Circular Economy: An Economic Alternative for A Liveable World
Climate change is happening all around us. This has an impact on almost all aspects of human life. Therefore, we must act from now on. We can take initiatives to act on climate change issues from various sectors and aspects of life, including the economy, through the application of the circular economy.
What is a circular economy? Based on the understanding of the World Economic Forum, a circular economy is an industrial system that is designed to be restorative or regenerative. It replaces the end-of-life idea with restoration, changes to renewable energy, eliminates harmful compounds that impede reuse and return to the biosphere, and strives for waste elimination through the superior design of materials, products, systems, and business models.
Many countries have started implementing a circular economy, including Indonesia. Minister of National Development Planning of the Republic of Indonesia, Suharso Monoarfa, explained that the circular economy is important in economic recovery and social reform. "The implementation of the circular economy is expected to be one of the strategic policies and breakthroughs to rebuild a more resilient Indonesia after Covid-19, through the creation of green jobs and increasing process efficiency by optimizing the use of resources," said Suharso Monoarfa.
On the other side, the Report “The Economic, Social, and Environmental Benefits of Circular Economy in Indonesia” was released in collaboration with the Ministry of National Development Planning of the Republic of Indonesia, Denmark, and UNDP and it was the first stage in the development of a circular economy in Indonesia. In addition, the term circular economy has also been included in the narration of the 2020-2024 National Medium-Term Development Plan (RPJMN) in the economic, infrastructure, and environmental sectors. This target will be further emphasized in the RPJMN 2025-2029.
The potential for implementing a circular economy in Indonesia will have a massive impact on the environment if it is successfully implemented at the grassroots level. According to the Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia, MSMEs in Indonesia contributes 60% of Indonesia's GDP. In 2018, the number of MSMEs in Indonesia reached 64.2 million and continues to increase every year. Seeing the large number and influence of MSMEs in Indonesia, especially in the economic sector, the implementation of a circular economy must be encouraged from now on, so that all sectors help create a better environment in the future.
However, the challenge at this time is the training assistance provided to small and medium-sized enterprises based on the environment is still very limited, especially in ensuring business continuity and protecting the innovations that have been created.
FNF Indonesia as an organization that raises the awareness and action regarding climate change and social market economy – a socioeconomic model that combines liberalism with social policy – sees the issue of circular economy and sustainable consumption and production as issues that are closely related to the values of liberalism which are reflected in the form of climate justice and the social market economy. The application of a circular economy is one great initiative that could answer the challenges related to the fulfillment of human rights and justice by creating a meaningful impact on vulnerable communities. On the other hand, the circular economy can be seen as a form of a social market economy that not only applies economic freedom but also has a social impact. Thus, the circular economy is one approach that provides social, economic, and environmental benefits. Considering the positive impacts of circular economy, FNF Indonesia, in collaboration with the Ministry of Law and Human Rights of the Republic of Indonesia, Climate Institute, Greeneration Indonesia alongside Ecoxyztem held a Circular Jumpstart, a workshop for MSMEs to provide training and learning about the circular economy.
This workshop took place on June 5 – July 22, 2021, with the theme “Towards Smart and Sustainable Cities through Circular Practice” and was attended by 15 selected start-ups coming with various ideas and businesses. The resource persons for the workshop also came from various backgrounds; from the non-profit, profits, governments, and the well-known start-ups or investors in Indonesia. To make sure the progress of the workshop, selected resource persons were also available as mentors and helping the participants to develop their business plan towards circularity. The participants participated in 10 incubation activities with different themes that helped startups to build their businesses, such as products and business ideas; legal aspects and business foundations; capital and investment; and others. With the establishment of various digital platforms, whether it is formal setting through webinars or informal setting through LinkedIn Group chat, the participants were able to conduct wide and extensive discussions about sustainability and its relevancy for business development.
At the end of the activity, the participants would present a pitch-style presentation to tell their business and how they develop and answer environmental problems. This presentation is also an opportunity for participants to collaborate in the future. The presentation was held on 22 July 2021 and was judged by judges from various backgrounds.
Based on the judges' assessment, the first winner of Circular Jumpstart was Turtlesafe, startup that produce household cleaning products in form of effervescent tablets to help housewives prevent the usage of single-time plastic usage from conventional cleaning products. And the runners-up were SCI / Litecon, a waste-tech company focused on research and development of eco-friendly building materials from industrial waste (waste-to-product); and Robries, startup that produce innovative and valuable products by exploring plastic waste as new material and turning it into a good value product, starting from managing the waste until production and distribution. In addition, the favorite winner of the Circular Jumpstart Video competition was won by Qyos, startup that provide a smart refill vending machine system for fast-moving consumer goods products, enabling customers to conveniently buy the products through refill at affordable prices.
Seeing the enthusiasm of the participants in the Circular Jumpstart workshop and the Indonesian government's initiatives related to the circular economy, the future of the circular economy in Indonesia looks bright. At the end of the day, to achieve success in creating a circular economy that is comprehensive and has an impact on all parties, of course, requires collaborative efforts from all parties. Therefore, it is hoped that Circular Jumpstart can be a catalyst for circular economy training and learning for Indonesia in the future.
*This contributed article is written by Arief Balie, who works as an intern for Climate Project in FNF Indonesia.