Green Economy and Circular Economy Models | 21 Feb 2025

What is the Green Economy?

• The Green Economy concept highlights the shift from fossil fuel dependency to a low-carbon economy, aiming for net-zero emissions by embracing clean technologies. 
  • The economy focuses on sustainability, inclusivity, and long-term growth, leveraging technology to address climate challenges.  
• India’s transition to green energy (e.g., increasing renewable energy sources) and job creation via distributed energy and green tech (solar, wind, electric mobility) are its key components. 
• The green economy embraces the circular economy model, aiming for sustainability through waste reduction and the reuse of resources. This involves electronic waste management, end-of-life vehicles, and toxic waste recycling initiatives.  

What are the Challenges in India’s Transition Towards a Green Economy?  

• Pollution Control: Despite the launch of the National Clean Air Programme (NCAP), pollution levels in many cities have seen only marginal improvements. The lack of sufficient state-level funding and weak enforcement of environmental regulations are key challenges in reducing air pollution and improving air quality . 
• Energy, Climate, and Growth: India faces significant challenges due to its continued reliance on fossil fuels and coal. The country’s energy security and access to clean energy are key roadblocks. Transitioning to renewable energy is hindered by financial constraints, technology gaps, and a lack of infrastructure.  
  • Additionally, climate change adaptation requires heavy investment in infrastructure to cope with extreme weather events, which disproportionately affect developing countries like India . 
• Inconsistent Fuel Blending: India has set a target to increase the ethanol blending ratio to 20% by 2025, but progress is slow due to inconsistent ethanol availability, especially in regions far from production centers. The lack of infrastructure to support biofuel adoption further hampers progress . 
• Economic Disruptions: The global shift towards slowbalization (slowing of the process of globalization) presents challenges for India, as trade restrictions and geopolitical tensions (such as the US-China trade war disrupt the supply chain for green technologies. India’s manufacturing sector is still underdeveloped, limiting its capacity to fully participate in the global green economy . 
• Challenges in Transitioning the Workforce: The shift from carbon-intensive industries to green sectors threatens millions of jobs, particularly in coal-dependent states like Jharkhand and Chhattisgarh.  
  • Accelerated decarbonisation could transform over 30 million jobs by 2050. The absence of robust skill development programs hampers the ability of workers to transition to green jobs. 

What  Steps are Needed to Accelerate Transitioning Towards a Green Economy?  

• Energy, Climate, Growth: India can enhance its focus on carbon pricing and implement innovative policies such as smart grids and carbon markets to drive the transition to renewable energy. This should include the expansion of solar PV and wind energy capacity, backed by green financing initiatives.  
• Enhancing Domestic Manufacturing for Green Technologies: Promoting local manufacturing of solar panels, wind turbines, and energy storage systems through the Production-Linked Incentive (PLI) Scheme can reduce dependence on imports. 
  • This aligns with India’s goal to produce 110 GW of solar module manufacturing capacity by 2025-26, minimizing reliance on Chinese imports. 
  • Coupling this with the Make in India initiative can drive job creation and green industrialization. 
• Battery Swapping and Electric Vehicles (EVs): The introduction of a battery swapping policy will facilitate the growth of the electric vehicle (EV) market, addressing challenges like charging infrastructure and charging anxiety. This policy is aimed at increasing the use of electric mobility in public transport and goods delivery, thus reducing emissions from the transport sector . 
• Circular Economy and Green Industrialisation: Expanding the circular economy through sectors like waste management, agroforestry, and sustainable manufacturing will play a crucial role. The government’s focus on sustainable agriculture, including private forestry and agroforestry, is essential for promoting environmental sustainability while providing economic opportunities . 
• Expanding Mangrove and Wetland Restoration Programs: India should scale up nature-based solutions by restoring mangroves and wetlands to enhance carbon sequestration and coastal resilience.  
  • The Mangrove Initiative for Shoreline Habitats and Tangible Incomes (MISHTI) can be integrated with Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to provide livelihood opportunities. 

What is a Circular Economy? 

• A Circular Economy is one where products are designed for durability, reuse, and recyclability and thus almost everything gets reused, remanufactured, and recycled into a raw material or used as a source of energy. 
• Circularity is about keeping materials in circulation for as long as possible. The ultimate goal is to reduce environmental and socio-economic impacts by reducing waste generation and keeping materials at their highest value. 
  • It includes 6 R’s - Reduce, Reuse, Recycle, Refurbishment, Recover, and Repairing of materials. 

What are the Challenges in Achieving Circular Economy (CE)? 

• Global Material Extraction and Overshoot: As the global demand for materials grows rapidly, from 22 billion tonnes in 1970 to 70 billion tonnes in 2010, and is expected to double by 2060, Earth’s capacity to regenerate is exceeded.  
  • In 2023, humanity’s demand surpassed Earth’s ability to replenish its resources, intensifying issues like biodiversity loss, pollution, and climate change. 
• Fashion Industry Challenges: Despite the increasing awareness of sustainability, the fashion industry continues to face major challenges in adopting circular economy practices.  
  • Over the past 15 years, fashion consumption has more than doubled, while garment lifecycles have become shorter. This trend has resulted in large-scale waste and environmental harm. 
• Challenges in High-Impact Sectors: High-impact sectors such as mobility, textiles, plastics, and construction present significant roadblocks to achieving circular economy goals. These industries require systemic changes to move toward more sustainable practices, and current efforts are insufficient to meet global sustainability targets. 
• Unclear Vision for CE: Despite the Government’s policy efforts the progress has been underwhelming; one of the major challenges is the lack of a clear vision towards the end-goal of India’s circular economy mission and gaps in actual implementation of the policies. 
• Reluctance of Industries: The Industries are reluctant to adopt the circular economy model due to supply chain limitations, lack of incentives to invest, complex recycling processes, and lack of information to support participation in reusing/ recycling/re-manufacturing processes. 

What are the Steps Needed to Promote Circular Economy? 

• Investment in Circular Systems: A shift towards a circular economy requires extensive investment in enabling policies, infrastructure, low-carbon alternatives, and technologies. Additionally, integrating circularity into business models will help unlock more sustainable practices. 
• Sustainable Lifestyles: Adopting sustainable lifestyles is vital to reaching the SDG 12 targets on Responsible Consumption and Production. Key actions include reducing carbon footprints, supporting low-carbon alternatives, and adopting more sustainable practices in mobility, energy use, dietary choices, and new business models. 
• Green Jobs and Economic Opportunities: Transitioning to a circular economy presents an opportunity to generate green jobs and enhance economic growth. It is estimated that India’s shift to a circular economy could bring a net economic benefit of USD 624 billion annually by 2050 and create millions of jobs globally. 
• Syncing Laws with Implementation Strategies: The government’s initiatives need to be in conjunction with implementable actions with industry collaboration to reap the benefits of the circular economy. 
• Technology-Driven Recycling: The government should encourage R&D in the field of waste recycling at the University and School levels to promote the active participation of the masses in technology enhancement in the field of waste management. 
  • Also, composting centres can be established in cities to reuse organic waste, which will enhance soil carbon content and eliminate the need for chemical fertilisers.