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Circular economic model with green economy development in Vietnam

(PTOJ) - Building a circular economy was identified by the 13th National Party Congress as one of the country's development orientations for 2021 - 2030 to achieve sustainable development, environmental protection, and response to environmental pollution and climate change on a large scale in the next ten years. The article outlines some models, prospects, and solutions to promote the development of a circular economy in Vietnam.

Vietnam is in the process of adjusting mechanisms and policies toward focusing on economic growth associated with sustainable development. The transition to a circular economy is an opportunity for Vietnam to develop quickly and sustainably and a step towards a green economy.

The general perception of the Model of Circular Economy (MCE) and green economy

The traditional economic model (also known as the linear economic model) exploits input resources for the economic system, production, distribution, consumption, and disposal. This is turning resources into waste, which inevitably leads to resource depletion and environmental pollution.

The MCE is a sustainable alternative to the linear economic model because it overcomes the limitations and consequences of the linear economy. The negative impact on the environment is considered a severe consequence, long-term, and most challenging to overcome. The knowledge-based economy also contributes to solving the problems of resources, labor, value chains, and supply chains during the Fourth Industrial Revolution.

The concept of cyclicity, feedback, and cycles in real-world systems have deep historical and philosophical roots. The MCE synthesizes several significant schools of thought, including Walter Stahel’s performance economy; the Cradle to the Cradle design philosophy of William McDonough and Michael Braungart; the Biomimicry model described by Janine Benyus; the industrial ecosystem of Reid Lifset and Thomas Graedel; natural capitalism by Amory, Hunter Lovins, and Paul Hawken; Gunter Pauli’s green economy system approach.

According to Professor Lawrence R.Klein, Wharton School - the University of Pennsylvania, USA (2015): “Circular Economy is an economic model in which all activities from design, production to service provision are provided towards the reuse of materials and eliminating negative impacts on the environment”.

The Circular Economy seeks to regenerate capital, whether financial, productive, human, social, or natural capital. This ensures enhanced flows of goods and services. The theoretical economy is not a unified model for the entire economy but an economy that contains models of the knowledge economy (model of the material cycle in product production, model of circles in the supply chain). Accordingly, the Circular economy has three important contents, including conservation and development of natural capital through control of rational use of resources and regeneration of natural systems; optimizing resource returns by rotating products and materials as much as possible in engineering and biological cycles; improving the overall performance of the system by minimizing negative externalities, even implementing design waste.

The Ellen Macarthur Foundation has identified three fundamental principles of the Circular economy: reducing and eliminating waste and pollution; prolonging the shelf life of products and materials; natural system reproduction(1). Thus, the operation of the circular economic system will have no waste on the environment, dealing with the relationship between the economy and the environment, because first of all, it will minimize the exploitation of natural resources and maintain the ecosystem. Secondly, it will not release waste from the production process into the environment.

The MCE is the most economical model for less toxic or non-hazardous, has high reuse and recycling capabilities, and closes the production cycle thanks to modern, clean, green, and waste treatment technology. This is appropriate and based on the knowledge economy, high-tech economy, digital economy, humanized economy, in harmony with nature, taking advanced knowledge, and being human-centered.

A green economy always accompanies the concept of the MCE because the two concepts are aimed at saving natural resources and reducing emissions to the environment. The United Nations Environment Program (UNEP) has defined a green economy as “an economy that provides human welfare and social justice, while significantly reducing environmental risks and reducing environmental ecology”(2). This is considered the most accurate and complete definition of a green economy. Accordingly, a green economy is simply an economy with low emissions, efficient and economical use of natural resources, and social justice. In a green economy, the growth of incomes and jobs based on reducing carbon emissions, reducing environmental pollution, using energy and resources efficiently, and preventing the loss of biodiversity and ecosystem services.

Most of the studies on the green economy agree that the trend of green economic development will stick to three main pillars: industry, agriculture, and services. The researchers affirm that the concept of a “green economy” does not replace the concept of sustainability, but it will be increasingly recognized as an appropriate model as the foundation for sustainable development. Sustainability is an important long-term goal, but greening the economy is the means to bring each country to sustainable development.

Developing Model of Circular Economy (MCE) and green economy in Vietnam today

Since very early, Vietnam has had models close to MCE, such as the economic model of garden - pond - barn (VAC), garden - forest - pond - barn (VRAC), or waste recycling craft villages. Up to now, Vietnam has appeared many more examples of the TH economy, such as the eco-industrial park model, ecological-economic model, clean production model, and especially circular initiatives of enterprises supporting the collection and recycling of all plastic bottles from Coca-Cola products sold; Heineken’s model of using or recycling up to 99.01% of by-products and scrap in production; model of using DOW’s use of flexible plastic packaging for roads; Unilever’s model of collecting, recycling, and reusing 100% of waste from plastic packaging; and a model of processing seafood by-products (shrimp shells and heads,...) creating Chitosan and SSE with the potential of 4-5 billion USD annually...).

The Party and State of Vietnam have promulgated many documents related to MCE and green economy: Decision No. 2149/QD-TTg dated December 17, 2009 of the Prime Minister approving the National Strategy on Management aggregate solid waste by 2025, with a vision to 2050; The National Action Plan for the implementation of the Sustainable Development Strategy 2011-2015; Decision No. 1216/QD-TTg dated September 5, 2012 of the Prime Minister approving the National Strategy for Environmental Protection until 2020, with a vision to 2030; Resolution No. 24-NQ/TW, dated June 3, 2013 of the Central Committee on proactively responding to climate change, strengthening natural resource management and environmental protection; Decision No. 2612/QD-TTg dated December 30, 2013 of the Prime Minister approving the Strategy on using clean technology for the period to 2020, vision to 2030; Decision No. 622/QD-TTg dated May 10, 2017 of the Prime Minister on promulgating the national action plan to implement the 2030 Agenda for Sustainable Development; etc...

Many legal documents with provisions related to MCE have been promulgated, such as Law on Environmental Protection, Law on Minerals, Law on Water Resources, Law on Land, Law on Consumer Protection, and Law on Forestry. Law on natural resources and environment of sea and islands, Law on plant protection and quarantine, Law on natural disaster prevention and control, Law on food safety, Law on economical and efficient use of energy, Law on Chemicals, Law on Product Quality; to name a few. The Ministry of Natural Resources and Environment is currently developing criteria, roadmap, mechanisms, and policies to promote MCE in Vietnam. It is an economic model in which design, manufacturing, and service activities aim to prolong the life of matter and eliminate its negative impact on the environment.

The above laws and regulations represent a shift towards building MCE, responding to climate change, and building a sustainable, green economy. Resolution of the 13th Party Congress sets the target: by 2025, the 50th anniversary of the day of complete liberation of the South and national reunification, Vietnam is a developing country with modern industry surpassing the low average income level; by 2030, the 100th anniversary of the founding of the Party, Vietnam will be a developing country with modern industry and high middle income; By 2045, the 100th anniversary of the country’s founding, Vietnam will become a developed, high-income country. The 13th Party Congress identified the construction of MCE as one of the country’s development orientations for 2021 - 2030 to achieve the goals of sustainable development, environmental protection, and response.

Solutions to develop MCE towards a green economy

The Resolution of the 13th Party Congress clearly states: “Developing a green economy with low waste, mitigating greenhouse gas and low carbon emissions; encourage the development of a circular economy model for integrated and efficient use of the output of the production process”(3). Thus, the Party’s Resolution initially mentioned the concept of MCE concerning environmental protection and the development of a green economy. Therefore, Vietnam has to solve the problem of fast development and fight against economic lag, but also has to make efforts to develop the economy to minimize waste and fight against environmental pollution and climate change. To achieve that goal, the following should be done:

First, institutionalize MCE through a system of laws, policies, and administrative procedures... to implement MCE systematically and synchronously, together with other forms of incentives, incentives in terms of mechanisms and finance, access to resources, and clear and transparent sanctions. Having policies to encourage and encourage the business community to invest in and develop the recycling industry and renewable energy and promote environmentally friendly products.

Second, develop a roadmap to implement MCE from micro to macro, in which enterprises are the central driving force. The roadmap MCE also needs to be associated with financial mechanisms to realize the set goals, such as public-private cooperation mechanisms, green financial mechanisms... Identify an alternative route fuel, products using hazardous materials, single-use products with eco-friendly fuels, raw materials, reusable products, prolonging the useful life of products.

Third, raise the awareness of manufacturers about environmental protection issues. Encourage people and businesses to participate in collection and recycling. Strengthen research, transfer recycling technology, prolong product life cycle. Support businesses to step by step approach to the digital economy to develop recycling markets for secondary materials from recycled products.

Fourth, develop a set of evaluation criteria, including criteria frameworks and soft criteria, and form a database system on MCE to serve management and control. Adjust the implementation of MCE uniform throughout the country.

Fifth, strengthen communication to raise awareness of people and businesses about MCE to change production and consumption thinking toward increasing the use of renewable energy, fully recyclable and reusable products; enhance resource recovery from used products; prolonging product life by providing product upgrades, refresh and redesign services; strengthen cooperation in research and development to connect consumers through common consumption to improve the efficiency of product use.


Received: August 20, 2021; Revised: August 26, 2021; Accepted for publication: September 16, 2021.



(1) https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf, June 19, 2020, p.22.

(2) Navstrechu “zelenoy” ekonomike. Obobshchayush-chiy doklad dlya predstaviteley vlastnykh struktur, http://www.unep.org.

(3) CPV: Document of the 13th National Party Congress, Vol.I, Truth National Political Publishing House, Hanoi, 2021, p.275.


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