Circular Economy: A Transformative Path Toward Malaysia’s Sustainable Future

08 Jan 2025

8 Min Read

Associate Professor Dr Lin Woon Leong, Professor Dr Eddy Chong Siong Choy (Academic Contributor)

IN THIS ARTICLE

Circular Economy: A Transformative Path Toward Malaysia’s Sustainable Future

Malaysia stands at a critical juncture in its journey toward sustainable development. Facing escalating environmental challenges and evolving economic demands, the nation must ask: How can growth be made resilient, inclusive, and sustainable?

To this, the Malaysia MADANI framework emphasises sustainability, innovation, and prosperity—values aligned with the principles of the circular economy (CE).

The CE model, which prioritises reusing, recycling, and regenerating resources, is a solution to global environmental and economic challenges. At the 29th Conference of the Parties (COP29) in Baku, Azerbaijan, global leaders emphasised its role in combating climate change and driving sustainable growth. Key reports, such as The Circular Economy in Motion by Multilateral Development Banks (MDBs), the Circularity Gap Report 2024 by Circle Economy Foundation, and the Circular Cities Declaration Report 2024 by International Council for Local Environmental Initiatives (ICLEI), complement this discourse. By leveraging these insights, Malaysia can align its MADANI vision with actionable CE strategies for a sustainable future.

Global Lessons from COP29 and Circular Economy Reports

The MDBs’ report, The Circular Economy in Motion presented at COP29 showcases 20 case studies across sectors such as waste management, construction, plastics, textiles, and battery recycling. These examples highlight the economic, environmental, and social benefits of CE investments, from creating green jobs to reducing environmental degradation.

CE is not just an environmental solution but a vital driver of economic resilience. Malaysia stands to gain by adopting similar projects, such as waste-to-energy initiatives, which not only addresses environmental challenges but also strengthens the nation’s energy security. Similarly, the construction sector offers opportunities for circular practices, such as using recycled materials and modular building designs to reduce resource consumption and emissions.

MDBs’ funding models for CE projects, through loans, private-sector investments, and advisory services, provide a roadmap for Malaysia to mobilise resources and scale up CE practices, fostering innovation and competitiveness.

Bridging the Circularity Gap: Malaysia’s Responsibility

The Circularity Gap Report 2024 reveals global circularity rates are declining due to insufficient policies, inadequate investment, and public awareness. Malaysia faces these challenges but has the opportunity to lead in addressing them. Policymakers must enact bold regulations, such as tax benefits for circular businesses, penalties for waste mismanagement, and mandatory recycling quotas. Public-private partnerships, emphasised at COP29, can drive large-scale CE projects.

Education is essential, requiring CE principles to be integrated into curricula and vocational training programmes. MADANI’s innovation pillar (Daya Cipta) underscores the importance of creativity in embedding CE into the economy, which will help Malaysia build a sustainable future.

Transforming Urban Landscapes with Circular Practices

Urban areas, major hubs of consumption and waste, are pivotal to advancing CE. ICLEI’s Circular Cities Declaration Report 2024 provides a blueprint for integrating circular principles into urban planning. COP29 emphasised urban resilience in mitigating climate risks, with cities like Kuala Lumpur, Penang, and Johor Bahru leading Malaysia’s CE transition. Smart recycling systems and urban agriculture initiatives can enhance waste management and food security while reducing environmental footprints.

Nature-based solutions, such as green roofs and permeable pavements, improve urban heat, stormwater management, and biodiversity, aligning with MADANI’s sustainability (Mampanan) and respect (Hormat) pillars.

Circular Economy: An Economic Imperative

CE presents opportunities for Malaysia to reduce costs, enhance resource efficiency, and unlock new revenue streams, benefiting both businesses and the national economy. By transitioning from a linear "take-make-dispose" model to a circular "reuse-recycle-regenerate" approach, businesses can enhance sustainability and unlock new revenue streams. Key sectors like agriculture, manufacturing, and energy are ripe for circular innovation, such as regenerative farming practices and battery recycling.

Adopting CE at scale also strengthens economic resilience by reducing reliance on raw materials and creating robust local value chains, aligning with MADANI’s prosperity (Kesejahteraan) pillar.

The transition to CE faces obstacles like resistance to change, lack of infrastructure, and limited awareness. Public awareness campaigns, emphasised at COP29, are crucial for promoting CE benefits and encouraging behavioural change. Collaboration among governments, businesses, and civil society is key, and Malaysia can adapt strategies from global leaders like the European Union and Japan.

Aligning Circular Economy with Malaysia MADANI

The principles of Malaysia MADANI—sustainability, innovation, respect, trust, and compassion—provide a strong foundation for embedding CE into the nation’s development agenda. By aligning CE strategies with these values, Malaysia can achieve both environmental and socio-economic progress. For instance, the trust (Keyakinan) pillar can be reinforced by ensuring transparency and accountability in CE initiatives, while the compassion (Ihsan) pillar ensures that CE benefits reach marginalised communities.

The circular economy is an imperative for Malaysia’s future. With insights from global reports such as The Circular Economy in Motion, the Circularity Gap Report 2024, and the Circular Cities Declaration Report 2024, Malaysia has a clear roadmap to action. By embracing CE, the nation can realise the aspirations of Malaysia MADANI, creating a prosperous, sustainable, and globally respected future. The time to act is now—because a circular Malaysia is a sustainable Malaysia.

Dr Lin Woon Leong, Associate Professor at the School of Management & Marketing, and Professor Dr Eddy Chong Siong Choy, Executive Dean of the Faculty of Business & Law are both from Taylor’s University. Taylor's Business School is the leading private business school in Southeast Asia for Business and Management Studies based on the 2024 QS World University Rankings by Subject and has received the Association to Advance Collegiate Schools of Business (AACSB) accreditation.

This article was first published on Astro Awani on 10/01/2025.

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