This post originally appeared as a twitter thread by Vidushi here.
Morality in markets is expensive. Why does the average consumer have to bear the burden of “ethical consumption”?
As a middle-class, keen-on-a-sustainable-lifestyle consumer, my consumption choices come at significant cost to me. It requires time, effort & money to choose products that are eco-friendly, have controlled emissions, fairly traded blah blah. Not the best user experience. Fashion industry is an emissions and labour exploitation juggernaut; hence it is my personal responsibility as a consumer to buy “ethically made” clothes that are worth three times my capacity, but hey, at least I don’t support industries exploiting workers in Global South. Supermarkets provide vegetables in unnecessary plastic packaging, and because it is my personal stance to minimize plastic waste, it’s on me to invest time in finding rare, low waste alternatives. And of course, these alternatives don’t operate at the usual market price.
Standard products that markets provide for a regular consumer optimizing for price: plastic packaged, emission generating, processed foods – all are inherently damaging. And deviating to sustainability isn’t as feasible for the common person. Got to pay a price for your morals. I have to constantly justify the higher prices of “ethical” products to myself by convincing myself of having a “moral high ground”. I’m supposed to pay more to stick to my belief for a better planet for everyone, while the companies make better profit out of me paying more. People trying to live sustainably are often questioned if this expensive individual action has any impact on the grand scale. We question ourselves too and continue living with this burden because well, it’s your personal choice & it’s fair to pay for what you chose. Is it? Being a vegan is an automatic hit on your wallet. Why should I waste time deciphering ambiguous labels? Ecolabels should make me happy, which can very well be mere greenwashing. The very concept of one’s personal carbon footprint was in fact first publicized by BP. Come on.
All I see is consumers constantly struggling for fair options while companies continue standardizing their hazardous offerings. Is it fair for consumers to pay for their choices when the choices available are in fact not what they would want? Shouldn’t the onus of this morality be on these companies who force this dilemma upon us in the first place? Why should consumers have to pay for the externalities that the producers create? Do only the privileged deserve a guilt-free consumption? We need better options.
Among the latest technological developments in the energy sector, the discussion on powering economies using Hydrogen technology is gathering considerable limelight for past couple of years. After the first major wave of popularity in the 1970s, the recent Hydrogen wave that started picking up in early 2000s has gained considerable momentum since 2017. Hydrogen technology, more importantly Green Hydrogen, is being considered a key component of decarbonization plans for many countries in Global North, especially targeting sectors where renewable electricity isn’t feasible, such as heavy industries and long distance transportation. Notably EU in accordance to their ‘Fit for 55’ plan targeting a 55% reduction in emissions by 2030 and climate neutrality by 2050 have set separate targets for hydrogen. Germany alone has allocated a budget of €9 billion for their national hydrogen strategy. The technology and market mechanisms still being in their early stages of development render green hydrogen prices quite high as compared to other mainstream renewable sources such as solar and wind; cost parity being predicted in some countries only by 2030. Amidst this debate, Nepal, a ‘developing country’ that contributes mere 0.027% to global GHG emissions and is among the list of countries most susceptible to climate change, is interestingly keen on making an early beginning.
Nepal’s present energy scenario
Around 72% of Nepal’s energy demand is met by biomass and waste, other prominent sources being oil, coal and hydropower (Figure 1) for the country’s population of 29 million.
Nepal Electricity Authority (NEA) in its Annual report 2019-20 reports a total installed capacity in the country of 1332 MW for a peak electricity demand of 1408 MW as shown in Figure 2. Country’s final energy consumption 2017 recorded the share of electricity as merely 3.66%. Almost all of the electricity produced in Nepal is from hydropower. The generation capacity is owned by public as well as private enterprises with around 22% of electricity being imported from neighbouring India as of 2020. Almost 94% of the electricity is supplied to the residential sector and around 2% goes for commercial or industrial applications. IEA reports that today only 6% of the country’s population remains unelectrified. As per Nepal’s Ministry of Finance, the country is getting electrified at a rate of 4.3% per year against the global average of 0.8%. NEA has declared that there has been no load shedding in households after 2017 and in industrial sector after 2018. In spite of the progress in electrification, Nepal stands low at a position of 102 out of 108 countries listed in the Energy Trilemma Index 2020. Country’s per capita electricity consumption remains low, one of many reasons being electricity price is still high for a major section of the population (0.069 USD per kWh). Sector-wise energy consumption is topped by the residential sector (75%) followed by transport (12%) and industry (8%). The country is majorly dependent on imported fossil fuels especially crucial for transport sector which entirely runs on oil. Nepal also has largely unexplored but high potential of other renewables such as solar PV, solar thermal and micro hydro.
Due to various reasons such as high import dependency, insufficient storage capacity, inadequate infrastructure and financial constraints of the energy institutions, Nepal faces an energy shortage. The abundant hydropower potential remains largely untapped and the country continues to face challenges to maintain reliable and sustainable energy security.
The case of ‘surplus’ hydropower
Reliable electricity access goes hand in hand with GDP growth and hence increasing the share of electricity in the total final consumption forms a major focus for the government. Situated in the Himalayan region with almost 220 billion cubic meters of annual water runoff from the rivers, a 2020 report by Asian Development Bank (ADB) estimates a potential of 83 GW of hydropower in Nepal out of which 43 GW is techno-economically feasible as of now. As of 2019 however the installed capacity of hydropower stood at only 1113 MW which means only 2.5% of the total potential is currently being utilised. Recent estimates by Kathmandu University suggest more than 20 GW of hydropower projects are under various stages of development. NEA owned hydropower plants generated a total of 3021 GWh of electricity in FY 2019-20, an increase by 18.57% over the generation of 2548 GWh in FY 2018-19. Interestingly, provided that the current plans of hydropower development follow through, there is a scope of energy surplus, with figures indicating an excess of 3500 MW of hydroelectricity by 2028. Hydropower plants in Nepal also generate maximum output during rainy season from June to September. However, country’s energy demand is actually low during the time leading to large energy curtailment. NEA estimates hydroelectricity wastage between 53 – 840 MW in 2021 due to low consumption in rainy season. Since the electricity can’t be utilised locally, Nepal also plans on expanding its export options to neighbouring countries of India and Bangladesh experiencing high growth in energy demand. The exports plans have failed to fully materialise yet due to variety of reasons such as infrastructure unavailability, legal issues and geo-politics. Other renewables such as solar are abundantly available in India which are much cheaper than hydroelectricity making the option economically unattractive for India. Transfer to Bangladesh means setting up infrastructure through the Indian mainland that lies in between, impeding any major action. Some development was seen recently in this regard with the three countries in talks to finalise the process of exporting 200 MW electricity to Bangladesh by end of this year. Going a step forward, since 2020 Nepal has initiated the dialogue on utilizing their surplus hydroelectricity and untapped solar potential to establish the country as a major green hydrogen producer for local use as well as international markets.
A case for Green Hydrogen
Hydrogen can be used in either gaseous or liquid form as fuel or for generating electricity. It isn’t freely available in nature hence has to be produced using other energy sources. On the basis of production technique, hydrogen is often classified into colour categories of black, brown, grey, blue, green; even turquoise and purple hydrogen. Today approximately 70 million tonnes of hydrogen is produced globally for use in the industrial sector, most of it being produced by using fossil-fuel sources. The latest centre of attention – Green Hydrogen – is produced using electrolysis of water that splits water into oxygen and hydrogen using renewable electricity, generating two useful end products without contributing emissions to the atmosphere. ADB’s 2020 report ‘A study on the prospect of Hydropower to Hydrogen in Nepal’ studies the country’s scope of green hydrogen production with different levels of assumed hydroelectricity curtailment along with exploring costs of production and energy storage. The report suggests that given Nepal’s conditions of abundant hydropower potential ultimately expected to produce electricity more than the demand, yearly curtailed/wasted hydroelectricity during rainy season due to lower demand, and complications associated with developing hydropower projects as per plan, generating green hydrogen and storing it to fulfil the energy demand during seasons of higher demand is an option worth exploring. Another area of interest for the country is their rapidly growing transport sector which is currently 100% oil dependant and can be potentially powered using hydrogen fuel-cells.
The government in 2020 conceived the ‘National Hydrogen Initiative’ (NHI) to explore the possibilities in a concrete way and establish policy foundations. The main targets of NHI include policy interventions and financing, establishing pilot projects, supporting business for more commercialisation and developing institutional arrangements to support related activities. The government has initiated a collaboration with Kathmandu University and their recently established ‘Green Hydrogen Lab’, whose contributors include the Nepal Oil Corporation and the Norwegian government. Nepal has a potential of becoming a hotspot for cheap green hydrogen production in the future, which is also beneficial for countries in the Global North such as Norway, Denmark and Germany who have elaborate plans for transforming into hydrogen economies but don’t necessarily have the most economically feasible ways to produce the required hydrogen themselves.
Challenges for Green Hydrogen
Even as the share of traditional energy resources in Nepal has slightly decreased, the corresponding energy is being filled in by fossil-fuel sources such as coal and oil. These fossil fuels are largely procured from imports, with the import trends drastically increasing since 2013. Electricity affordability is still a major concern with a consumption of only 238 kWh per capita per year which is one of the lowest in the world. Limited institutional capacity has often led to unfulfilled targets in the past, which is most evidently seen in case of the country’s EV targets. Nepal’s 2016 Nationally Determined Contributions (NDC) for UNFCCC set an aim of increasing the share of EVs up to 20% as compared to the 2010 levels and 50% reduction of dependency on fossil fuels in the mobility sector by 2050. The share of EVs actually stood at less than 1% by 2020, leading to a target revision of 20% EV share in private passenger vehicles by 2025 in their second draft of NDCs. Especially when many have argued (famously Elon Musk) that electric vehicles make more sense than hydrogen-powered vehicles, perhaps focussing on EVs for decarbonizing mobility sector could be more beneficial for the country. The sophisticated hydrogen plan could be a long shot given the history of difficulties with materializing their more abundant primary renewable energy sources such as hydro and solar.
Despite high developments in electrolysis technology, electrolysis still remains a highly expensive process which can be a major challenge in the country’s hydrogen plan. Green hydrogen is still 2-3 times more expensive than blue hydrogen and is expected to match blue hydrogen costs only by 2030. For a country with population struggling with affording fossil-fuel generated electricity, hydrogen technology for local use can appear a distant dream. Another frequently cited crucial barrier for hydrogen technology is its low efficiency of around 30% by the time it crosses multiple conversion stages to finally reach the motor or battery. Moreover, even if GHG emissions aren’t a direct end product of the process, exporting green hydrogen internationally would involve generation of a huge carbon footprint.
As Nepal is still facing challenges to decrease the dependency of traditional energy sources, a dialogue about Green Hydrogen is somewhat unexpected but nevertheless worth exploring. A strong political commitment and institutional support along with eagerness from the industrial sector would be essential. Also important is planning out models of possible value chains and carrying out detailed cost analyses. The country has already initiated the consolidation of a Hydrogen action plan. If successful, it could have the potential to transform Nepal into a highly profitable manufacturer of the green fuel for global markets e.g., for regions like Europe spearheading carbon neutrality and neighboring country India also increasingly focusing on hydrogen. International collaborations could hence be a huge benefit with Global North assisting with technology and capacity development. Ultimately, the basis of this scenario is Nepal’s highly underutilized Hydropower (and other renewables) which, in parallel to the Green Hydrogen plan, should be given prime attention.
Ever since the impact of human induced climate change transpired in the international community, governments have been the face of all the major action. It’s a tug of war between regulators that want to regulate everything and libertarians who want the freedom to choose and act as they please – how do we align these skewed incentives?
After the Earth reportedly experienced cooling between 1940-1970 as a result of a post- world war aerosol build up which led to increase in the Earth’s albedo, the late 1980s witnessed visible global warming and consequently early 90s began the mark of global recognition and prominent discussions on anthropological climate change. Climate models and predictions demonstrated the possible future scenarios, should humans continue with business as usual, with Intergovernmental Panel for Climate Change (IPCC) presenting multiple scenarios of our future on this planet ever since. The global movement didn’t originate only at the governmental level; civil society had also begun organizing itself primarily in the form of anti-nuclear movements across Global North. Several individuals with the likes of Donald Leal, Dennis Hayes, Sunita Narain emerged into limelight along with organizations such as Greenpeace and the radical ‘Earth Liberation Front’ (ELF).
Mertig and Dunlap in their paper described environmentalism as ‘one of the most successful movements in the US and Western Europe’. Meanwhile in Global South (environmentalism in the Global South is often viewed from the framework of Third World Approaches to International Law [T.W.A.I.L.] in International Environmental Law), lot can be discussed about when it originally started; nature and its conservation being an important part of people’s lives in countries such as India and Japan. Specifically for India, Ramchandra Guha mentions in one of his articles that it was ‘environmentalism of the poor’, initiated by communities that were dependant on these natural resources, depletion of which would cause not only environmental damage but social injustice. Across the globe there was also seen emergence of several ‘Green Parties’ in the political sphere, many of which have successfully evolved to prominence. However, global climate action was and continues to be largely dominated by the governmental sphere. Conference of Parties (COP), Kyoto Protocol, UNFCCC (even though it is a UN Organization, it depends on international governmental cooperation) and all the prominent names in environmental discussions are being steered by a global government collaboration.
In the early stages of the acknowledgment of climate change (arguably already materializing in late 1960s) the focus was on how environmental changes affected human health. Consequently, the world saw designing of several principle, treaties, and laws by the government for regulating related detrimental activities. Montreal Protocol regarding effects of CFCs on the ozone layer came into action all over the world in late 80s, Sweden became the first country to impose a carbon tax, the notable Agenda 21 came into being – we have plethora of such examples of international governments collaborating on global forums and then implementing (effectiveness of which is a discussion for another day) on each country level. Governmental regulation is the most prevalent method for climate action, and even though global collaborations have demonstrated some significant results, one is tempted to think if this is the only option, and more importantly, the most effective option we have. For one, libertarians sure aren’t happy with the state of the art.
Major critique of government dominated environmentalism
An easily observable issue with environmental protection purely via government regulations is recognising that climate change, pollution and environmental degradation are largely concomitant of undefined property rights. In case your neighbourhood is getting contaminated by the hazardous fumes by the nearby factory, or your city river which is frequented by significant number of citizens for its aesthetic value is being choked by the plastic litter, or the dam which powers you hometown is leading to a decrease in the number of fish on which your livelihood is based, the actors responsible for bringing these disruptions can always argue that the responsible company stood there even before your neighbourhood came about, there is no solely responsible source of plastic pollution in the river that can be tracked and nipped, and powering entire town is more important than one person’s livelihood, respectively. Rivers, air, nature; these aren’t owned by anyone privately and hence no one person has enough incentive for their maintenance. Everyone continues with the mindset that since it’s not their property and therefore not their job, their individual action is not going to change anything anyway and hence the pollution continues. Environmental degradation employs the classic ‘Tragedy of the Commons’ by Hardin, and can be supplemented with understanding of human behaviour via behavioural economics (V. Raghunathan provides the behavioural economics explanation for such behaviour with respect to India in his book ‘Games Indians Play’, which can be also extended for the case of environmental degradation).
Litigation in such cases becomes especially difficult due to the same reason; arriving at a ‘fair’ decision within a clearly marked system boundary is just too convoluted. Complications increase when there are multiple states involved, like in cases of transboundary water disputes. Some sort of resolution has been brought about by assigning boundaries to such resources (essentially establishing property rights) in cases such as fishing in international waters by forming associations, defining water boundaries, and allotting quotas. The process remains tricky, however a significant improvement has been observed over the earlier condition of having no boundaries defined and continuing with unsustainable fishing which often led to high fluctuation of fish prices.
Extending the same property rights rationale, public property being ill-maintained is quite a notoriously true observation majority of people will concur with. The plight of public parks, buses, monuments (frequently seen in India) raise a big question mark on the efficacy of government regulations and supervision on unclear property rights. Critics have also talked about high costs of environmental regulation along with its weak implementation. One can also argue that since such laws are a consequence of transnational decisions which then are implemented through the central government of the country, such broader decisions might not work effectively while getting implemented at the local level. Many critics suggest that since property rights lie under market institutions, cultivating a ‘new’ environmentalism taking in view characteristic of a market and an individual’s liberty would be a better pathway.
Libertarianism sees an individual as the fundamental unit of the society, individuals having the right to choose and make decisions while respecting the same values for other individuals. The rights of an individual are not provided by anyone else like the government but are inherent in human nature. This is not to say that no order or outright anarchy is the way of libertarians; this school of thought recognizes the importance of societal order (they recognise the existence of a libertarian paradox – the idea that to protect individual liberty we need the state to protect individual liberty which in turn will involve some violation of liberty) but believe that imposition of such order is not necessary since over the years the institutions we have developed came about spontaneously and not forcibly or as per some other-worldly plan.
Expanding this to environmentalism, the next line of thought would be then, if libertarians allow the right to choose and hence the corporation has the right to pollute, doesn’t that make libertarians climate change deniers or to say the least incompatible with science? Libertarians have been often accused of their apathy towards climate change with enough libertarian luminaries of the day contributing towards reinforcement of the allegation. Interestingly, many libertarians have argued that the popular axiom of pollution economics – that pollution is an externality and therefore leads to market failure – is in fact flawed, their version being that pollution is rather a by-product of absence of markets. Government with its profound power levels is more susceptible to corruption and succumbing to optics where it tends to focus on the more visible matters rather than long term issues such as climate, whereas free markets operate voluntarily without any powerful central entity to bribe in the first place.
The proposed libertarian version of environmentalism
Although not wholly representative of this side of argument, a major concept often discussed in the libertarian take of things is ‘Free Market Environmentalism’ (FME). FME is largely attributed to Anderson and Leal who wrote a book by the same name in 1991 which gave shape to this chain of thoughts. Market failures like pollution are often corrected through government regulation, but the libertarian way points out to the additional failure of the government. FME hence argues that defining property rights clearly and therefore allowing markets to come into play on their own without governmental intervention can circumvent the flaws with governmental regulation. Once the property rights are clarified (or should we even say the property is ‘privatized’), the stakes for the owner/ actor responsible are much higher and hence is a direct incentive for resource preservation. Such a system promotes the owners to optimize the property use and keep away or punish the ‘trespassers’. Since these property rights are also transferrable, the potential that it might be sold to some other way of resource use makes the actors more accountable towards preserving the property in question. One argument also says that since the philosophy of libertarianism stresses on the values such as responsibility and accountability, these can be used well in relation to environment protection.
Governmental institutions, according to certain economists, don’t have the appropriate incentive or even information for climate action. Context of environmental preservation can vary highly over geographies and demographics; hence decentralization becomes an important tool in implementing the regulations, absence of which can render huge shortcomings to the goal. Some popular methods proposed, some of which have already been employed in various parts of the world, are taxes (pollution/carbon taxes), tradeable permits (Cap and trade schemes) and quotas.
On the other hand, some have commented, notably Mark Sagoff in his 1992 critical essay ‘Free-market versus libertarian environmentalism’ that FME is not representative of the entire libertarian take but possesses quite some differences with libertarian environmentalism. Taking reference of Anderson and Leal’s work on FME, he notices that their version of FME considers economic efficiency as the supposed main goal of environment policy and disagrees with their observation that environment protection and markets do not go hand in hand (Anderson and Leal claim depletion of resources is necessary for economic progress) which clearly, like Sagoff points out, should not be considered as a principle. He discusses how libertarian environmentalism actually works on the same basis of the philosophy of libertarianism; pollution essentially is violating other’s individual rights and hence should be punishable. He suggests that environmentalists should adopt the libertarian way of treating pollution as a tort rather than as an externality.
Challenges to libertarian environmentalism
Continuing from Sagoff’s critique, the argument that market and hence economic progress mandates resource degradation is not necessarily true, especially today where we have well developed concepts already being talked about, for instance ‘doughnut economics’ and ‘circular economy’. Libertarians also need to argue against the allegation of their practices leading to only damage to the environment, when the truth is that free markets have enabled great innovations in several sectors such as food, energy, and water.
However, just as a dominant solution for libertarians for environmental preservation is property rights, a dominant problem for this argument is – you guessed it – property rights. Property rights allocation works great in case of certain resources such as land, however defining property rights in case of resources such as water and air still doesn’t work effectively. These resources simply cannot be assigned to actors as their ‘private property’ for them to preserve it. Another important aspect to note is market failure related to the nature of consumption and if appropriate rivalry of the goods is present for the markets to function efficiently. As Kolstad describes in his article, consumption of air, for instance, in a particular area by me doesn’t hinder the intake of air by you, such open source or ‘commons’ don’t make good rivals and hence even though markets trading these goods will function, it won’t happen effectively. Litigation of such cases – identifying definite culprits and providing ‘justice’ to the victims – will entail huge transaction costs, and hence polluting is the cheaper way out. Quotas, for instance trading schemes and fishing quotas, also run the risk of too much complicacy for the target audience to understand before compliance, since different states (e.g., multiple federal states of a country, or multiple countries involved in an international system) can adopt different approaches and regulations. For such an instrument to work successfully, as has been often suggested in case of emission trading schemes, there needs to be one common framework globally. Uneven standards over geographies can cause carbon prices to fluctuate frequently and set per unit carbon prices which are too low as compared to the social cost of carbon, therefore, making it uninteresting for the parties to participate in the trading.
Carbon taxes have been another prominent solution offered by this pathway. Based on the polluter pays principle, carbon taxes take care of the additional social costs generated by the respective source. The tax eliminates the conundrum of preserving the commons and provides an incentive to minimize pollution in order to save business expenses. The revenue raised can be further used for developing more mitigation efforts. Even though many countries in the world have successfully implemented it, a common critique that such taxes face are development of tax havens and subsequent shifting of industries to these havens thus affecting the economy of the taxed region. Not to forget such taxes are especially difficult to monitor and might also invite tax evasion. Another argument offered against such taxes is it allows the ‘right to pollute’ as long as you are able to pay for the damage you induce, which defeats the fundamental purpose of such a tax.
Quite some critics call out libertarians citing their fundamental philosophy, that they are hostile to market instruments where state is the authority assigning property rights (case in question being emission trading; however it is questionable if emissions trading really can be called property rights), hence contradicting their belief of rights preceding the state; and they of course have issues with the method of government regulation, so libertarians might as well declare climate change as a hoax. However, one can argue that this might not be a legitimate argument; if libertarians don’t have problems with state assisting with property assignment (e.g., when you have to buy an apartment), why would they specifically have a problem while assigning rights in this case?
Sagoff in his essay also discusses how the ‘libertarian assumption’ that state will always be inefficient, corrupt, inadequate and underinformed might not be true as we have examples where country governments have enabled environmental regulations effectively and impactfully. If the libertarian argument is how free markets are the remedies to everything and rely on pointing out flaws in the governmental method, the other side can also use the same blame game logic and start pointing out flaws in the market system; such argumentation doesn’t do any service to the cause.
While some call libertarianism the ‘natural home to environment protection’, there are plenty of arguments available suggesting libertarian ideology doesn’t go hand in hand with environmentalism. Viewing past the libertarians’ painted picture of ‘propertarians’ and economic development maniacs, one cannot deny the benefits of free market environmentalism and the relevance of libertarian ideologies of respecting all individual rights and therefore not polluting the commons (which is a result of an individual’s ‘right to pollute’ but leads to infringement of right to breathe fresh air by many others, which isn’t acceptable under the school of thought). There are multiple ways suggested, especially by Sagoff, how libertarian ideology could be useful to environmentalists. Government regulation has been the dominant pathway of climate action, even as it manifests extremely slowly since international environment law works entirely on consensus, which as one can guess is quite a herculean task to achieve. Free markets and the libertarian ways might be faster and more efficient; however, the fact of the matter remains that the main basis of the libertarian solution, the process of defining property rights, is not straightforward in case of open-access resources. Even if we manage to succeed in the endeavour somehow, suggested market instruments come with their own bunch of caveats. Pollution still remains a social cost which someone needs to take care of – and pushing this blame onto each other by calling other’s ideas intellectually inferior might consume the critical time that we have left to generate action.
(This article received valuable inputs from Divyanshu Dembi. Find his writings here.)
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.
Single Use Plastics (SUPs) ever since their emergence in the 1980s have played a ubiquitous role in the world economy. Their versatility and convenience have served us in multiple ways, and only recently has the public drawn its attention to the undisposed SUPs choking our city drainage systems and killing birds and animals who mistakenly consume it as food. The world was already struggling with the ever-increasing plastic pile, before the pandemic came along and exacerbated the problem like never before. With more than 1 million people dead from COVID-19 globally and economic growth at halt (with the positive side-effect of clearer skies) the pandemic has catapulted humanity in a colossal plastic waste management crisis. India’s waste management infrastructure has continued struggling for long to keep pace with the country’s growing economy, which now coupled with the large population has worsened the plastic pollution situation.
The plastic mountain
Medics and Health workers working on the fore-front are required to wear Personal Protection Equipment (PPE) which comprises components like respirator, face shield, gown, goggles and gloves. The entire PPE is majorly made up of plastics like polyester and polypropylene , with the exception of gloves in which the latex variant is also available . India has seen a drastic growth in the number of cases since May 2020 and hence is struggling with consequential plastic waste generated from the medical sector. The initial shortage of PPE kits was quickly fulfilled with numerous companies emerging in India to manufacture PPE kits, making India the second largest PPE kit producer.  Availability of the kit is still a problem even with more than 600 licenced PPE manufacturers in the country , and an even bigger problem awaiting is safe disposal of these single use plastic kits. Even though international travel is restricted, domestic travel requires passengers to wear the PPE too. According to a recent study, 3 in 4 urban Indians (76%) wear masks in public places . Other major behavioural changes recorded in the pandemic are bulk buying (or ‘panic buying’), increase in packaging materials as people prefer home delivery of groceries in cities, online shopping and tendency of customers buying plastic packages items for better protection , all which is gradually leading to a cascade of unmanaged plastic. A recent study observed a surge of 55% in online shopping in India .
Already insufficient waste management infrastructure of the country has been now put to a bigger test. China is the biggest manufacturer of face masks and reports say that those masks are hard to recycle owing to their multi-layer composition . Consumers while using SUPs tend to believe that it will get recycled ultimately, however due to higher cost of recycling of SUP as compared to other plastics, companies are less interested in investing in SUP recycling. Decreased recycling means SUPs could end up in landfills, ultimately contaminating the ecosystem and putting waste handlers at risk of COVID-19 infection. Plastics being non-biodegradable after much wear and tear are reduced to microplastics which ultimately ends up entering the food chain and hence our bodies as well. Energy requirement of the medical sector and hence the ecological impact has increased, which is finally going to waste due to the large Single Use items involved. Even before the pandemic there were reports suggesting ridiculously minimal rate of recycling of the world’s plastic waste. The problem now has intensified as the drastic dip in global oil prices have led to virgin plastic being cheaper than recycled plastic, which has rendered the recycling process less lucrative .
UNEP declared plastic pollution to be a worldwide crisis in 2017 and since then attempts have been made by governments and businesses to tackle the problem. Even before the pandemic had struck, Ellen McArthur Foundation had reported that plastic in the oceans will outnumber the fish by 2050. With the plastic menace bigger than ever, PM Narendra Modi recently appealed to the public to avoid using SUPs as well. To wait until after the pandemic ends would be too late and hence immediate and effective action is essential.
Conquering the mountain
The plastic problem can be alleviated by a combination of behavioural changes by the common masses and strengthening our infrastructure for a sustainable pathway of overcoming the pandemic.
1. .Lowering the environmental impact of PPE
Use of PPE for healthcare workers is a mandatory condition. Majority of PPE in use today is designed for single use, and since it is largely made of polypropylene, recycling is not easily achieved. Hindustan Times reported in June 2020 that daily biomedical waste generated by medical institutions in Delhi has increased to 2.5 – 4 kg per bed during the pandemic as compared to the usual 500 g per bed. Using such big sized PPEs once before sending them to landfills doesn’t help India’s plastic pollution situation. Even as we deal with the plastic menace, many parts of India are still facing PPE shortages. There could be a couple of ways to approach these problems.
1.1 Using reusable PPE instead of single use PPE
Reusable PPEs could be a means to tackle the problem of PPE shortage as well as plastic pollution. Single Use gowns are made from nonwoven fabrics like polypropylene and PET whereas reusable gowns are largely made of woven PET. Accounting all the processes of manufacturing and life time of a reusable gown, it has lesser cost, energy demand, environmental impact than a single use PPE. A study shows that switching from single use gowns to reusable gowns can lower the energy consumption by 64%, water consumption by 83%, solid waste generated by 84% and greenhouse gas emissions by 66% . Reusable gowns need to be disinfected and sterilized after each use, for which different methods are available. Chemical decontamination methods include chlorine dioxide, bleach, ethylene oxide, ozone and hydrogen peroxide. Physical methods include methods like treatment with UV rays and gamma radiation. Many studies are available that prove disinfection and sterilization of PPE does not lead to a decrease in its efficacy.  Strong evidence is available proving that coronaviruses are affected by vaporization of hydrogen peroxide . Methods with less environmental impact and more efficacy are hydrogen peroxide vapour , ultraviolet radiation , and ozone gas for masks.
1.2 Reusable masks for uninfected masses
Masses especially in urban India tend to rely more on surgical masks and respirators for a better protection. As per a latest study, while single use surgical masks scored 99% in material filtration efficiency, three layered cotton masks scored 86.4%, which is not a very exceptional difference . The Prime Minister and many other leading politicians are frequently seen donning reusable masks. For healthy and uninfected people who follow other precautions of social distancing and general hygiene, reusable cotton masks can be a cost effective and environment friendly substitute for a surgical mask.
2. Replacing conventional plastic with bioplastics
The cost of environmental effects of crude oil and natural gas draws attention to other manufacturing means. Bioplastics made from sugar, starch, cellulose by mixing fibres have a quite high potential for substituting conventional plastics. Bioplastics can be categorised by bio-degradable, bio-based or both. Global bioplastics production capacity is set to increase from around 2.11 million tonnes in 2019 to approximately 2.43 million tonnes in 2024 . There are four types of bio-plastics available :
There are mainly three ways that can be chosen to manufacture bio-based plastics. The most popular one is wherein natural polymers are preserved and chemically modified to starch or cellulose based plastics. This type of material is used for non-food applications (e.g. cellulose acetate). Second method is a two-step process used for conversion by chemical transformation followed by polymerization. Third method is a process to manufacture polymeric material. (e.g. PHA) 
The University of British Columbia (UBC) have developed a sustainable solution during the COVID-19 pandemic. A medical grade N95 mask has been made using wood fibres as raw material. Moreover, this mask is claimed to be made from all local materials, is inexpensive, and is compostable and biodegradable. The mask is currently being tested for achieving required Canada’s health standards.
Currently the percentage of bioplastic are only 1-2% of the global plastics production. However, bioplastics have already penetrated through industries such as packaging, food-services, agriculture, consumer electronics and automotive. Bio-plastics show a great promise to replace plastics in the future and can be hence used to manufacture products with soaring demand owing to Covid-19.
3. Suitable disposal techniques
There is only a limit to earth’s waste handling capacity, and waiting for the threshold sure isn’t the wisest option to pursue. The concept of circular economy is the way forward where we aim at reducing as much waste generation as possible by inculcating recyclability within the design of a product. Majority of plastic in use today is recycled mechanically. Mechanical recycling however has limitations in case of coloured, multi layered or mix material plastics. For such cases the option of chemical recycling can be used, a process whose aim is to recover the basic building blocks of polymer. Chemical recycling seems to fill the short falls of mechanical recycling, although it has not been commercialized on a larger scale. In case recycling is not a profitable or feasible option only then should the option of incineration come into picture.
Lessons to be learnt
The most important lesson from this pandemic is the unpreparedness of our infrastructure to handle such emergencies. We have however couple of options available to alleviate the current situation and prepare for the next one. Replacing single use plastics with reusable materials as much as possible should be the main priority. Suitable methods are already available for disinfecting and sterilizing the reusable materials such as PPE kits. Reusable materials awareness among the masses regarding the unnecessary use of plastic products out of paranoia needs to be handled with relaying appropriate information. Replacing conventional plastic with bio-plastics is a promising scenario to retain the properties of the product with added benefit of reduced environmental impact. In case when reusability is not possible, disposal techniques need to be chosen accordingly depending upon the type of waste material, amount and cost involved. Incineration is the best method for disposing large volumes of waste, where as physical or chemical disinfection can be used for smaller amounts . This is also an appropriate time to realize the menace the increasing plastic pile is creating for our country and hence should be seen as an opportunity to invest in waste-to-energy technology. In the long run, we need to promote circular economy in India in preparation of the next emergency. Recyclability should be built in design and manufacturers need to take charge of extended producer responsibility as well, wherein the product is designed keeping the entire life cycle cost in mind. Indian culture already allows the space to reuse and recycle materials at home informally, which we need to promote more extensively. It is now evident more than ever that the synergy between government policies, business operations and citizens’ behavior is essential for effective crisis management, as well as sustainable development for all.
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