Advancing Resource Efficiency & Circular Economy-Based Strategies

The availability and accessibility of natural resources are fundamental for human well-being and the functioning of economies across the world. Enhancing resource efficiency (RE) and promoting the use of secondary raw materials have emerged as a strategy for fostering this availability and accessibility of resources and ensuring that the potential trade-off between growth and environmental well-being can be minimized. Government of India has come out with the Draft National Resource Efficiency Policy which is currently being finalized and will soon be put up for Cabinet approval.

Fostering resource efficiency aims at governing and intensifying resource use in a judicious manner and has the potential to bring about multiple benefits along all the three dimensions of sustainable development – economic, social and environmental. There may be tradeoffs as a result, but designing appropriate business models based on innovation and technology can help minimize them.

Judicious use of resources will also require the coordinated functioning of the domestic institutions at not only cross-sectoral but also multi-level coordination with the active involvement of all stakeholders. Organizational isolation across government ministries and departments needs to be avoided if effective outcomes are to be seen. It is in recognition of this need that India, with its federal structure, is engaging in pushing forward the resource efficiency agenda through institutions and mechanisms both at national and state levels, each having roles and responsibilities with a need to bring about more coordinated and integrated policy development and stakeholder engagement in decision-making and action plans. The nature and quality of institutions and the level of political commitment is crucial in providing impetus to the resource efficiency agenda in the country (including public funds). Inter-ministerial and state-centre coordination is an imperative for efficient public delivery and effective functioning of the politico-administrative machinery in the country.

Additionally, this would also help coordinate different governance levels and generate information and knowledge, within the framework of existing environmental institutionalism. While the Indian experience is unique, there are lessons to be learnt and experiences to be gained from what has taken place during the formulation of the resource efficiency policy and what may constitute the implementation phase.

The role of businesses is extremely important as well. They need to begin with understanding the actual impact of each stage of their product’s life, engage in responsible product design which characterizes ease of disassembly, ease of recycling. They need to make the best decisions on choice of materials including substituting, where possible, virgin with secondary raw material. Adopting resource-efficient, cleaner production processes and exercising their responsibility towards end-of-life management will be critical.

Taking the example of the automobile sector – which is one of the key sectors driving India’s economic growth on one hand, and faces the issue of vehicular emissions at the same time making it a large contributor to airborne pollution – it becomes extremely important to address resource efficiency issues in this sector. Meeting the growing demand for conventional as well as electric vehicles (EVs) will require a dedicated supply of the raw materials at affordable prices. Electric vehicles will require many newer materials with enhanced performance over their predecessors, particularly for manufacturing their components, such as batteries and powertrains. This calls for a detailed assessment of the projected demand of different types of vehicles and the consequent impact on raw material requirements. Given that availability of these critical metals is still unknown in India (no geological survey confirms that), the country remains import dependent – which makes it inevitable to ensure that whatever material enters the domestic boundary should not be leaked, and opportunities in improving material consumption, including augmenting materials in the value chain through efficient recovery and recycling, should be created and tapped.

Auto manufacturers can improve the resource efficiency of their production processes and products through innovation that could improve the design of motor vehicles to reduce the material demand and also allow for their efficient repair. Adopting the ‘design for sustainability’ concept, vehicles can be built to be as sustainable as possible over their entire lifecycle. OEMs can also actively contribute to resource efficiency by remanufacturing a wide variety of parts, including engines and gear-boxes. Remanufactured parts can be 30-50% less expensive while having the same guarantee and quality control as new parts.

Further, consideration of product as a service needs to be promoted and there should be creation of leasing options and sharing platforms where product remains owned by manufacturer and consumers pay for its usage. This idea has been depicted through Zoom car, Ola Uber etc. Convenient pay-per-use models that give people access to tailored transportation, whenever required, can replace the need for vehicle ownership.


Shilpi Kapur, Author at Indus Dictum

Dr. Shilpi Kapur-Bakshi is a Senior Fellow at The Energy and Resources Institute (TERI). Her work focuses on policy issues surrounding natural resources.


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