Shifting Paradigms launches a metabolic analysis for Almaty region, to identify and support circular economy concepts in an emerging, transition economy and encourage replication throughout Central-Asia.
Shifting Paradigms, with support from the Center for Sustainable Production and Consumption, Circle Economy and Fabrications will visualise the regions’ metabolism by mapping major resource flows and connecting them with the services which they provide to society. This will be the basis for an interactive process with private, governmental and academic stakeholder to identify levers for change.
Almaty as a regional frontrunner
Kazakhstan is a major supplier of raw materials, and therefore appears at the very beginning of many global supply chains. Almaty is the trading centre for the large variety of natural resources which are extracted in the country. It’s location on a transport hub which connects China with Central Asia and Russia, will make it an important station on the One Belt, One Road initiative. It is also the largest city in Central Asia and an example for other cities in the regio. As a city challenged by environmental issues, of which air quality, waste management and water scarcity are the most pressing, it has sustainable development high on the agenda. To address these issues, it launched an open consultation process to continuously refine its development ambitions for 2020 (called ‘Almaty 2020’). This project will contribute to this dialogue, and aims to inspire the current reform of the national green growth strategy and environmental legislation.
Kazakhstan has a wealth of natural resources. Its dependence on resource rents, the export of raw materials are an important source of income, exposes the country to changes in commodity prices, in particular oil. With the oil prices decreasing throughout 2014 and 2015, GDP declined with 42%.
To improve resilience of the economy, the World Bank called for a reduction in the role of the state in the economy, and foster the emergence of sectors beyond oil. The central location of Kazakhstan in between China, Russia and other countries in Central Asia, and on existing and planned international transport arteries are a major opportunity for the country and for Almaty in particular. Other competitive advantages are its access to hydropower resources, its
agricultural potential for developing a bio-based economy and its capacity to process a broad range of metals and minerals.
The critical development challenges for Kazakhstan are:
- its heavy reliance on temporary resource rents from oil exports to stimulate economic growth;
- raw material exports which prevents the growth of local industry;
- water scarcity.
Kazakhstan has high ambitions for green growth. This year 2018, the country is revising its green growth strategy and environmental code. The circular economy concept had been hardly considered when the current green growth strategy was adopted in 2013. Together with partner organisations which support these legislative developments, the project team will demonstrate how circular economy concepts can contribute to the national green growth ambitions. This activity will build on the experience of the team with circular economy policies (SP, 2017).
Circular economy and global resource use
The linear use of resources, whereby materials are extracted, used once and then disposed of, still dominates 90% of global resource use (SP, 2018). This prevents progress on the Sustainable Development Goals, and exacerbates pressing issues like climate change, the dispersement of plastics in oceans, eutrophication and pollution of clear water.
Improving the resource efficiency of economies with circular economy strategies is a promising way to shape low-carbon and resource efficient development. Greenhouse gas emissions and material management are closely related since at least 67% of global greenhouse gas emissions stem from the mostly linear chain or extraction-production-consumption and disposal of materials and goods (SP, 2018).
To feed a predominantly linear global economy, 84 billion tonnes of resources were extracted in 2015, excluding water. Between 1970 and 2010, global material extraction tripled, and population and economic growth are expected to push this figure to 186 billion tonnes per year by 2050 (IRP, 2017).
Reducing the material footprint of a city requires a proper understanding of the relevant value chains, and the economic fabric which the city is part of. Circular economy opportunities can reduce material use and emissions all the way up to the processing and manufacturing industries, fields, forests, wells and mines from which its raw materials and products originate. Identifying these opportunities requires a systems approach in which resource flows within Almaty city, as well as the surrounding oblast are mapped. It also requires looking beyond the physical product which an industry delivers, into the service which it provides to society, through its product, as an employer and as a vital element in a broader socio-metabolic tissue.
Circular economy strategies can decouple economic growth from resource use, making material use regenerative, rather than depletive. It does that by proposing strategies which reduce the input of virgin materials, improve the use of existing assets and reduce
the output of harmful waste. Circular economy is an opportunity for Kazakhstan to define a development pathway which relies on improving the efficiency of resources and assets which the country already has available. It can also inspire private sector growth which relies on the ‘mining’ of secondary materials, rather than delving deeper into primary natural resources.
The project will support Almaty to define circular economy strategies which enable resilient economic development by combining growth with reducing greenhouse gas emissions, making more efficient use of existing resources and assets.
Circular economy in different geographical contexts
The focus of circular economy strategy development so far, has been on Europe, China and India. The concept has insufficiently been promoted in developing countries. The developing country context is fundamentally different from the OECD context since:
- Developing countries have an opportunity to leapfrog progress, avoid the linear lock-in which OECD countries face.
- Developing countries accumulate large amounts of resources to build their infrastructure, these resources are stored in resource stocks and will only be released after tens of years.
- Their markets are not saturated like many markets in OECD countries. For example, car fleets are expanding, whereas in many OECD countries they keep pace with population development or even decline.
- Often labour costs and wages are relatively low compared to the prices of resources.
- Circular business opportunities might help circumvent issues with the enforcement of environmental laws.
- Circular economy strategies can be labour intensive, and represent an opportunity to involve the base of the pyramid and consider the informal sector, if labour conditions are safeguarded.
This project can contribute to gaining experience with circular economy strategies in the context of a country with an economy in transition, with the potential for replication to other, similar countries and cities.
Client: Emerging Markets Sustainability Dialogue Challenge Fund
Partners: Circle Economy; Center for Sustainable Production and Consumption in Kazakhstan; Fabrications
Advisory team: Almaty Municipality, UNDP, UN Environment, Asian Development Bank, European Bank for Reconstruction and Development, Kazakhstan Business Counsil for Sustainable Development, Almaty Chamber of Commerce, EU Delegation in Kazakhstan, Waste Management Company Tartyp