Transition towards circular economy in vietnam situation and motivations

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY LUONG MAI LAM TRANSITION TOWARDS CIRCULAR ECONOMY IN VIETNAM: SITUATION AND MOTIVATIONS MASTER'S THESIS VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY LUONG MAI LAM TRANSITION TOWARDS CIRCULAR ECONOMY IN VIETNAM: SITUATION AND MOTIVATIONS MAJOR: GLOBAL LEADERSHIP CODE: QHJ-2019-MGL RESEARCH SUPERVISORS: Prof Dr KATO ATSUSHI Dr TRAN LUONG THANH Hanoi, 2022 STATEMENT OF COMMITMENT With personal honor, I guarantee that this study’s result is my own and it does not violate the Regulation on prevention of plagiarism in academic and scientific research activities at Vietnam Japan University (Issued together with Decision No 700/QĐ-ĐHVN dated 30/9/2021 by the Rector of Vietnam Japan University) This study is submitted in the fulfillment of requirement for the master’s degree in Global Leadership Signature: Luong Mai Lam Date: December - 2022 ii ACKNOWLEDGMENT I would like to express my gratitude to those who have supported and accompanied me during this thesis work First and foremost, I am extremely grateful to my supervisors, Prof Dr Kato Atsushi and Dr Tran Luong Thanh for their continuous support of my Master’s study and research Thank you for seeing something in me and encouraging me to be better Kato sensei are always kind, patient and approachable to your students He let me participate in his zemi and keep a close eye on my thesis progress when I distracted by working My gratitude to him for his immense knowledge and all he has done, which I will never forget Thanh sensei is a great supervisor who always gives invaluable advice, helps me to solve my problems and be more confident when writing my thesis I will always remember our discussions and the way he gives me chances to express my ideas and encourage me I would also like to extend my deepest gratitude to Dr JungHyun Jasmine Ryu for her invaluable lectures, advice, and comments throughout my thesis She is the one that made me love research She challenged me to reach higher and further than I thought I could, and I have become better because of her I wish to show my appreciation to Prof Dr Pham Hong Tung for always support and stand by our side during my Master’s study He also helped me in data collecting process and pushing me forward My sincere thanks also go to all my friends at Vietnam Japan University for their emotional support and concern, especially in cheering me on and helping me to overcome deadlines I am grateful to Ms Nguyen Thi Thu Trang, our former program assistant who is incredibly supportive and caring for me throughout my time at Global Leadership program My heartfelt thanks to my family, for their love and encouragement Last but not least, I want to thank me I want to thank me for believing in me I want to thank me for having no day off I want to thank me for doing all this hard work and never quitting iii ABSTRACT Circular economy has become an inevitable trend for countries to achieve economic growth, while maintaining environmental sustainability As part of the world, over recent years, Vietnam has accelerated the implementation of strategies and action plans to shift from a traditional linear economy to the closed loop of circular economy As the largest employer among all sector, agriculture is not only an industry strongly affected by climate change but also an industry that significantly causes greenhouse gas emissions With the responsibility to contribute to the mitigation of global climate change and move towards a green economy, Vietnamese agriculture is also gradually transforming its production model Hence, it is imperative to investigate effective ways to make the transition easier Yet, most of the studies relating to the topic in Vietnam mainly introduce general concept, review international experiences or research specifically about waste management only There were limited empirical studies that has comprehensively and systematically investigated about transition towards circular economy in agriculture sector of Vietnam Therefore, the findings of this research not only contribute to the literature in the area of circular economy and sustainable development, but also provide insights for relevant policymakers in the future This paper aims to explore the awareness and attitude of agricultural cooperatives on circular economy; their current practices related to circular production; and investigate the key drivers and barriers in the transition towards this new model It is a conclusive descriptive research To verify the research framework, a survey was conducted gathering results from 98 agricultural cooperatives in the Red River Delta and Northeast of Vietnam The study found that most of surveyed cooperatives are aware of and have positive attitude towards circular economy However, although they have a certain level of awareness, the performance of applying circular economy in their production are still limited The most frequently performed practices mainly relate to sustainable input material In terms of drivers and barriers, lack of business model and frameworks to implement circular economy were identified as the biggest obstacles for cooperatives in the transition Meanwhile, supportive government policies and regulations towards implementation of circular economy is considered to be key drivers of their intention to change In addition, a model combining above factors to predict iv cooperatives’ intention to shift towards a circular agriculture is tested Results show that awareness and driver significantly affected the intention of respondents Key words: Circular economy; circular agriculture; agricultural cooperatives; transition v TABLE OF CONTENTS Chapter INTRODUCTION 1.1 Sustainable development and circular economy 1.2 Circular economy in developing countries Chapter LITERATURE REVIEW 2.1 Circular economy 2.1.1 General concept of circular economy 2.1.2 Why circular economy? 2.1.3 Practices, drivers, and barriers of a circular economy transition 2.2 Circular economy: why it matters for developing countries 13 2.2.1 Dilemma for developing countries 13 2.2.2 The skewness in the global shift towards circular economy 14 2.3 Agriculture sector and the circular agriculture 16 2.3.1 Background context of circular agriculture 16 2.3.2 Circular agriculture in Vietnam 17 2.3.3 Cooperatives as the special force in the transition 22 Chapter RESEARCH FRAMEWORK 24 3.1 Research objective and questions 24 3.2 Framework 25 3.2.1 Conceptual framework 25 3.2.2 Analytical framework 26 Chapter METHODOLOGY 29 4.1 Selection of the case study 29 4.2 Cooperatives’ manager surveys 29 4.2.1 Survey Samples and procedures 30 4.2.2 Limitation 32 Chapter FINDINGS AND ANALYSES 33 5.1 Cooperatives’ awareness of circular economy 33 5.1.1 Cooperatives’ level of awareness 33 5.1.2 Cooperatives’ channel of information 37 5.2 Cooperatives’ attitude towards circular economy 39 Cooperatives’ circular practices 43 5.3.1 Internal practices 43 5.3.2 External practices 49 5.4 Cooperatives’ drivers and barriers for the transition 50 5.4.1 Drivers for the transition towards circular economy 51 5.4.2 Barriers for the transition towards circular economy 55 5.5 Relationships between cooperatives’ Awareness, Attitude, Drivers, Barriers and Intention to shift towards circular economy 58 5.5.1 Hypotheses 58 5.5.2 Reliability and validity of measurement model 59 ii 5.5.3 Structural model test 61 Chapter CONCLUSION 63 6.1 Summary and Discussion 63 6.2 Limitations and future research 66 Reference 67 Appendix 72 Appendix Survey form in Vietnamese 72 Appendix Survey form in English 81 iii LIST OF TABLES Tables Page Table 2.1 Literature review of circular economy practices Table 2.2 Literature review of circular economy drivers 10 Table 2.3 Literature review of circular economy drivers 11 Table 3.1 Analytical framework created by the author 26 Table 4.1 Cooperatives’ demographics 30 Table 5.1 Agriculture cooperatives’ level of awareness 33 Table 5.2 Agriculture cooperatives explanation of 3R in circular economy 34 Table 5.3 Distribution of level of awareness and understanding of 3R concept 35 Table 5.4 Descriptive statistics for salient beliefs of cooperatives (N=98) 39 Table 5.5 Cooperatives’ belief of circular economy’s outcome 40 Table 5.6 Cooperatives’ belief of circular economy benefits environment and sustainable development 41 Table 5.7 Cooperatives’ belief of acceptance of responsibility 42 Table 5.8 Availability of modern technology supporting circular practices 44 Table 5.9 Training sessions about circular economy in cooperatives 45 Table 5.10 Descriptive statistics for circular practices in production chain of cooperatives (N=98) 46 Table 5.11 Frequency of external exchange material and waste 50 Table 5.12 Descriptive statistics for drivers for the transition (N=98) 52 Table 5.13 Descriptive statistics for barriers for the transition (N=98) 55 Table 5.14 Result of reliability test 60 Table 5.15 HTMT values of Constructs 60 ii LIST OF FIGURES Figures Page Figure 1.1 Humanity’s collective ecological footprint breached the sustainability mark Figure 2.1 Relationship between circular economy and Sustainable Development Goals targets Figure 2.2 Laws and regulations related to circular economy in Vietnam 20 Figure 3.1 Conceptual framework compiled by the author 25 Figure 5.1 Source of information 37 Figure 5.2 Path coefficients of the model 61 iii o Thay đổi tư (Rethink), Sửa chữa (Repair), Tái chế (Recycle) o Tôi khơng biết 3R kinh tế tuần hồn (TEXT) Vui lòng đọc kĩ định nghĩa Kinh tế tuần hồn: Kinh tế tuần hồn mơ hình kinh tế theo nguyên lý thứ nguyên liệu đầu vào thứ khác Có thể hiểu kinh tế tuần hồn dựa mơ hình biến rác thải đầu trình sản xuất thành nguồn tài nguyên đầu vào trình sản xuất khác khác, tuần hoàn doanh nghiệp, ngành nội thân doanh nghiệp Ngoài ra, việc giảm thiểu sử dụng nguyên liệu gây hại môi trường khai thác tài nguyên thiên nhiên hoạt động tái sử dụng tối đa giá trị tài nguyên thúc đẩy kinh tế tuần hồn Một số ví dụ ứng dụng kinh tế tuần hoàn: Sản xuất phân hữu từ chất thải nơng nghiệp, áp dụng chăn ni an tồn sinh học, sử dụng lượng tái tạo, sử dụng cơng nghệ Biogas Vui lịng đánh giá tần suất thực hoạt động trình sản xuất Quý Hợp tác xã Tần suất Hoạt động Không Hiếm Thỉnh Thường Luôn thoảng xuyên Mua nguyên liệu thô không thân thiện với môi trường Giảm thiểu tiêu thụ sử dụng tài nguyên thiên nhiên Tự xử lý, tái chế phụ phẩm, phế thải để làm nguyên liệu đầu vào Vứt bỏ chất thải sau xử lý 74 Khi mua nguyên vật liệu, ưu tiên tiêu chí thân thiện với môi trường người sử dụng giá Sử dụng lượng tái tạo (VD: lượng sinh khối biomass, lượng mặt trời …) Áp dụng mơ hình trồng trọt, chăn ni thân thiện với mơi trường an tồn sinh học Sử dụng hệ thống liệu đo lường hiệu kinh tế môi trường hoạt động sản xuất Sử dụng phân bón thuốc bảo vệ thực vật, thức ăn chăn nuôi hữu cơ, từ chế phẩm sinh học 10 Hiện nay, Quý Hợp tác xã có trang bị sử dụng công nghệ đại nhằm ứng dụng mơ hình kinh tế tuần hồn? o Có o Không o Dự định triển khai 11 Quý Hợp tác xã triển khai hoạt động đào tạo liên quan tới kinh tế tuần hoàn cho cấp quản lý thành viên? o Có o Khơng o Dự định triển khai 12 Vui lòng đánh giá tần suất Quý Hợp tác xã mua, bán, trao đổi nguyên vật liệu phế phẩm với đối tác khác nhằm tái chế tái sử dụng chúng? o Thường xuyên 75 o Thỉnh thoảng o Hiếm o Không 13 Vui lịng đánh giá mức độ đồng tình Quý Hợp tác xã nhận định đây: Mức độ Rất Nhận định khơng đồng tì nh Khơng đồng tì nh Đồng tì nh Rất đồng tì nh Chuyển đổi hướng tới kinh tế tuần hồn đem lại lợi nhuận cao cho hợp tác xã Kinh tế tuần hồn đóng vai trị quan trọng để đạt phát triển bền vững Kinh tế tuần hoàn giảm thiểu tác động tiêu cực lên mơi trường Chuyển đổi hướng tới kinh tế tuần hồn yêu cầu đạo đức kinh doanh 14 Quý Hợp tác xã có sẵn sàng thay đổi mơ hình kinh doanh để phù hợp với kinh tế tuần hoàn? o Khơng o Có thể o Có 15 Q Hợp tác xã có sẵn sàng đầu tư vào hoạt động chuyển đổi hướng tới kinh tế tuần hoàn? 76 o Khơng o Có thể o Có III Động lực rào cản trình chuyển đổi hướng tới kinh tế tuần hồn 16 Vui lịng đánh giá mức độ quan trọng động lực tới việc chuyển đổi hướng tới kinh tế tuần hoàn theo Quý Hợp tác xã Mức độ Động lực Không quan trọng Hơi quan trọng Tương đối quan trọng Quan Rất quan trọng trọng Các kĩ thuật, công nghệ tiên tiến giúp việc ứng dụng kinh tế tuần hoàn trở nên dễ dàng Các lợi ích kinh tế có thực kinh tế tuần hoàn Các quy định, sách hỗ trợ phủ khuyến khích kinh tế tuần hoàn Sự ưa chuộng khách hàng dành cho sản phẩm sản xuất 77 theo mơ hình kinh tế tuần hồn Hàng rào phi thuế quan từ đối tác thương mại yêu cầu thay đổi theo hướng phát triển bền vững Khả giảm thiểu tác động tiêu cực lên môi trường kinh tế tuần hồn Có hệ thống tiêu chuẩn, hướng dẫn cụ thể ứng dụng kinh tế tuần hoàn để thực hành theo Tiềm tạo việc làm chuyển đổi hướng tới kinh tế tuần hồn 17 Vui lịng đánh giá mức độ thách thức rào cản tới việc chuyển đổi hướng tới kinh tế tuần hoàn theo Quý Hợp tác xã Mức độ Rào cản Rất thấp Thấp Trung bì nh Cao Rất cao 78 Hạn chế kỹ thuật, cơng nghệ cần có để ứng dụng kinh tế tuần hồn Ít khơng có lợi ích kinh tế ứng dụng kinh tế tuần hoàn Ưu tiên vấn đề khác việc chuyển đổi kinh tế tuần hoàn Thiếu nhận thức nhiệt tình dành cho kinh tế tuần hồn Các sách chưa thúc đẩy việc chuyển đổi kinh tế tuần hồn Thiếu mơ hình, khung mẫu kinh tế tuần hoàn để thực theo Chưa đủ lực quản lý cần cho kinh tế tuần hồn Chi phí đầu tư cho q trình chuyển đổi cao 18 Vui lòng đánh giá mức độ quan trọng chủ thể sau tới việc chuyển đổi hướng tới kinh tế tuần hoàn theo Quý Hợp tác xã? Mức độ Chủ thể Không quan trọng Hơi quan trọng Tương đối quan trọng Quan Rất quan trọng trọng 79 Quản lý hợp tác xã Tổ chức liên minh hợp tác xã Đối tác thương mại Người tiêu dùng Các quan phủ (VD: Bộ Nơng nghiệp, Bộ Kế hoạch Đầu tư, Bộ Tài nguyên Môi trường ) 80 Appendix Survey form in English (Introduction and Consensus) IV Cooperative information 19 Field of operation (Can choose more than one answer)  Farming and Husbandry  Raising aquaculture/fishery  Forestry  Salt making  Providing agricultural services i.e irrigation, plant protection, land preparation…  Others: _ 20 Location (Province): _ 21 Year of establishment: _ 22 Main market: o Domestic o Export o The same proportion for both 23 Name of your cooperative: _ V Practices and perception about circular economy 24 Please describe your knowledge about circular economy? o I know exactly what circular economy is o I have some understanding about what circular economy is o I not really know what it means but have heard of it o I not know and have never heard of it 25 What are the channels of information about circular economy that you have heard from? (Can choose more than one answer)  Governmental policies and propaganda  Televisions 81  Newspaper  Internet  Case studies from other businesses  I have never heard of circular economy  Other: 26 What are the “3R” of circular economy? o Reuse, Reduce, Recycle o Reuse, Refurbish, Redesign o Rethink, Repair, Recycle o I not know about 3R of circular economy (TEXT) Please read the following explanation of circular economy: Circular economy refers to a new economic system in which everything is the input of something else In circular economy, the early waste of one production process will be turned into another production input resource Other actions that promote circular economy are minimizing the use of materials that are harmful to the environment and resource depletion, along with increasing reuse activities that maximize the value of resources Some examples of circular economy’s practices: Producing organic fertilizer from agricultural by-products, applying biosafety breeding, using renewable energy, using new Biogas technology 82 27 Please rate how frequently your cooperative implement these practices in production chain Frequency Practices Never Rarely Sometimes Usually Always Purchase environmental sensitive raw material Minimize the consumption of natural resources Turn by – products or waste into input material Dispose waste after treatment Make cleaner purchase from purchasing (purchase in more clean and green way, instead of only taking the price into account) Use renewable energy (For example: biomass energy, solar energy…) Apply new models of cultivation and husbandry towards environmental friendliness and biosafety Use auditing system to measure the economic and environmental performance regarding the 83 implementation of circular agriculture Use organic fertilizer, pesticides, and animal feeds 28 Does your cooperative use modern technological equipment and facilities that support reduce/reuse/recycle practices? o Yes o No o Planning to 29 Has your cooperative ever organized training activities for managers and employees that relate to circular economy? o Yes o No o Planning to 30 How often does your cooperative purchase, sell or exchange materials and waste with others in order to reuse and recycle? o Usually o Sometimes o Rarely o Never 31 To what extent you agree with the following statements: Level Statement Strongly disagree Disagree Agree Strongly agree Circular economy helps cooperative to gain more profits 84 Circular economy is important to gain sustainable development Circular economy can minimize negative impacts from the environment It is business ethic to put circular economy into action 32 Is your cooperative willing to change the business model to match with circular economy? o No o Maybe o Yes 33 Is your cooperative willing to invest in circular economy? o No o Maybe o Yes VI Motivations and barriers for the transition towards Circular economy 34 Please rate how important the following drivers for transition towards circular economy are for your cooperatives Level Drivers Not Slightly Somewhat important important important Important Very important There are technology developments that make circular economy easier to apply 85 Increasing profit and productivity by implementing circular economy Government policies and incentives towards implementation of circular economy Consumers' preference with circular products Non-tariff barriers from trade partner requiring changes towards sustainable development Possibility to minimize negative impacts from climate change There is a system of standards and specific indicators to evaluate the implementation of circular economy practices Job creation potential 86 35 Please indicate the degree of following barriers that your cooperative may face when implementing circular economy Level Barriers Very low Low Moderate High Very high Limitation of technologies that are needed for circular economy’s practices Weak economic incentives for implementing circular economy practices Higher priority for other issues rather than circular economy Lack of awareness and enthusiasm towards circular economy Existing laws and regulations are not supporting the transition Lack of business model and frameworks to implement circular economy Poor leadership and management towards circular economy High investment cost for the transition 87 36 Please indicate how important roles of the following actors are in the transition towards circular economy for your cooperative? Level Actors Not Slightly Somewhat important important important Important Very important Managers of the cooperative Alliances of cooperatives Organization Trade partners Consumers Government agencies (for example Ministry of Agriculture, Ministry of Planning and Investment; Ministry of Natural Resources and Environment…) (Thank you) 88