Economy

Circular economy might uplift Indonesia’s GDP by U$45 billion by 2030

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Adopting a circular economy in Indonesia’s key sectors might add between Rp 593 trillion (US$42.2 billion) and Rp 638 trillion to the country’s gross domestic product (GDP) by 2030, a report finds, stating that doing so will also support the government’s efforts to recover the economy after the Covid-19 crisis.

Potential Rp642 trillion GDP uplift from Circular Economy

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Laporan terbaru Kementerian PPN/Bappenas berjudul The Economic, Social and Environmental Benefits of A Circular Economy in Indonesia mengungkap potensi penerapan ekonomi sirkular di lima sektor industri mampu menambah Produk Domestik Bruto (PDB) hingga Rp642 triliun.

Making retail more sustainable

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SIKLUS has created a solution for sachet problem in Indonesia, which is a Refill System especially for household items such as detergents, shampoo, soap. Customers buys in container which saves them money until 10%. Siklus partnered with local business owners by providing refill stations in their store, as well as providing mobile refill trycycles for end-customers.

The Circular Economy Agenda in Indonesia

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Indonesia still need a more robust and firm strategy and action plan to implement the Circular Economy. It is critical to bring together leaders across industry, government, and civil society to shift the global economy more aggressively toward the circular economy, and Through build back better, we can build a more resilience circular economy concept that could maintain economic growth in a long term.

Supporting Indonesia in Developing a National Circular Economy Strategy

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Indonesia’s National Circular Economy Roadmap aims to create a clear strategy to help capture the benefits of a circular economy. Indonesia focus on 5 key areas of the Indonesian economy with high potential for circularity that can solve many of Indonesia’s problems. Where adoption of the identified circular economy opportunities could reduce waste generation in each sector by anywhere from 28-57% by 2030.

How to Build a Circular Economy

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We have a waste problem.

The world threw away around 300 million tons of plastic in 2019, nearly equivalent to the weight of the human population. Scientists expect there could be more plastic than fish in the ocean by 2050. One year’s electronic waste weighs in at more than 50 million tons. And while far too many people still go hungry, we waste a third of all the food produced.

Altogether, more than 100 billion tons of resources flow into the economy every year, and more than 60% ends up as waste or greenhouse gas emissions.
While COVID-19 made a significant dent in global consumption, it’s not a clear-cut picture. Clothing sales plummeted, but home office and exercise equipment purchases went up; spending in the hospitality industry went down, but groceries increased. The use of single-use plastics increased significantly, while plummeting oil prices reduced the economic incentive for plastic recycling.

The 2008 recession showed us that any fall in consumption is likely to be temporary without a concerted effort to make longer-term changes.

Can Indonesia establish a circular economy?

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As a member of the international community, Indonesia needs to play an active role in ensuring global sustainability. The alarming threat of climate change should be a concern for every country. A comprehensive transformation to a circular economy might be the answer to this dire situation. We believe now is really the time for the Indonesian government to start designing a comprehensive policy reform that changes its economic approach, from linear to circular. It must strategically think about ensuring that this policy is built on a circular economy and work together with related stakeholders for its successful implementation.

The concept of a circular economy focuses on redesigning waste to create other valuable goods to use; replacing the concept of take-make-waste (linear economy), so that the economy eventually produces zero waste. According to management consulting firm McKinsey, the circular economy represents a net materials cost savings opportunity of US$340 to US$380 billion in the European Union’s (EU) automotive and other transport sectors. In the fast-moving consumer goods sector, material savings could represent as much as 20 percent of materials input costs incurred by the consumer goods industry at the global level or equal to approximately US$700 billion or 1.1 percent of global gross domestic product (GDP).