Circular Economy i

Incorporating Circular Economy in Southeast Asia

by utilizing Nudge Theory

Eesha Patne

Writing workshop: Artist as Researcher

Sukyun Weaver

November 15, 2019

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Incorporating Circular Economy in Southeast Asia by utilizing Nudge Theory

Nudge Theory, as defined by Thaler and Sunstein (2008) is any aspect of the choice

architecture that alters peoples’ behavior in a predictable way without forbidding any options or

significantly changing their economic incentives. A nudge can be counted as one when the

intervention is cheap and easy to avoid. They are not mandates.

Southeast Asia is one of the fastest growing consumer economies. The developing

countries show growth and progress different from the countries in the west (Mark Mackay,

2015). To discuss this state of transition, the various heads of state gathered to meet in Manila,

Philippines at the World Economic Forum (WEF) in May, 2014. Looking at the resources

available in this part of the world, Circular Economy was a strategy that was front and center.

Circular economy is a framework for an economy that is restorative and regenerative by

design. It is based on three principles:

- Design out waste and pollution

- Keep products and materials in use

- Regenerate natural systems

The sharing economy is one such example of a circular business model. The peer to peer

sharing economy takes the idea of collaborative consumption and makes it a viable, feasible

method to earn a livelihood. In this peer economy, people rent out their house, products or spaces

they are not using. Companies like Airbnb, Lyft, and Snapgoods are some well-known services.

This economic revolution is disrupting capitalist notions surrounding consumption and

ownership that have been brought about by incorporating planned obsolescence. South Korea’s
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Seoul is a self-proclaimed ‘sharing city’. The Seoul metropolitan government has been

emphasizing on introducing sustainable manufacturing methods and promoting sharing economy

business models. They encourage businesses and consumers to take decisions that promote

economic sustainability. To quote Mackay (2015), “The government said that they believe it

(circular economy) has the potential to resolve many economic, social, and environmental issues

of the city simultaneously by creating new business opportunities, recovering trust-based

relationships, and minimizing wastage of resources.”

To be able to achieve this shift to a circular economy from the unsustainable model of linear

economy and incorporate it at various levels in the developing countries of Southeast Asia,

Nudge Theory can be used as an effective tool.

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In the linear industrial economy model, the material is extracted from the earth with the

idea for consumption and production with no plans for reuse or re-generation of the resources or

their source (Ellen MacArthur Foundation, 2019). This take-make-dispose model of industrial

manufacturing has been the key result for the depletion of majority of the earth’s resources.

According to the Ellen MacArthur Foundation (2019), fast-moving goods account for

35% of material inputs into the economy – a significant part of the total consumer goods

expenditure on tangible goods and 75% of municipal waste. An OECD1 consumer buys – 800kgs

of food and beverage, 120kgs of packaging, 20kgs of new clothing and shoes – that mostly,

cannot be reused for any further economic purpose. To quote the McKinsey report (2019), “In

the current take-make-dispose system, around 80% materials will end up in incinerators, landfills

or wastewater. They come to a dead end.”

This consumerist model has created a disturbing trend in the idea of ownership and the

necessity for excessive consumption and it needs to come to an end. A shift to a model that takes

a holistic purview at the industrial consumption economy is of utmost necessity.

The Linear model was brought about by an alarming concept in design called the planned

obsolescence. The BBC documentary series Men who made us spend talks about this very

phenomenon. Jacques Peretti asks the important question “Why do we buy what we buy?”
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Planned obsolescence means built to

fail. It means that designers and manufacturers

deliberately shorten the life of the products

manufactured so as to achieve higher gains

and increase demand and supply for the

product and in turn profits.

The 3 part show discusses

consumerism and how it all began. Peretti takes us back to a German factory where the

phenomenon of planned obsolescence came into existence. Lightbulbs were long lasting until

several companies such as Philips and General Electric came together to form Phoebus cartel

sometime in 1920s and a pact to control the lifespan of the bulb to 1000 hours giving birth to

corporation scale planned obsolescence.

This is still a widely used phenomenon by product giants like Apple, Samsung, Philips,

etc. Some manufacturers also restrict consumers’ ability to repair their products – by using

digital locks or copyrighted software, using incompatible screws or gluing components together,

or by refusing to share their repair manuals. Linear economy and consumerism is the base of this

phenomenon.

To move away from this toxic consumption process, the manufacturing systems need to

be rewired to include a closed loop and pay closer attention to the rate of resource depletion.
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Circular economy at its core talks about minimizing the usage of virgin materials,

reduction of waste and pollution among others. The Circular Economy is essentially a shift in

how we as people look at the production cycle and process of products and services. It is more

than just recycling material; it integrates sustainability from sourcing raw materials through

design and manufacture to the disposal of the product – ‘cradle-to-cradle’ system some would

say. At its essence, this economic model asks us, as part of the system, so change our ideologies

and behavior about how we obtain, achieve, use and get rid of the variety of the products that

entail our lives. The UK Behavioural Insights Team enhances the power of behavior change and

works particularly in implementing Behavioural Science techniques in policy making at the

individual citizen and consumer level.

The circular economy has three main stakeholders at any simplified moment:

Government, producers and consumers. In terms of producers, much work has been done to

showcase the benefits in this microeconomic sector by the Ellen MacArthur Foundation. We,

humans will change when we see a good reason to and feel the necessity of the change.

According to Marc Atherton, often in dealing with large scale change it is often the behavioural

route that is most effective.

Nudge Theory has been an essential tool in making effective// one paragraph about a

nudge theory case study

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Conclusion:
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References

Thaler, R. H., & Sunstein, C. R. (2009). Nudge: improving decisions about health, wealth, and

happiness. New York. N.Y.: Penguin Books.

Part 1: Behaviour change towards a circular economy. (n.d.). Retrieved from

http://www.greatrecovery.org.uk/resources/behaviour-change-towards-a-circular-

economy-part-1/

Mackay, M. (2015, February 11). Southeast Asia: Is a "Circular Economy" the key for growth?

Retrieved from https://www.idgconnect.com/idgconnect/analysis-

review/1009509/southeast-asia-circular-economy-key-growth.