Circular Economy: An important Challenge for Latin America

With resource extraction and industrial production activities in Latin America contributing to the global economy, it is important to improve awareness mainly in private sectors. The idea is to work in the transition of industrial activities towards a sustainable model, especially among smaller companies (Ashton, Hurtado-Martin, Anid, Khalili, Panero, & McPherson, 2017). In order to reach a sustainable economic development, small and medium companies in Latin America need to be aware of opportunities to enhance their economic and environmental performance (Ashton et al., 2017).

Circular economy provides new strategies to address the challenges of linear economy towards a closed-loop model. The new strategies include changes in processes, optimization of energy and resource use throughout lifecycles, eco-innovation, material cycles through cascade uses, extending the initial lifetime of a product, and a reduction in the amount of generated and eventual elimination of the concept of waste. The idea is to create a change in the micro-, meso- and macro levels. The starting point could be the micro level as a more feasible scenario for Latin America, which means working within the companies. Meanwhile, it is possible to progress in a meso level with the consolidation of industrial parks and clusters for different types of industries, with the main objective of creating cascaded uses of materials, components, or by-products among industries. Finally, it is important to encourage and involve policymakers for establishing new policies that impact at the macro level.

In this order of ideas, it is important to recognize the essential strategies to achieve circular economy and sustainable development. These strategies are categorized according to the interventions under a Circular Economy banner as (1) Eco-efficiency and (2) Eco-effectiveness interventions. We can start with eco-efficiency efforts such as Cleaner Production (CP), and once we realized we have reached the cap, we can consider making the switch to eco-effectiveness through regenerative design, eco-design, and cradle to cradle design, among other, as the critical disciplines to enable us to design at the outset the concept of waste and bring forward a high quality product and related manufacturing process that will result in asset or value creation after its first use. Below, a wider perspective of the strategies for Eco-efficiency (i.e. Cleaner Production) and Eco-effectiveness (i.e. Eco-design).

Cleaner production (CP) brings cleaner products, processes and services looking for the reduction of outputs flows such as waste and emissions and avoiding the input of nonrenewable and harmful flows (Ghisellini, Cialani, & Ulgiati, 2016). Additionally, “CP strategies, although voluntary, could enable companies to improve their operational efficiency and generate monetary savings, while reducing their resource consumption and pollution generation (UNEP, 2015)” (Ashton et al., 2017, p. 433).

Eco-design presents a set of potential business benefits, such as increased innovation potential, development of new markets and business models, reduction in environmental liability, risks and costs, improvement of organizational brand and legal compliance, among others (Bevilacqua et al., 2007; ISO, 2011, 2002; Pigosso et al., 2013; Plouffe et al., 2011; Van Hemel and Cramer, 2002) (Rodrigues et al., 2016, p.417).

In conclusion, the circular economy model requires organizational changes, mainly in production and consumption systems, and transforms the way companies do business.

Sandra Liliana Palacio-Vélez.

Department of Organizations and Management,

School of Management,

Universidad EAFIT,

Cra 49 No 7 sur 50, Medellín, Colombia

Email: spalaci2@eafit.edu.co

References

Ashton, W.S., Hurtado-Martin, M., Anid, N.M., Khalili, N.R., Panero, M.A., & McPherson, S. (2017). Pathways to cleaner production in the Americas I: bridging industry-academia gaps in the transition to sustainability. Journal of Cleaner Production, 142, 432-444.

Ghisellini, P., Cialani, C., & Ulgiati, S. (2016). A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114(15), 11-32. http://dx.doi.org/10.1016/j.jclepro.2015.09.007

Rodrigues, V.P., Pigosso, D.C.A. & McAloone, T.C. (2016). Process-related key performance indicators for measuring sustainability performance of ecodesign implementation into product development. Journal of Cleaner Production, 139, 416-428.

[i] Sandra is Professor at Universidad EAFIT, Colombia within the Department of Organization and Management. She is currently completing her PhD in Strategic Business Administration at CENTRUM, Pontificia Universidad Catolica de Peru. She has wide experience in Circular Economy, recycling and waste management projects.