Lao PDR plans to use circular economy principles to open greenhouse gas mitigation opportunities which are additional to those which are typically covered under the Paris Agreement. By leveraging the circular economy and seeking international cooperation to reduce the embedded emissions of products which cross its borders, the country could perhaps aim for carbon neutrality.
The circular economy in Lao PDR
The government of Lao PDR is one of the frontrunners in the region on circular economy, and has already prepared an initial circular economy options assessment in 2016-17 under a UNDP supported project. At the World Circular Economy Forum in 2019, Lao PDR specified the circular economy as a ‘game changer’ for its 9th five-year socio-economic development plan for 2021 to 2025.
The circular economy is an economic concept that aims to decouple economic growth from resource use, making material use regenerative, rather than depletive. It does so by proposing strategies which optimise the use of existing assets and materials, thereby reducing the use of primary materials and lowering the output of harmful waste which degrades natural assets. By focussing on what’s already available, and altering the design of new products and assets, the circular economy concept can help Lao PDR define a development pathway which diversifies the economy, reduces its reliance on imports and inspires private sector growth based on the ‘mining’ of secondary materials, rather than delving ever deeper into natural resources.
The circular economy not only reduces resource consumption and waste generation, but it can also significantly contribute to a reduction in greenhouse gas emissions, while at the same time providing new
types of employment.
At the heart of Southeast Asia
Lao PDR is strategically located in the heart of Southeast Asia and is a vital organ in the regional economic tissue. It supplies its own industries and consumers with food and resources, while also exporting large volumes of crucial raw materials to surrounding countries.
Lao PDR is also a country with abundant natural resources. Its fertile soils support large forestry and agricultural systems and the country also has significant deposits of gold, copper, zinc, lead, tin, iron, aluminium, potash, limestone, gypsum and coal. Located on the crossroads of three major Asian economies: China, Vietnam and Thailand, Lao PDR is surrounded by large and demanding markets. It serves these mostly with the extraction and export of raw materials, like metal ores and wood. This causes landscape degradation, deforestation, biodiversity loss and, due to the chemicals used in the metal extraction process, surface water pollution.
The government of Lao PDR is one of the frontrunners in the region on circular economy, and has already prepared an initial circular economy options assessment in 2016-17 under a UNDP supported project. In addition to the previous UNDP circular economy assessment, there have been a number of other recent circular economy related initiatives in the country. The Global Green Growth Institute (GGGI) conducted a Green Growth Potential Assessment Report for Lao PDR in 2017 and the Department of Industry and Handicraft at the Ministry of Industry and Commerce are developing a regulation on Green Industry so as to promote manufacturers to adopt green technology and practices. A local NGO, Green Vientiane, are also in early stage talks with the Lao Youth Union and the UN about developing a roadmap for sustainable waste management and recycling in Lao PDR.
The “Lao PDR Circular Economy Consultancy Project” is supported by UNDP through its NDC Support programme and UNDP’s Climate Promise initiative. The project aims to provide insight in resource flows and assets in Lao PDR. Analysing these as a system, reveals opportunities for resource and energy efficiency through the application of circular economy strategies. Since all materials have a carbon footprint, more efficient use of materials will reduce greenhouse gas emissions within the country and perhaps also in the countries which supply Lao PDR with valuable products and materials. That mitigation potential can be reflected in the Nationally Determined Contribution of Lao PDR, as a way to accelerate the transition to a net zero carbon economy, and perhaps leverage climate finance to implement circular economy initiatives.
The circular economy can identify opportunities for Lao PDR to:
- Reduce reliance on imports of raw materials and improving the trade balance
- Move to a higher value tertiary economy with more sophisticated manufacturing / industry and associated skill developments in the local workforce
- Gain access to new higher value global markets for sustainable products.
The objective of the project is two-fold. On the one hand the project aims to support Lao PDR in its circular, low-carbon ambitions and translate these into a realistic commitment to the Paris Agreement and a practical long-term strategy. On the other hand, the project aims to create an active Community of Practice with a commitment to realise pilots which showcase the potential of specific circular economy practice.
Partners: Earth Systems, Rebelgroup, Circle Economy