International Strategic Management Assignment Sample
Introduction:
Economy system is an important part to keep the environment free from pollution. There are two types of economy system one is linear economy system and another is circular economy system. Linear economy system is based on the principle of take, make, and waste. According to the principle, raw materials are taken from the environment and these materials are used for production and after production all of goods are distributed among consumers. Finally, after the use of products wastage products go for landfill. Landfill by wastage products increases environment pollution. As well as carbon dioxide production is increased and greenhouse gas emission also increased. As a result, it impacts on the biodiversity and ecosystem of the world. So, linear economy system has a negative impact on the environment. Manufacturer follow the linear economy system as the costing price of linear economy is lower than circular economy system (Sillanpääand Ncibi, 2019).
Besides the linear economy system there is circular economy system. The circular economy system is a model of “production and consumption.” The “model of production and consumption” is included with different factors such as sharing, leasing, reusing, repairing, refurbishing and recycling existing materials as long as require. By the process of circular economy system natural resources are taken for production and after the production, all gods are distributed among consumers. After the use of products, wastage materials are taken for reuse, recycle, and repair method. By the process of recycle of wastage materials reduce greenhouse gas production as well as reduce carbon dioxide gas production. Comparing with linear economy, circular economy has positive impact on the environment. All the manufacturer should choose circular economy for production. The production processeshelp to develop the environment as well as reduce carbon dioxide gas emission and reduce greenhouse gas emission. So, circular economy has positive impact on the environment. The aim of the circular economy is to take challenges to tackle the climate change, biodiversity, waste and pollution. During the production, increase carbon dioxide gas emission and also increase greenhouse gas emission. It impacts on the global climate as well as impacts on the ecosystem and biodiversity. The government and manufacturer should take act to transfer from the linear economy to circular economy. Transformation from the linear economy to circular economy has positive impact on the environment. It helps to reduce carbon dioxide emission as well as reduce greenhouse gas emission (Sariatli, 2017).
For example, plastics are used for the packaging and other production. By the recycling process, plastics are transferred to pellets and theses pellets are used for other production. Another process is that, electronic repair process. Electronic goods are produced and after use of products wastage materials are taken for repair process. Repair process helps to reduce environment pollution as well as reduce carbon dioxide gas emission. The aim of the study is to analysis the strategies to move from the linear economy to a circular economy and the impacts of economy on environment.
Discussion:
Economy system has a significant role to keep the environment free from pollution. Most of eth manufacturer follow the linear economy that increase the environment pollution. As well as biodiversity and ecosystem are hampered by linear economy. The principle of linear economy is based on take, make, and waste. By the process of linear economy natural resources are taken for the production and after production goods are distributed between consumers. After the use of products, wastage materials are taken for landfill. Landfill increases the environment pollution such as increase the level of carbon and greenhouse gas emission. So, linear economy has negative impact on the environment.
The government and manufacturer should take specific action to transform from the linear economy to circular economy. Circular economy is based on the principle of production and consumption. Circular economy is based on sharing, leasing, reusing, repairing, refurbishing and recycling existing materials as long as require. Circular economy has advantage to keep the environment free from pollution. Circular economy reduces the level of carbon as well as reduce the level of greenhouse gas emission. So, manufacture and government should take act to transfer from the linear economy to circular economy. Circular economy has positive impact on the environment (van der Heijdenet al., 2017).
Fig 1: circular economy
(source: Teresa Domenech, 2014)
Cycles of economy:
There are two types of economy such as biological economy and another is technological economy.
Biological cycle:
Biological cycle has a significant role to keep balance ecosystem and biodiversity. According to the biological cycle, nutrients are supplied from soil to plants. After that animals take plant as food and human takes animal for food. Finally, after the death of human all components are go to soil. By anaerobic process, biodegradation is occurred and wastage materials goes to soil that develop the quality of soil. Biological cycle keeps the balance of ecosystem and biodiversity (Loneet al., 2018).
Technical cycle:
Besides the biological cycle, technical cycle has a significant role to keep the environment free from pollution. As well as reduce the level of carbon and greenhouse gas emission. By the technical cycle, materials are used for production of goods. After completing the production of goods that are distributed to consumers. After the use of products, wastage materials are taken for recycling process and by the process new products are produced. So, the technical cycle helps to develop the new products with new technology that keeps the environment free from pollution. As a result, biodiversity and ecosystem is balanced. So, the technical process has a significant role to reduce the level of carbon and reduce the level of greenhouse gas emission.
Fig 2: biological cycle and technical cycle
(Source: Researchgate.net, 2021)
Biological cycle and technical cycle have positive impact on the environment that keeps the balance of biodiversity and ecosystem of the world.
Impacts of circular economy on biodiversity:
Eliminate waste and pollution:
Circular economy is designed to eliminate waste and pollution form the environment. As a result, threat of biodiversity is reduced. For example, plastics are used for packaging and other purpose. Plastics are produced and increases the pollution of environment. According to the circular economy, after use of plastics the wastage materials are taken for recycling. By the recycling process, plastics are transferred to pellets and pellets are used for other production purpose. As a result, eliminate the environment pollution and also eliminate waste from environment (Sariatli, 2017).
Circulation of products and materials:
By the circular economy materials and products are circulating. For production, materials are used and produced different types of products after the use of product materials are take for recycling and reuse. For example, in the fashion industry cotton is used for production of cloths. The cotton products are going for a long time. So, cotton production is not needed any more. Circular economy helps to circulate materials and products that reduce the environment pollution and reduce the wastage of products. So, circulation of materials and products eliminate pollution and waste that keep the balance of biodiversity.
Regenerate of nature:
Economic activity has a major role to keep balance of biodiversity. By the biological cycle materials and nutrients are circulated from soil to human and waste materials circulate from human to soil to human. By anaerobic process, biodegradation is occurred and reduce the landfill. For example, regenerative agriculture process helps to develop the quality of soil. agroecology, agroforestry, and managed grazing, sequester carbon in soil improve the quality of soil. As a result, the agriculture field becomes productive rather than degradation the quality of agriculture field. By the process, regenerate the resources of nature. Biodiversity has a significant role to develop a healthy environment (Didenkoet al., 2018).
Cities and circular economy:
Cities are the curial for circular economy. Cities consumed a large percentage of resources, capital, data, and talent. By the year 2050, cities will consume 75% of the world’s natural resources, 50% of waste materials are produced by cities, 60% greenhouse gas emission will be increased by cities. In the urban area, develop the manufacturing, fashion, food, transportation, and production. It has long term impacts on economy, society, and environment. Innovative and advanced technology should be used by the builders to reduce the pollution and waste from environment.
Impacts of circular economy on climate change:
Industry, agriculture industry and other production increases the level of carbon emission and the level of greenhouse gas emission. By the year 2050, 55% of greenhouse gas emission is increased. 45% of greenhouse gas emission is produced by industry, agriculture industry, and use of land. Natural resources are used for production that increases carbon emission and greenhouse gas emission. Circular economy has a significant role to reduce the level of greenhouse gas emission (Shuklaet al., 2018). The process to reduce greenhouse gas by circular economy is that:
- During the production process, eliminate waste and pollution by use of waste materials for production.
- For new production process, greenhouse gas emission is increased so, retain materials for production that reduce the greenhouse gas emission.
- Regenerating process helps to reduce the environment pollution. By the regenerating process carbon is stored into soil and it helps to develop the quality of soil.
During production, construction and manufacturing increase the level of carbon and greenhouse gas emission. So, manufacturer should rethink regarding circular economy that reduce the environment pollution as well as keep the balance of biodiversity.
Circular economy for plastic production and recycling:
Plastics are threat for biodiversity. Environment is polluted by plastics and destroy the ecosystem. Circular economy has major role to reduce plastic pollution. Plastic pollution has a strong impact on social, economy, and environment. By the year of 2040, circular economy has potential function to overcome challenges such as:
- Reduce the annual volume of plastic to ocean by 80%.
- Greenhouse gas emission is reduced by 25%.
- Saving of natural resources by USD 200bn per year.
- 700,000 new jobs are created by the circular economy system.
There are three actions to transform of plastic by circular economy:
Eliminate: Eliminate the unnecessary use of plastic that reduce environment pollution.
Innovate:
By the innovative technology reusable plastics are produced. Consumers should be aware about the use plastics that have properties of reuse, recycle, and composable. These innovative technology helps to reduce environment pollution and reduce the emission of carbon as well as reduce greenhouse gas emission (Ellenmacarthurfoundation.org, 2021).
Circulate:
Plastics need to be used only for economy development and keep away from environment.
Circular economy for food system:
Regenerate food production:
Regeneration of food production is essential to keep the balance of biodiversity. Biofertilizers should be used for soil that increases the quality of soil. Stable soil helps to grow healthy plant and provides natural resources to human. By biological process, plants get nutrient from soil and human get nutrient from plant. After the death of human, it goes into soil and increase the quality of soil. By the circular economy, food production is regenerated that keeps the balance of biodiversity (Ivanova, 2020).
Eliminate food waste:
Consumers should aware regarding eliminate of food waste. Consumers should distribute the extra food to other people that eliminate food waste. Eliminate of food waste keep t6eh environment healthy and free from pollution.
Circular fashion industry:
Fashion industry has a significant role to keep the balance of biodiversity. Fashion industry has a great impact on biodiversity loss, climate change, and pollution.
Some factors are essential in fashion industry such as:
- More use of products.
- Make products again and again.
- Safe, recycled, and renewable products should be used by the fashion industry (Koszewska, 2018).
Advantages of circular economy:
Circular economy has different advantages on the environment. There are different types of advantages such as:
Reduce the level of greenhouse gas:
By the process of circular economy, natural resources are taken for production and after use of products wastage are taken for recycling. So, environment pollution is reduced and reduce the level of carbon. By the process of circular economy, reuse and recycling methods are followed so, circular economy has positive impact on the environment.
Increase the quality of soil:
Nutrients are taken from soil and supplied to plant after the consumption of nutrients wastage materials goes to soil that increases the level of nutrient of soil. By anaerobic method wastages are biodegraded and form into different small particles of nutrients that helps to develop the quality of soil. So, circular process has a significant role to develop the quality of soil. Good quality of soil keeps the balance of ecosystem and biodiversity of the world (Govindanand Hasanagic, 2018).
Increase the potential of economic growth:
For the circular economy, cheap materials are used for new production. As well as recycling and repairing process develop the products quality. Manufacturer used wastage materials for the production of new goods that increase the potential economic growth.
Resources are saved:
Natural materials are used for production by linear economy. By the process, natural resources are used and after certain time period, natural resources are finished. So, linear economy has disadvantages to the environment. The circular economy system takes natural resources and used these materials for production. After the use of products wastage materials are taken for recycling that helps to save resources. Save of resources keep the balance of biodiversity and ecosystem of environment. So, circular economy has a significant role to save resources.
Growth of employment:
Innovative technology and advanced processes are used for production of goods. For the production of good quality of product, skilled employees are needed. So, employment rate is increased by the process of circular economy system.
Develop new opportunities:
Circular economy is used for production of quality products. Cut of cost is the advantage to make opportunity. Waste and energy reduction develop opportunities and make profit in the production system.
Demand of new services:
According to the report of Ellen McArthur’s Foundation, circular model has new job opportunities and demand of new services such as:
- Collection and reverse logistic companies support to use of wastage materials and reintroduce the product.
- Remanufacturing and refurbishment of products helps to develop knowledge to workers.
- Sales platform provides the opportunity to introduce products to consumers and develop the opportunities to introduce products to consumers.
Fig 3: Ellen MacArthurfoundation
(Source: Ellen MacArthurfoundation.org, 2021)
Barriers of circular economy:
Economic barrier:
Social and environmental externalities:
Social and environmental externalities are not considered as price. Financial market should give importance to environment to keep the balance of biodiversity and keep the environment free from pollution (Galvãoet al., 2018).
Price of product:
Advanced technology is used for production of new products. The price of raw material is high so, the production process is high that increase the price of product. Low price of materials decreases the quality of products.
Demand of product:
By the circular economy, product price is increased. According to the price of product, demand of products is decreased. So, demand of product is barrier for circular economy system.
Lack of skilled employee:
For the production by circular economy skilled employees are needed. Products are produced by the advanced technology is used for production. so, experienced workers are needed for development of products. So, lack of skilled employee is barrier of circular economy.
Investor:
Advanced technology and instruments are used for the production by circular economy. A large amount of investment is needed to develop the production of quality goods. So, investors are needed to develop products and quality of products. Lack of investor is the barrier of circular economy.
Institutional barrier:
Besides the economic barrier, institutional barrier is another factor to develop the products. some factors are related with institutional barriers such as:
- Gross domestic product not consider as social and environmental externalities. Discouraging of creation impacts on the social economy.
- New business does not follow the rules and regulation that impacts on innovation. Lack of innovation is the barrier of circular economy.
- Many companies focus on the short-term production. So, cheap materials are used for production and it impacts on the environment pollution. To compromise with product price, cheap materials are used that increases carbon emission as well as increase greenhouse gas emission.
Conclusion:
From the study, it is concluded that linear economy has negative impact on the environment and circular economy has positive impact on the environment. Linear economy is based on the principle of take, make, and waste. Natural resources are taken to produce products and the production of goods these are distributed among consumers. At the end waste materials are taken for landfill. As a result, environment pollution is increased as well as emission of carbon and greenhouse gas production is increased. So, linear economy has disadvantages on the environment. On the other side, circular economy has a significant role to reduce the level of carbon emission and greenhouse gas emission. Circular economy is based on the principle of production and consumption. By the process of circular economy, natural resources are collected and used for production. After production of goods these are distributed among consumers. After the use of product, waste materials are taken for reuse, recycle and repair. By the biological cycle, energy is circulated from soil to air and again the energy circulates from air to soil. By the process, keeps the balance of biodiversity and ecosystem. Circular economy helps to reduce the environment pollution. The aim of circular economy is to take challenge to tackle the climate change, pollution, biodiversity and waste. As a result, keep the balance of biodiversity and keep health environment. During the production, manufacture and construction a large amount of carbon is emitted that impacts on the environment and increase the level of greenhouse gas. So, all of the manufacturer and government should take appropriate action to develop the environment and free from pollution. The transformation process from linear economy to circular economy is essential to keep the environment free from pollution and keep the balance of biodiversity. There are different barriers of circular economy such as the price of raw material is high that increases the price of product as well as skilled employee is essential to develop the product. Finally, circular economy keeps the environment free from pollution and keep the balance of biodiversity.
Reference:
Didenko, N.I., Klochkov, Y.S. and Skripnuk, D.F., 2018. Ecological criteria for comparing linear and circular economies. Resources, 7(3), p.48.
Ellenmacarthurfoundation.org, 2021, circular economy, available at: https://www.ellenmacarthurfoundation.org/circular-economy/concept
Galvão, G.D.A., de Nadae, J., Clemente, D.H., Chinen, G. and de Carvalho, M.M., 2018. Circular economy: overview of barriers. Procedia CIRP, 73, pp.79-85.
Govindan, K. and Hasanagic, M., 2018. A systematic review on drivers, barriers, and practices towards circular economy: a supply chain perspective. International Journal of Production Research, 56(1-2), pp.278-311.
Ivanova, V., 2020. Circular Economy: Barriers and Levers Promoting Transformation (Case Study Analysis). Management and Business Research Quarterly, 16, pp.14-28.
Koszewska, M., 2018. Circular economy—Challenges for the textile and clothing industry. Autex Research Journal, 18(4), pp.337-347.
Lone, P.A., Dar, J.A., Subashree, K., Raha, D., Pandey, P.K., Ray, T., Khare, P.K. and Khan, M.L., 2019. Impact of plant invasion on physical, chemical and biological aspects of ecosystems: A review. Tropical Plant Research, 6(3), pp.528-544.
Sariatli, F., 2017. Linear economy versus circular economy: A comparative and analyzer study for optimization of economy for sustainability. Visegrad Journal on Bioeconomy and Sustainable Development, 6(1), pp.31-34.
Sariatli, F., 2017. Linear economy versus circular economy: A comparative and analyzer study for optimization of economy for sustainability. Visegrad Journal on Bioeconomy and Sustainable Development, 6(1), pp.31-34.
Shukla, P.R., Skea, J., Calvo Buendia, E., Masson-Delmotte, V., Pörtner, H.O., Roberts, D.C., Zhai, P., Slade, R., Connors, S., Van Diemen, R. and Ferrat, M., 2019. IPCC, 2019: Climate Change and Land: an IPCC special report on climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems.
Sillanpää, M. and Ncibi, C., 2019. The circular economy: Case studies about the transition from the linear economy. Academic Press.
van der Heijden, R.E.C.M., Coenen, J.W.E. and van Riel, A.C.R., 2017. Transitioning from a linear economy towards a circular economy: The case of the apparel industry.
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