Recent orders
Accounting Standards
Accounting Standards
Institution
Student’s Name
Answer to Question 1
Development of accounting has a significant impact on the development of a country’s economy. Instead of leading to a lag in economic development of a nation, advancement in accounting standards lead to a meaningful contribution to economic growth of a country. Contribution of accounting development to economic development could be seen from the fact that local and international bodies of accountancy collaborate with an aim of promoting contribution to growth or success or various economies (Afterman, 1995). Much contributions of accountancy to economic development are seen from the various meetings set to establish key areas of economic development globally. An example of these meetings is a high-level meeting organized in Qatar on Accounting for Development.
In the Qatar meeting, a report was established to point out the possible capacities, global standards, integrated reporting, global standards, as well as business standards from which professional bodies could contribute to economic development through accounting standards development. in any case, it is established that well planned financial infrastructure is highly useful in aiding development of major emerging economies. The reason behind this argument is that quality financial infrastructure provides investor with a sense of acceptability in terms of high assurance level. Assurance becomes greater when resources used in economic development are accounted for (Alia, 2011). A combination of historical records through accounting methodologies and projections of future trends in econometrics or statistical economics brings in a perfect road for economic development. This implies that accounting has to be incorporated in economic development but the standards have to be developed to maintain pace with the prevailing technologies.
Answer to Question 2Culture has a significant extent to its explanation on the relative importance of stock exchange as well as its explanation on professional accounting globally. In this case, a person has to establish the existing differences in cultures how these different cultures influence the accounting standards as well as the stock exchange regimes. Experts establish that there exists varying accounting behavioral patterns that are applied to various countries that apply them in groups. From this aspect of culture and difference in accounting practices, it is possible to group various countries in groups with respect to the accounting practices they employ (Afterman, 1995).
The culture of a country determines the accounting system to employ due to country’s regulations on the accounting standards employed (Alia, 2011). Most countries in the world employ the European cultures in various aspects of life including accounting systems. The same differences come in when pointing out that some countries employ the French culture while others employ the English culture and so on. The same happens to accounting principles and in the development of accounting. The United State has its own accounting principles but cultural influence on many countries by the American culture and economy can be used as ground for indicating that culture has a significant influence on accounting principles. Similarly, stock exchange is done in cultural and economic blocks. Trading in the stock market with China would call for some application of the Chinese culture or have the Chinese culture represented whether in language of business, economic, or accountancy behavior (Alia, 2011). It follows that culture explains much on accounting development, practices, as well as playing a key role in the stock market.
Answer to Question 3
Accounting is the language of business and it is through accounting that organizations can communicate effectively about their financial position. Prospects in accounting may look at the global scope where uniformity is growing quickly with the harmonization of culture and ethnic division. Accounting has been found to vary in standards and applicability as countries grew up in developing their own accounting standards in the recent past (Collins, 1989). While this differences in accounting principles came in within the past few years, most countries are adopting the two major accounting principles, which include the United States GAAP and the IFRS. The US Generally Accepted Accounting Principles and the International Financial Reporting Standards seem to be adopted by many countries in a great capacity. This happens with many countries wanting to be associated economically with the United States as well as wanting to do well in the global market. Most accounting professional firms that were not within the US GAAP or the IFRS are increasingly recognizing the benefits of uniform global accounting standards (Collins, 1989). A single set of accounting standards can be used to compare the financial positions of various firms irrespective of their locations or the countries they are situated. This trend confirms that the future trend in accounting standards would be uniform and complying to the international standards of accounting.
Answer to Question 4
Saudi Arabia as a country has its own regulation as far as accounting practices are concerned. All professionals and professional bodies related to business and economic development are required to be licensed by the country’s Ministry of Commerce. The professional bodies are not limited to accounting and this aspects gives an implication of high level of the country’s professionalism and statutory control. It is also established that the Saudi Arabian regulatory framework for its market securities has highly developed after the enactment legislations that regulate the country’s capital market (IMF Country Report No. 12/93, 2012). Regulation in Saudi Arabia extent to the accounting standard since the resolution of accounting regulations by the country’s Minister of Commerce in 1968 in which practicing accounting or auditing has to be in accordance with CPA regulations (IMF Country Report No. 12/93, 2012). The Saudi Arabian business environment is characterized by regulations and transparency in accounting despite its unique accounting principles from those of the GAAP or IFRS.
References
Afterman, A. B. (1995). International Accounting, Financial Reporting, and Analysis. . New York: Warren, Gorham & Lamont.
Alia, J. B. (2011, March 7). The Effect of Environmental Factors on Accounting Diversity – A Literature Review. Retrieved February 23, 2013, from papers.ssrn.com: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1780479
Collins, S. H. (1989). The Move to Globalization. Journal of Accountancy , 95-104.
IMF Country Report No. 12/93. (2012). Saudi Arabia: Reports on the Observance of Standards and Codes. IMF Country Report No. 12/93 , 1-45.
Accounting Service Product Market Business and Marketing
Accounting Service Product/Market Business and Marketing
Name of Student
Course
Tutor
Date of Submission
I. Product
A. Rationale for selection
Global e-commerce services is the solution to the increasing demand for accounting problems poised to various companies. It is against this background that E-Commerce Accounting Service is selected to provide accounting solutions for all year round accounting services to our clients. The business will assist small scale and home based business and individual clients in finding accounting solutions.
B. Tangible component
The product will be highly significant as it would provide;
General accounting and book keeping services: – management of accounts payable and receivable, employee payroll accounts, designing of flexible internal control and working capital management.
Business Consulting & Advisory Services:- business and market plans development, training employees on use of accounting packages, and consultancy on payment systems to adopt
Financial Controller/CFO Services:- end year Financial Statement Analysis, budgetary and budgeting control, preparation of stakeholders reports , and filing of tax returns
C. Intangible component
The product will inherently;
Offer professional and competitive accounting services to the satisfaction of our clients
Assist clients to comply with various regulatory and administration accountancy regulation and rules and,
Act as referring agent of other accounting firms
D. Intellectual property
Our brand will be protected under intellectual property rights an initiative that will serve to protect our brand of services. This will involve protection of the copyrights and the trademarks such as the brand name protection. The unfair competition law will also be applied to the shapeup our brand so as to hinder unfair protection that would result to the closure o the business. Intellectual property rights of the E-Commerce Accounting Service will also be protected by security systems on the internet that are highly technological. The patent licensing and the product licensing will also be done to ensure that the company trades effectively.
E. Involvement
In view of the fact that customers can must have a complete confidence with global e-commerce accounting services due to the sensitivity involved in the field, high involvement will be required at all levels. There is high in the management team as well as in the research team as they all engage to learn about the customers and also to identify the niche market. The high involvement also arises as the team reaches out to find about the possible online and offline competition that arises and acts as a threat to the company.
F. Theory-based characteristics/considerations1.) Product life cycle
The current industry trend indicates that the services to be provided by the firm stand a good chance to successfully generate revenue. This positive trend is reinforced by relatively recent, May 22, 2009, survey by PaySimple and Market Platform Dynamics (MPD) that was released through the PRLog Press Release indicating that ‘over the next two years, small businesses believe more of their commerce will be done using electronic payments’ up from the current 50% users
a.) Affect on price
Our pricing will be affected by the relatively complexity of our product as it will aim at covering all the costs involved in; remunerations, running departments, taxation. It is however imperative to note that there would be lower overhead cost since being a service oriented company, there would be minimal manufacturing constraints.
b.) Affect on promotion
This analysis shows that there is potential growth in the adoption of modern payment methods that would necessitate professional and technical assistance to implement. The product life cycle will also affect the choice of how to promote our product. Creation of awareness is key to a successful entry into the market hence considerable finances will be attached to that effect. II. Market
A. Market
Though not the first entrant in the market, market analysis and surveys show existence of unrecognized yet potential clients as that can sustain the business. The Venture also bases the analysis on its unique products and plans to offer flexible consultancy service and also to incorporate expert information system to aid clients in decision making. 1.) Business to Consumer
Retail segment: this segment represents the small scale traders who mainly handle consumer goods. Given their number in United States, it is projected that a careful and aggressive marketing would ensure that the largest sales volumes are realized from this segment.
2.) Business to business
Service based business: this represents businesses which offer different services to their clients at a fee such car tracking companies. These companies use automated payment systems and would require set up as well as advisory services of the same.
B. Market segmentation
The potential clientele base has been segmented into three groups based on data from the established similar entities (Division of clients into groups). It is estimated that it will take 3 months to find customers and get established.1.) Demographic(s)
As noted above, the firm’s demographic profile will mainly be inclusive of; individuals in need of accounting services, small scale businesses and corporate clients. The three groups will have varying accounting needs, for example corporate clients may require check deposit and acceptance, tax advisory and end year accounting advisory services some of which may not be applicable to individual clients. 2.) Psychographic(s)
Our clients will be seeking highly qualified professionals with extensive theoretical knowledge with competent workforces who have undergone institutionalized training. We therefore indent to employ extremely well trained and competent individuals so as to enable us serve our clients with prestige and dignity. 3.) Geodemographic(s)
Geodemographics will be applicable as our firm will classify clients into different categories since geodemographic profile functions will help the firm make a number of choices. The location of our clients in addition to the clientele type; whether individual or corporate will be put into consideration since in our line of business, differences within these groups will be instrumental in proper service delivery thereby guaranteeing ultimate customer satisfaction. 4.) Diffusion of innovation
The company will develop and implement an Enterprise Resource Planning. This will ensure effective and efficient management of the organization and its customers as well as other stakeholders.
Website
The company will develop and implement a website which will serve the purpose of marketing as well online service requests.
Hardware
The company will utilize PCs and laptops. Printers for the necessary work will also be utilized although the company intends to be as paperless as possible. The scanners will be part of the hardware among other computer related accessories.
Recovery system
The company will acquire software which can assist in data recovery as well as use of Linux to ensure data security.
C. Place
a) Own-Web Based
By borrowing the latest technology our business will be web based, hence the business will construct interactive website, and have a 24 hour reliable online support to provide fast and efficient services as a tool for attracting and retaining customers. Seasoned ICT experts and experienced outsiders will be consulted before major decisions are made. Latest Computers with high speed and resolution will be bought to ensure fast and efficient Internet connectivity. Specifically, the various technical aspects that will enable the company to realize its goals effectively and efficiently.b.) Outsourced
The marketing and PR services will be outsourced. Each departmental head will be qualified and experienced so as to ensure competency in management and service delivery. The possible weaknesses like ineffectiveness of the management team will be addressed through regular trainings, succession management, change management and external consultancy. Conflicts will be addressed through arbitration, courts system, and enforcement of disciplinary2.) Telephone access
The company will control all its telephone access with all telephone networks handled by qualified technicians. The technicians will be able to respond from the branches where they will be managed from the main office through the development of the virtual office.3.) E-mail access
The company will utilize the use of emails in order to ensure that it reaches the largest number of clients within its area of operation. The area of operation is not restricted as the company intends to expand in future but for the start it will start with Connecticut.
D. Distribution
Both direct and indirect (though relatively shorter chains) will be employed.
Our business could use direct distribution system, where the services are directly offered by our employees such as tax returns and tax payment advisory services.
Indirect distribution system can be employed in the setting up of the electronic payment system where we would contract a thirds party to supply the soft wares to be installed. 1.) Logistics
A number of Service Delivery Procedures will be implemented once an engagement has been agreed. These would include;
drafting and delivery to the clients a formal business engagement letter detailing:-
Type and terms of engagement
Proposals of the initial plan for performing the contract
Outline of our expectations from the client during the contract period
Highlights the client’s responsibilities during implementation
Estimated project time line and normal cost on completion
Underlying legal and professional requirements from each party
The engagement letter represents a proposal of the contracts’ terms and can still be amended before commencement of the project.
The actual services are delivered according to the agreed on schedule.
Modes of Delivery
A number of delivery channels will be used after the completion of client’s accounting needs. These would include; Online delivery which will enable the materials to be delivered via the internet and CD-ROMs. E-mails, bulletins and online chats will be applied when communicating with the clients.
The company will also deliver products in form of parcels since over the recent years; parcel and express delivery have gained great significance in the global B2C eCommerce market as the medium has been embraced by both businesses and consumers. b.) Storage
The business will run as departmental functions, two departments, though matrix reporting relationship will be encouraged based on its mission statement. It is in the two departments that any accounting need specifications of the client will be stored furthermore; the functions will be divided into finance and administration, and research and development and resources management.c.) Shipment tracking capability
The engagement is reviewed periodically by AMS and the client to ensure that the goals are being met, deviations are recognized, and corrective controls and measures taken
Billing for the services rendered will be done upon completion of the engagement though notional recognition of revenue may be done when a significant portion of the work has been approved by client.
Follow ups will be made as after sales services for up to three months while upgrades will be done request under new terms.III. Promotion
A. Media/medium
To create awareness, a specified sum will be spent on promotional strategies. There will be discounts for frequenting clients during inception periods. Space will be bought on magazines and newspapers to market the entity. Aggressive marketing will also be carried out in social and business functions.
Paid ads will also feature in the local print and mass media, posters and brochures. Calendars promoting our business will also be published and distributed freely.
B. Appeals1.) Price/thrift-based
In order to promote our products and meet our sales goals, the enterprise will mainly apply a number of price based methods. Key among them will be price matching guarantees; hence we will analyze the pricing of our rivals and offer significant price cuts while maintaining our high level of services thereby not only attracting new customers but also creating customer loyalty. The enterprise also aims at implementing modern day price slashing strategy to reduce the ultimate prices to our customers thereby eliminating competition. 2.) Emotional, sentimental (affective) promotion strategies
The enterprise will attract customers by giving them ‘more than they expect.’ Bonuses will be a key strategy furthermore; personalization and follow-ups, especially calling them to ask whether they are satisfied by our services will be a key promotion strategy. IV. Price
Pricing of our services will be very competitive relative to the competitors’ rates and the prevailing industrial averages. The fees charged are based on professional projection of the expected returns. A benchmark rate will be a return of 10% on the service offered. Any support work not related to new implementations that is requested outside of normal hours will be charged at a 50% premium to the normal rate for that service or client.
A.) Discounts
The firm will also offer discounts especially to corporate clients with multiple accounting services needs. V. Strategic PlanA. Purpose1.) Vision statement
E-Commerce Accounting Service has the vision of providing quality solution and quality results to our esteemed customers by applying informed expertise to respond to our customer with precise specialized and thorough accounting services.2.) Mission statement
Our mission is to offer competitive and affordable accountancy, tax and auditing services, with the help of the latest technology and customer friendly-competent staff to the maximum satisfaction of all our clients and develop strategic plans to expand to other foreign markets.
B. Product value creation
1.) Competitive advantage
The provision of these service though remain very competitive and require personalized approach to marketing, the industry analysis shows that new players can still create innovative products and services and be able to survive competitively. The Operating Competitive Advantages for E-Commerce Accounting Service include;
Techniques
The operations described above are proven techniques similar to those used while performing similar consulting work during the course of my employment with a local accounting firm, an experience which extends to four decades. However, adjustments have been factored in a bid to reflect the current market situation, the technological changes, new customer requirements, the legal and professional accounting bodies’ rules and regulations.
Experience
Based on this analysis, both direct and indirect rivals posses similar experience as E-Commerce Accounting Service management’s as well as ability to pool more resources and human capital for their ventures. Advantageously, Economics of scale and direct costs of production do not exist for this industry thereby enabling us to compete effectively through;
Possible referral networks of clients (power of verbal communication)
Adoption and regular up grade of new versions of accounting software at affordable costs
However, extreme caution will be taken especially in both the use of several vendors’ products due to potential existence of business rivalry and open source software as well as trial versions because of lack of reliability and accountability. 2.) Customer satisfaction
The site is very strategic due to its close proximity to the target customers, accessibility and affordability of utilities and rental premises.
V. Tactical Plan
A. Strategy implementation
The three areas of market segmentation have been arrived at based on market research which identified existing gaps to be filled competitively. The study revealed that the small scale accountancy and related services clients are normally overlooked by large and established firms. These clients however have potential and capability to generate revenue in return for the services offered. 1.) Deploymenta.) Product
E-Commerce Accounting Service aims to offer accounting solution for all entries including taxation services, preparation of ledger accounts, accounts receivable and accounts payable, consistence evaluation of balance sheets as well as preparation of employees payrolls and companies billings and accounting, consulting & CFO services.
B. Product and Service description
Systems audit: the Company carries out regular and random systems audit for clients to verify and authenticate the integrity of their systems and the susceptibility to the internal control system to fraud. The areas checked include routine recording maintenance, invoicing, payroll updates among others
End of financial year consultancy services: in the process of making their end year financial reports, the firm acts as a one-off consultant to assist in making technical and legislative subjective decisions like treatment and estimation of depreciation, valuation of end year inventory, treatment of suspense accounts and adjustments of ledger entries.
In summary, we aim to offer all year round Accounting Services to our clients including;
General Accounting and Bookkeeping services:-
management of accounts payable and receivable
employee payroll accounts,
Designing of flexible internal control and.
Working capital management.
Business Consulting & Advisory Services:-
business and market plans development,
training employees on use of accounting packages, and
consultancy on payment systems to adopt
Financial Controller/CFO Services:-
end year Financial Statement Analysis,
budgetary and budgeting control,
preparation of stakeholders reports , and
Filing of tax returnsb.) Promotion
The establishment of the marketing department will not only offer competitive advantage bit also ensure that the target group is aware of our services. This shall be achieved through;
Personal visits to potential clients to create awareness
Secondly, we shall use posters, media, flyers and social networking sites like face book to create awareness on our services
To create awareness, a specified amount will be spent on promotional strategies. There will be discounts for frequenting clients during inception periods.
Space will be bought on magazines and newspapers to market the entity. Aggressive marketing will also be carried out in social and business functions
c.) Place
Operations for Accounting Management Systems are based in home office in CT. Most of the actual consulting services and meetings with clients will be performed at the client’s place of business.
The Equipment and materials required include the printing machines, photocopiers, computers, stationery, physical space, office suppliers, and internet access. Most of the materials will be purchased while the space will be rented before the launch of the business.C.) Goals and Objectives
Our working clientele based objectives to make E-Commerce Accounting Service a successful and competitive entity are:
To offer professional and competitive accounting services to the satisfaction of our clients
To assist clients to comply with various regulatory and administration accountancy regulation and rules
To act as referring agent of other accounting firms
References
Ahlstedt, M. (2007). Implementation of an IT based Marketing information system in a
High tech company. Hogskolan, Economics Department
Barone, L. (2009). Webinar: State of small Businesses in the United States. Retrieved
June 14, 2009, from HYPERLINK “http://smallbiztrends.com/2009/05/state-of-small-businesses.html” http://smallbiztrends.com/2009/05/state-of-small-businesses.html
Edward G, Malison, (1999).Writing up a Business Plan, London, McGraw Hill
Companies.
Horton, J.L., (2008). The Secret of service marketing. Accessed April 6, 2009, from
HYPERLINK “http://www.online-pr.com/Holding/ServiceMarketingSecret.pdf”http://www.online-pr.com/Holding/ServiceMarketingSecret.pdf.
Joyce P, Jennet, (2005).Creating Outlines for Small Business Plan. New York, University
Press
PRLog. (2008). Survey Finds Major Trend of US Small Businesses Looking to Adopt
Electronic Payments. Retrieved June 14, 2009, from
HYPERLINK “http://www.prlog.org/10074252-survey-finds-major-trend-of-us-small-businesses-looking-to-adopt-electronic-payments.html” http://www.prlog.org/10074252-survey-finds-major-trend-of-us-small-businesses-looking-to-adopt-electronic-payments.html
The Value of the Circular Economy Concept in Achieving Sustainable Development
The Value of the Circular Economy Concept in Achieving Sustainable DevelopmentStudent’s Name
Course Code and Number
Instructor’s Name
Date of Submission
Introduction
The circular economy has turned out to be a feasible replacement to the unfeasible linear status quo when it comes to responding to the worldwide difficulties of the twenty-first century. Rather than being depleted, materials are restored in a system that is both constant and long-running, with the purpose of ensuring that they continue to function at their maximum capability. When a product is used, rather than losing its worth, it is repurposed or recycled several times to ensure that it retains its value in the long run. Entrepreneurs will require new business strategies as well as inventive product development that take utilizes non-toxic materials that have the potential of being recycled indefinitely in order to achieve this goal. Prosperity and wealth are transferred from the current modes of consumerism to a system that is both constant and long-term in nature within the circular economy. It is a system that is designed to be cyclical in nature, where the wants of all individuals are met through the use of the world’s natural resources. The main aim of this paper is assessing the value of the circular economy concept in achieving sustainable development. Taking the case of China, the paper will evaluate how far and to what extent circular economy has achieved towards sustainable development goals (SDG).
Principles For a Sustainable Circular Economy
As Kirchherr et al. (2017) demonstrates, there have been many definitions of circular economy as there are circular economy academics, hence making it difficult to pin down a single definition of circular economy. The pursuit of more efficient resource utilization is, perhaps, the single thing that all interpretations have in common, but the concept of “better” is still up for debate (Velenturf & Purnell, 2021). Although it is obvious that the worldwide exhaustion of natural resources and accompanying GHG (greenhouse gas) emissions are continuing to intensify, piles of waste and related emissions are still accumulating as demonstrated by Velenturf and Purnell, (2017), it is also rational that a CE concept could perhaps seek to minimize the exploitation of natural resource and maximize waste prevention in order to achieve greater sustainability. Although depletion and environmental damage pose significant dangers to the long-term sustainability of an environment conducive to the survival of the species, circular economy must aim to reinstate and revitalize the environment by making a contribution to sustainability from a whole-system standpoint by optimizing the economic, technical, social, and environmental values of products and materials in societal structure.
The Presently Proposed Circular Economy Concept
The present circular economy concept formulated by the business world is provided in the figure below.
The present circular economy concept
The CE concept message is that the inner circles of the figure, which represent reuse of products, remanufacturing, and refurbishing, consume less resources and energy while being cost-effective in comparison to typical recycling process as inferior-grade raw materials. As Korhonen, Honkasalo and Seppälä (2018) points out, it is important to optimize the amount of time the value of the resources lives in the inner circles. First and foremost, materials must be salvaged for repurposing, refurbishing, and repair, followed by remanufacturing, and only subsequently should they be recovered for raw material utilisation, which has traditionally been the primary objective of recycling (Van Kruchten & Van Eijk, 2020). In the standpoint of CE, combustion for power ought to be the second to last alternative choice, with landfill disposal being the final alternative. Thus, the commodity value chain as well as life cycle preserve the absolute highest quality and value for the longest possible period of time while also being as energy efficient as is reasonably practical.
The use of the value produced for as long as possible ends up making business and economic sense the moment a raw material has been obtained, refined, and manufactured at the regular expenses. This means keeping the product value and service in economic circulation for as long as it lasts is a good way to maximize profits. When contrasted to the usual linear status quo and energy flow paradigm of the present universal economic system, this frequently leads to environmental improvements as well. In contrast to the traditional waste and by-product consumption and recycling methods, the CE concept emphasizes the usage of the value ingrained in raw material, thus extending the reach of traditional waste and by-product usage and recycling methods. Additionally, it contributes to conventional regeneration, which typically recycles items in their raw form, that is, in applications when a significant portion of their monetary worth has already been depreciated.
Circular Economy Concept Contribution to SDGs
The CE is crucial to the global sustainability agenda pushed by international agencies such as the United Nations and has the potential to contribute to a number of sustainable development goals (SDGs). The CE is definitely focused on SDG 12 and its implementation relating to the accountability in consumption and production (Heshmati, 2017). Yet, due to its wide reach, it also links to SDG 2 (ending hunger as evidenced in Italy (Principato et al., 2019)), which will be attained via sustainable and responsible food production, SDG 6 (availing clean water), SDG 7 (availing clean and affordable energy), SDG 13 (addressing climate change), and SDG 15 (life on land) (Van Kruchten & Van Eijk, 2020). These are all goals that a CE may help achieve. Certain sub-targets of the SDGs can also be linked to the CE concept. For example, CE advocates for prolonged material usage, resource efficiency, and redesign (Rodriguez-Anton et al., 2019). Ultimately, the CE concept is specifically designed to achieve goals that are consistent with the SDGs to ensure an environmental conscious world in the future.
The ultimate objectives of the sustainable development are inclusive of prospering lives and livelihoods, enhancing the security of food and water, global access to renewable energy, a productive ecosystem, as well as the development of sustainable societies, among other things. Part of the Sustainable Development Goals (SDGs) can be achieved through the adoption of CE that benefit the economy, society, and the environment as a whole while also promoting the well-being of human race for both current and future generations (Schroeder, Anggraeni, & Weber, 2019). The conventional economy development is heavily reliant on the environment and the economy in general. Higher resource efficiencies, resource regeneration, and the use of renewable resources are being advocated in industrial hubs throughout the globe, such as China, in order to decouple economic development from the environment and natural resources.
Resource Efficiency Enhancement
Recently, the circular economy has gained in popularity as a means of addressing some of the world’s most pressing sustainable development concerns, including climate change. One of the most promising parts of the circular economy concept is its emphasis on avoiding waste and pollution from being created in the first place, as well as on reusing and rebuilding natural systems once they have been destroyed. The circular economy is a critical component of the global effort to accomplish the goals of the Paris Agreement (Heshmati, 2017), and it is being promoted as such. Reduced waste, reduced consumption, and the restoration of natural capital are all proclaimed aims of the circular economy, and they are all achievable. Financial resources are also required to aid in the development of these new business models and concepts, which are now in development.
Higher efficiencies in resource utilization implies that a greater GDP can indeed be produced with fewer resources, raw materials, and energy inputs. In broad sense, resource productivity has increased remarkably since 2005, as evidenced by improvements in the efficiency of mineral resources, energy, and water (Berndtsson, 2015). On the basis of product value, it has been confirmed that a ton of coal can generate 12.4 thousand RMB in 2010, compared with a ton of coal generating 10 thousand RMB in 2005. Over the period 2005-2010, the intensity of water use extended by 59 percent, and it is anticipated to rise even further in the next coming decades. It has also been observed that there has been a significant improvement in efficiency of energy consumption. The amount of energy needed to generate 10,000 RMB in gross domestic product reduced to 0.76 tons of coal from 1.22 tons of coal.
Achievement in Resource Comprehensive Utilization
Because of the paucity of natural resources, the cost of basic energy, raw materials, and natural resources continues to rise. Sustainable resource conservation, resource comprehensive use, and renewable resource regeneration are all potential solutions to the increasing manufacturing cost. Those strategies have the potential to reduce the amount of raw materials and fundamental resources required. In particular, the rapid expansion of extensive resource usage, encompassing mineral resources, waste, and renewable resources, is the most significant direct impact of adopting circular economy. Since 2005, the complete usage rate of entire resources has increased at an annual rate of 1 percent, with the highest increase occurring in 2013. (The State Council, 2013). The development of extensive resource usage resulted in the reduction of approximately 6700 hectares of land for the storage of waste material. Comparing with utilizing fundamental resources, it is approximated that the use of renewable resources like steel and non-ferrous materials could save 0.25 billion tons of coal annually, as well as decrease waste water discharge by 17 billion tons, carbon pollution by 0.6 billion tons, and generation of solid waste by 5 billion tons (NDRC, 2014). 3.8 million tons of oil and more than 220 thousand hectares of agricultural land were spared as a result of the recycling of waste textile.
Renewable Resource Recycling
Three components of resource extensive use and recycling of renewable resources are expressed in the benefits of resource comprehensive utilization. As a preliminary step, circular economy advocates for the use of 30 by-products and waste, as well as renewable resources, in place of basic energy and resources (Heshmati, 2017). People will be able to extract less resources from the environment, such as minerals, timber, and fossil fuels, as a result of which less destruction will be made to the ecosystem (Corona et al., 2019). Second, the remanufacturing of metals, like steel and non-ferrous materials, may cut down the amount of coal needed in the processing of metallic materials, and as a result, can contribute to the minimization of carbon dioxide emissions. Third, by repurposing waste and by-products as resources, reduced solid waste is generated, which reduces the amount of solid trash that must be disposed of. If industrial waste material is not properly disposed of, it will contaminate the soil, water, and air, posing a health risk. As a result, the circular economy contributes to the enhancement of the practices to manage waste. It has also been mentioned previously that land for the rehabilitation of solid waste has been spared, which will help to reduce the cities’ land burden. As a whole, these advantages are critical in the development of cities that are inclusive, secure, resilient, and environmentally sustainable.
Water and Carbon Recycling
The reuse of wastewater is also advocated, in conjunction to its disposal. Each year, large quantities of water are consumed by industrial activities, exacerbating the already severe water scarcity concerns (Mathews & Tan, 2016). The recycling and reuse of water has the potential to significantly cut down the exploitation of water resources. According to some estimates, the yearly rate of recycling mine water reached 62 percent between 2010 and 2013, and the yearly recycling quantity of mine water exceeded 6 billion tons m3 over this time span (NDRC, 2014; Centeno & Portillo, 2018). Wastewater reuse can also help to reduce the amount of polluted water that is released into surface water systems and aquifers, which can contribute to promote water security up to a specific degree. As of 2013, the CO2 recycling capability had increased to approximately 10 million tons, which is more than quadruple the carbon recycling capability in 2000. (NDRC, 2014). The average carbon pollution was 7.2 billion tons in 2010, and it is expected to continue to rise (United Nations, 2016). As a result, it is anticipated that carbon recycling can decrease carbon dioxide emissions by 0.1 percent annually. If carbon recycling can be pushed even further, it is feasible to realize more success in reducing carbon dioxide emissions.
Agricultural and Forestry Waste Recycling
Forestry and agricultural waste are as well entailed. The circular economy development model, as well as the latest plan of action, establish unequivocally that the state mission of changing agriculture into a circular mode is a national priority (The State Council, 2013). In 2013, more than 600 million tons of straw were utilized in its entirety, representing for 77.1 percent of total straw production in the year. A total of 95 percent of the forestry waste was utilized, with the majority of it being utilized in biomass energy and making of paper. More than 40% of the livestock manure was recycled to produce methane, which is a greenhouse gas.
Constraints and Limitations of the CE Concept
Other than the fact that the circular economy concept its still in its infancy stages, there are several limitations and constraints that slows down its implementation. There are several aspects to these challenges and constraints, including a poor information system, a lack of advanced technology, poor economic bonuses, a lack of legislative enforcement capacity, infantile management, an incomplete system for performance evaluation, and a lack of public awareness.
Conclusion
CE appears to be a promising approach since it has been successful in attracting the attention of the corporate community to support sustainable development. When one harvest a resource from environment and work to transform it into a service or commodity with a commercial benefit, it is natural sense to expect to be able to utilize that value on a number of occasions rather than just once. This is very logical from a commercial standpoint. It is also straightforward and logical to make an argument that by utilizing the value ingrained in resources multiple times, rather than just once as is commonly done in the linear material flow pattern of the financial system, one can reduce the amount of virgin input as well as the amount of waste and emissions produced by the business activity.
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