply chain, with real-time information and customised knowledge enabling the farmers to take better decisions, align their yields with market demand, maintain high quality and ensure better productivity. Effective water management is achieved as continuous nutrient circulation prevents soil degradation and minimized food waste means decreased in the water wasted in making of the potential food. Total annual benefits of ₹3.9 lakh crore (US$ 61 billion) in 2050 with 31% less agricultural GHG emissions have been estimated.
Long story short
Parts of the circularity concept exist in the ethos of Indian society; however, their manifestation has largely been informally and unorganized at smaller scales. To enable circular economy in India would require a systemic paradigm shift from the linear model to the circular model to be able to reap the entire set of benefits. Businesses as well the government has taken note of the future possibilities of this pathway, and the government would need to make active policy changes in order to encourage circular behaviour in businesses. Multi-level governance is of key importance in this regard, and this would need more decentralization of power to local government as well to make significant impact. Each sector of India’s economy could operate in its own loops which then are connected in inter-sectoral loops forming a comprehensive framework. There are huge opportunities for bringing down the country’s carbon footprint, creating new jobs, and creating true economic and sustainable development. Circular loops would enable better, inclusive and healthier ways of living for the citizens. Awareness would play a major role in propelling the concept in the country, hence educating the conscious Indian youth beaming with ambitions and innovation could potentially be real advocates of the concept. Circular economy is not just an on-paper idea but an extensive structure which makes business sense along with real socio-economic benefits. The recent European Green deal has recognized circularity as a key concept for sustainable development. India today has a chance to be an early adapter in order to drive its transition as well as gain advantage over the conventionally industrialised economies for a better future.