CHAPTER


DOI :10.26650/B/SS10.2020.017.01   IUP :10.26650/B/SS10.2020.017.01    Full Text (PDF)

Circular Economy, Sustainable Development and the Role of Islamic Finance

M. Kabir HassanMehmet SaraçAhmed Wasiful Alam

Based on an extract-produce-consume-waste mechanism, the conventional linear economy requires enormous extraction and wasteful production &consumption. This results in severaltribulations and threats to the earth’s climate such as rising global warming due to greenhouse gas emissions, erosion of the ecosystem, diminution of natural resources, and the release of toxic waste into the natural habitat. To mitigate these challenges andto rescue the earth’s climate from the devastation caused by the linear economic system, the importance of introducing and implementing a circular economic model is inevitable. A circular economyis based on a closed loop/cycle of production through consumption which facilitates limited use of materials and resources, minimal emission of hazardous elements into the nature, and a highly efficient waste management system to ensure recycling and reuse of residuals into further production. The Islamic financial system, being a pioneer in financing Sustainable Development, can be a major driver in the transformation towards a circular economy. The principles of Islamic finance, accompanied by Shari’ah regulations and Sustainable Development Goals (SDGs), will provide a solid guideline and framework as well as ample amount of funding sources for effective transition of the linear economy into the circular paradigm.


JEL Classification : O44 , P4 , Q01

References

  • Bastein, T., Roelofs, E., Rietveld, E., & Hoogendoorn, A. (2013). Opportunities for a circular economy in the Netherlands (TNO, 2013 R10864) The Netherlands Organisation for Applied ScientificResearch (TNO). https://www.tno.nl/media/8551/tno-circular-economy-for-ienm.pdf google scholar
  • Bello, A. & Suleman, A. (2011). The Challenge of Achieving the Millennium Development Goals in IDB Member Countries in the Post-Crisis World: IDB Occasional Paper No. 16, Rajab, Jeddah, Saudi Arabia: Islamic Development Bank. google scholar
  • Boulding, K,E. (1966). The economics of the coming spaceship earth. In H. Jarrett (Ed.) Environmental quality in a growing Economy, Resources for the future (pp. 3-14)., Baltimore, MD, USA: Johns Hopkins University Press. google scholar
  • Brooks, T. M., R. A. Mittermeier, G. A. B. Da Fonseca, J. Gerlach, M. Hoffmann, J. F. Lamoreux, C. G. Mittermeier, J. D. Pilgrim, & A. S. L. Rodrigues. (2006). Global Biodiversity Conservation Priorities. Science 313:58–61. google scholar
  • Butterworth, J., Bleriot, J., Zhu, D., Auken, I., Wijkman, A., Ekins, P., Stahel, W. R., Braungart, M., Lacy, P., Hendricks, B. google scholar
  • Braam, G., Van Der Plas, A., & Cramer, J. (2014). Special section: towards a circular economy. Europe’s World Summer 2014(Greener Europe) p.47-67. google scholar
  • Chapra, M. Umer. (2008). The Islamic vision of development in the light of Maqasid al-Shariah. Jeddah, KSA: Islamic Research and Training Institute, Islamic Development Bank. google scholar
  • Di Maio, F., & Rem, P.C. (2015). A robust indicator for promoting circular economy through recycling. Journal of Environmental Protection, 6, 1095–1104. doi: 10.4236/jep.2015.610096 google scholar
  • Elia, V., Gnoni, M.G., & Tornese, F. (2017). Measuring circular economy strategies through index methods: A critical analysis. Journal of Cleaner Production, Vol. 142, pp. 2741–2751. https://doi.org/10.1016/j. jclepro.2016.10.196 google scholar
  • Furness, M., Scholz, I., & Guarin, A. (2012). History repeats?: The rise of the new middle classes in the developing world, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 1-4 p. google scholar
  • Gavas, M., Mustapha, S., & Prizzon, A. (2014). Topic Guide: Blended finance for infrastructure and low carbon development. UK: Evidence on Demand. google scholar
  • Ghisellini, P., Cialani, C., & Ulgiati, S. (2016). A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production. 114, 11–32. https://doi.org/10.1016/j.jclepro.2015.09.007 google scholar
  • Geissdoerfer, M., Savaget, P., Bocken, N.M.P., & Hultink E.J. (2017). The Circular Economy – A new sustainability paradigm. Journal of Cleaner Production, 143, 757-768. http://doi.org/10.1016/j.jclepro.2016.12.048 google scholar
  • Hobson, K. & Lynch, N. (2016). Diversifying and de-growing the circular economy: Radical social transformation in a resource-scarce world. Futures 82, 15–25. http://dx.doi.org/10.1016/j.futures.2016.05.012 google scholar
  • Jackson, T. (1996). Material Concerns — Pollution, profit and quality of life. https://www.routledge.com/MaterialConcerns-Pollution-Profit-and-Quality-of-Life/Jackson/ p/book/ 9780415132497 google scholar
  • Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An analysis of 114 definitions. Resource, Conservation, Recycling. 127, 221–232. https://doi.org/10.1016/j.resconrec.2017.09.005 google scholar
  • Kirchherr, J., Hekkert, M., Bour, R., Huibrechtse-Truijens, A., Kostense-Smit, E., & Muller, J. (2017). Breaking the barriers to the circular economy. Utrecht University: Utrecht, The Netherlands. google scholar
  • Krausmann, F., Gingrich, S., Eisenmenger, N., Erb, K.-H., Haberl, H., & Fischer-Kowalski, M. (2009). Growth in global materials use, GDP and population during the 20th century. Ecological Economics 68(10) p.2696-2705. google scholar
  • Lacy, P. & Rutqvist, J. (2015). Waste to wealth: The circular economy advantage. Palgrave Macmillan UK: Kindle Edition. google scholar
  • Lewandowski, M. (2016). Designing the business models for circular economy—Towards the conceptual framework. Sustainability , 8, 43. google scholar
  • Luomi, M. (2012a). Qatar’s natural sustainability: Plans, perceptions, and pitfalls. Doha: Center for International and Regional Studies, Georgetown University School of Foreign Service in Qatar, Occasional Paper No. 11. google scholar
  • Pearce, D.W. & Turner, R. K. (1989). Economics of natural resources and the environment. Washington DC: Johns Hopkins University Press. google scholar
  • Raksit, A. (2014). Ahead of the curve - The circular economy. London. Corporate Citizenship, 14 p. google scholar
  • Ranta, V., Aarikka-Stenroos, L., Ritala, P., & Mäkinen, S.J. (August 2018). Exploring institutional drivers and barriers of the circular economy: “A cross-regional comparison of China, the US, and Europe”. Resources, Conservation and Recycling. 135: 70–82. google scholar
  • Reichel A., De Schoenmakere M., & Gillabel J. (2016). Circular economy in Europe – Developing the knowledge base, Luxembourg, Luxembourg, URL: https://www.eea.europa.eu/publications/circular-economy-ineurope (p.18) google scholar
  • Repo, P., Anttonen, M., Mykkänen, J., & Lammi, M. (2018). Lack of congruence between european citizen perspectives and policies on circular economy. Eur. J. Sustain. Dev. 249–264. google scholar
  • Rizos, V., Tuokko, K., & Behrens, A. (2017). The Circular economy: A review of definitions, processes and impacts. Centre for European Policy Studies. Brussels, Belgium, Volume 1. google scholar
  • Rizos, V., Behrens, A., van der Gaast, W., Hofman, E., Ioannou, A., Kafyeke, T., Flamos, A., et al. (2016). Implementation of circular economy business models by small and medium-sized enterprises (SMEs): Barriers and enablers. Sustainability, 8(11), 1212. MDPI AG. Retrieved from http://dx.doi.org/10.3390/su8111212 google scholar
  • Sadiq, R. & Mushtaq, A. (2015). The Role of Islamic Finance in Sustainable Development. Journal of Islamic Thought and Civilization, 5(1). (Ramla Sadiq and Afia Mushtaq) (UMT Journal). google scholar
  • Stahel, Walter R., & Reday-Mulvey, Genevieve (1981) Jobs for Tomorrow: The potential for substituting manpower for energy. New York, N.Y: Vantage Press. google scholar
  • The Forum of Young Global Leaders (2015). Our vision, [Online].http://www.thecirculars.org/taskforce.html (Page consulted on March 27). google scholar
  • Tonkonogy, B., Brown, J., Micale, V., Wang X., & Clark, A. (2018). Blended finance in clean energy: experiences and opportunities, s.l.: Commission and the Blended Finance Taskforce. google scholar
  • Towards the Circular Economy: An economic and business rationale for an accelerated transition. (2012) Ellen MacArthur Foundation. p. 24. google scholar
  • Van Eijk, F. (2015). Barriers & drivers towards a circular economy: Literature Review; Acceleratio: Naarden, The Netherlands, pp. 1–138. google scholar
  • Wijkman, A., Skånberg, K. (2015). The circular economy and benefits for society: jobs and climate clear winners in an economy based on renewable energy and resource efficiency; Club of Rome: Winterthur, Switzerland; p. 59. google scholar
  • Yacob, P., Aziz, M., Makmor, M., & Zin, A. (2013). The policies and green practices of Malaysian SMEs. Global Business and Economics Research Journal, Vol. 2, https://doi.org/10.5539/jms.v8n3p43 google scholar


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.