Circular Economy

Why Japan sees regeneration as key to a successful circular economy

This image shows a Japanese city landscape to illustrate the country's move towards a circular economy

Japan puts regeneration at the centre of its circular economy Image: Photo by Su San Lee on Unsplash

Naoko Kutty
Writer, Forum Agenda
Naoko Tochibayashi
Communications Lead, Japan, World Economic Forum
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Circular Economy

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  • The Japanese government is committed to transitioning to a circular economy and to becoming carbon neutral by 2050.
  • Japan's public and private sectors are collectively committed to the country's transition to a circular economy.
  • By adding the concept of regeneration to all efforts to realize a circular economy in Japan, it is hoped this will encourage the creation of businesses that work to regenerate nature.

Global population and economic growth have increased the demand for resources, energy and food, resulting in mass production and mass consumption. This generates vast amounts of waste, which exacerbates global environmental challenges, particularly climate change, resource depletion and marine pollution. According to the latest United Nations Population Fund (UNFPA) white paper, the world's population is now 7.954 billion and its expected to surpass 9.7 billion by 2050. The World Bank estimates that this will be accompanied by a significant increase in the world's annual waste volume, from 2.01 billion tons today to 3.4 billion tons in 2050.

As the world tries to make a paradigm shift to a sustainable economy and society by protecting the earth's finite resources, the Japanese government and Japanese companies are rushing to make the transition to a circular economy.

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The Japanese government's steady steps towards change

The environment surrounding the circular economy in Japan has changed rapidly over the past two years, since the Ministry of Economy, Trade and Industry (METI) released its Circular Economy Vision 2020. Based on this vision, which outlines the direction Japan should take in its transition to a circular economy, the government declared its goal of becoming carbon neutral by 2050.

In 2021, the world's first government-led disclosure and dialogue guidance specifically for the circular economy was developed by METI. This guidance was designed to help companies engage in a smooth dialogue with investors and financial institutions and attract investments and loans based on appropriate assessments.

A major development since then has been the enactment of The Plastic Resource Circulation Act in April 2022. Japan, which has the second largest amount of single-use plastic waste per capita in the world, has taken a major step towards change by establishing rules throughout the lifecycle of plastic, from production to recycling.

Subscription-based business model develops in Tanzania

In tandem with these national-level developments, Japanese companies are pursuing other innovative international initiatives. Daikin, the world’s largest air-conditioning company, has conceived of a business model in which energy-efficient air conditioners (ACs) are rented to small stores and homes and usage fees are received via a smartphone app on a subscription basis. The company's subsidiary Baridi Baridi is developing this subscription business in Tanzania.

Tanzania has high humidity and temperatures often exceeding 30 degrees Celsius. Yet, despite this heat, the usage rate of ACs is low. The few ACs that are installed are not widely used due to breakdowns and high electricity costs. This subscription service has no installation or maintenance costs. It allows customers to use the company's energy-efficient ACs, thus reducing their electricity bills.

This AC subscription service also has environmental benefits. It recovers refrigerants, which contributes to reductions in greenhouse gas emissions, and uses less energy. The refrigerant gas used for AC is said to have a greenhouse effect 600 to 2,000 times that of CO2. Its release into the atmosphere when ACs are discarded is a major global problem.

In Tanzania, there is virtually no recovery of refrigerants from ACs. For this subscription service, however, as the ACs remain the property of Baridi Baridi, all the systems and refrigerants are ultimately returned. “The uniqueness of this business model has made it possible to reduce electricity consumption by 60% and produce zero refrigerant emissions," explains Hiroki Asada, CEO of Baridi Baridi.


What is the World Economic Forum doing about the circular economy?

Tyre company drives sustainability

Tyre manufacturer, Bridgestone, is also accelerating its transformation to a sustainable solutions company with a vision of providing sustainable social and customer value. As one of its initiatives to place sustainability at the core of its management, Bridgestone has set a long-term goal of using 100% sustainable materials for the raw materials used in its products by 2050. To achieve this, the company is taking three actions: reducing raw materials consumption through weight-saving technologies; circulating resources through the use of recycled rubber and other materials; and, improving the productivity of natural rubber and diversifying its supply sources.

Bridgestone also creates added value through partnerships with various stakeholders. In February, it launched a joint project with the ENEOS Group to develop chemical recycling technologies that enable precise pyrolysis of used tires. If realized, this recycling process is expected to make a significant contribution to reducing CO2 emissions and promoting the use of renewable resources.

Japan leads the way hosting G7 summit and World Expo

The public and private sectors are collectively committed to Japan's transition to a circular economy and this movement will accelerate in the future. During COP27, currently underway in Egypt, the Japanese government plans to announce its partnership to implement Article 6 of the Paris Agreement, which provides for international emissions trading. In April 2023, the G7 Climate, Energy and Environment Ministers' Meeting will be held in Sapporo and, in 2025, Osaka will host the World Expo. With the theme Designing future society for our lives, the Expo 2025 Osaka, Kansai is being prepared with the realization of a circular economy at its core.


Shifting from sustainability to regeneration

At a time when the global environment is in a state of crisis, we are at a turning point in the transition to actions based on a new concept of regeneration. This goes one step beyond the concept of sustainability in the sense of maintaining it. The core of actions to realize a sustainable society is to reduce negative impacts on the earth and to continue people's lives and business activities in a way that has as little environmental impact as possible. Regeneration, on the other hand, aims to restore and regenerate the global environment while allowing the entire ecosystem to flourish.

By adding the concept of regeneration to all efforts to realize a circular economy in Japan, we can encourage the creation of businesses that will regenerate nature the more they conduct business. There are still many factors that can further accelerate our progress towards solving the complex interactions of environmental issues.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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Circular EconomyClimate Change
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