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Greenhouse gas reductions, GDP rise amid opportunities for the Lao PDR in circular economy – UNDP report

Looking beyond the current ‘take, make and dispose’ extractive industrial model, the circular economy is restorative and regenerative by design.

Relying on system-wide innovation, it aims to redefine products and services to design waste out, while minimizing negative impacts. Underpinned by a transition to renewable energy sources, the circular model builds economic, natural and social capital.

The Lao PDR can create around one million jobs and add US$16 billion per year to its GDP by 2050 by adopting a circular economy model, according to the “Circular GHG mitigation opportunities in the Lao PDR” report from the United Nations Development Programme (UNDP). Virtually launched on Nov 26, 2021 in Vientiane, the report identified 17 interventions as being the most effective measures for the country to promote the circular economy. These include embracing wood-based construction, improved livestock efficiency, prioritizing active, shared, public and electric transport and reducing food losses.

The global goal of achieving net-zero greenhouse gas emissions by 2050 is a goal embraced by the Lao PDR in its updated Nationally Declared Contribution (NDC) under the Paris Agreement. With the measures proposed in the NDC, Lao PDR can reduce its global greenhouse gas (GHG) footprint from 106 to 58 million tCO2e/year in 2040. However, net-zero is possible in the same year with circular mitigation and sequestration.

Utilizing metabolic analysis, the report is based on a detailed search for country-specific trade, production, processing and disposal data. The report and the process that led to its publication support an update of the Lao PDR’s latest Nationally Determined Contribution from March 2021 and provide a long-term strategy to support the ambition to achieve net carbon neutrality by 2050.

While circular GHG mitigation is expected to require a US$4.1 billion investment in the period 2022-2036, in addition to the US$4.7 billion required between 2020 and 2030 to implement the NDC, eighty-nine per cent of the circular greenhouse gas mitigation and sequestration potential has a positive net present value, and 85 per cent provides a payback in less than six years.

However, the Lao PDR must overcome regulatory and institutional barriers for circular ventures to have greater access to investment capital to realize these investments.

The project was commissioned by UNDP under the NDC Support Programme, which works in contribution to the NDC Partnership with generous support from the German Federal Minister for the Environment, Nature Conservation, and Nuclear Safety (BMU), the German Federal Ministry of Economic Cooperation and Development (BMZ), the European Union and the Government of Spain.

The report was prepared by Shifting Paradigms, Earth Systems, Rebel Group, DFDL and Circle Economy with support from donors, UNDP, workshop participants, experts and reviewers.

The Lao government contributors to the report included the Ministry of Planning and Investment, Ministry of Industry and Commerce, Ministry of Agriculture and Forestry, Ministry of Energy and Mines, Ministry of Natural Resources and Environment, Ministry of Public Works and Transport, Ministry of Information Culture and Tourism, the Ministry of Science and Technology and Vientiane Urban Development and Administration Authority.

Academic and research contributions came from the faculty of Lao academic institutions, including the National University of Laos, Lao-German Vocational College, National Agriculture and Forestry Research Institute and the National Economic Research Institute.

Source: LAO News Agency