Title

Please provide a name for your action learning plan.

Circular Economy Portfolio - System thinking for a new strategic offer of the UNDP Bosnia and Herzegovina 

Challenge statement

Challenge statement: What is your challenge? (Please answer in specific terms: "Our challenge is that...”.)

UNDP in Bosnia and Herzegovina is interested in exploring how to apply the portfolio approach for a more strategic, relevant and coherent development offer in the area of circular economy as a lever to support the government, private sector and society re-think and re-orient the economic model towards sustainability. 

Background: What is the history of your challenge? What is causing or driving it? Who is involved? How does the current situation look like? What undesired effects does it produce?

At present, there are no development stakeholders who support transition towards circular economy in the country at a system level. With the draft circular economy policy framework in place, there is a strategic opportunity for UNDP in Bosnia and Herzegovina to capitalise on its strong expertise in the areas of economic development, climate action, governance and design a strategic offer that will support renewal of the economic model of the country, towards low-carbon economy. At the same time, with the broader circular economy agenda at the EU level in place, the EU in Bosnia and Herzegovina, through its Instrument for Pre-Accession Assistance, has also prioritised support to the country to transition towards circularity. UNDP has adopted its new Strategic Plan 2022-2025 that elevates UNDP’s aspiration to help achieve the SDGs and leveraging strategic innovation and the portfolio concept for change at scale. As a growing body of practice, UNDP globally is embracing the portfolio approach to develop new policy offers and capabilities in UNDP based on a system transformation logic, while nurturing interest and engagement from governments and donors to invest in this new logic.

Quantitative evidence: What (official) data sources do you have on this challenge that better exemplifies the importance and urgency of this frontier challenge? You can add text, a link, or a picture.

Circularity is a development opportunity for Bosnia and Herzegovina's economy, which is in the early phases of transitioning to a functional market economy. From 2015 to 2020, the average annual growth rate of the GDP was a little under 2%. In recent years, Bosnia and Herzegovina's per capita GDP has been roughly 30% of the EU average, and substantial efforts are required to achieve convergence and close the gap. Wholesale and retail commerce (14.57% of GDP), manufacturing industry (12.94%), public administration and defence (7.32%), and agriculture (5.6%) were the leading economic sectors in Bosnia and Herzegovina in 2019, according to the BiH Agency for Statistics. Industrial production has increased steadily in recent years due to economic expansion in major trade destinations, low labour costs, and a favourable tax climate. Small and medium-sized businesses account for 99.9% of all registered businesses in Bosnia and Herzegovina and over 70% of all employment and gross domestic product. From 2015 to 2019, the resource productivity of Bosnia and Herzegovina increased marginally; nevertheless, in 2016, there was a decline in productivity due to an increase in domestic material consumption. The year 2020 was characterized by the COVID-19 crisis, which led to a decrease in resource productivity, mainly due to a drop in GDP relative to roughly constant domestic consumption. In 2020, Bosnia and Herzegovina's economy consumed 40,5 million tons of natural resources, which is 9.8 percent more than in 2015, the base year. Compared to 2015, domestic extraction of non-metallic minerals grew by 25.8%. According to the Agency for Statistics of Bosnia and Herzegovina, around 11.7 tons of agricultural crops, minerals, metals, and fossil fuels were consumed per capita in Bosnia and Herzegovina in 2020, or 32 kilograms per day. In 2021, the import coverage by export was 66.6%. Bosnia and Herzegovina exported goods worth 10.5 billion BAM to the EU market, while imports were 14.5 billion BAM. In the context of waste management in Bosnia and Herzegovina, the rise of municipal waste in the country slowed significantly during the past year (1.2 million tons). In 2021, waste production per capita increased by 6% compared to 2010 despite a simultaneous decline in population. 74% of the population has access to waste management services, although the coverage varies greatly between urban and rural areas (80-90% in urban areas and 40-45% in rural areas).   Coverage of the population by the waste collection service has expanded little over the years and is hampered mainly by infrastructural and operational limits, the resolution of which needs substantial expenditures and additional cash. Waste that is produced but not collected contributes to establishing illegal dumpsites. Bosnia and Herzegovina's territory has more than 1,400 illegal dumpsites. Their number is reportedly growing despite a slight rise in the population covered by waste collection services and a number of measures to close such dumpsites. In addition, separate garbage collection is not systematically addressed, which is mostly due to a lack of or insufficient recycling facilities. In addition to the absence of facilities for sorting and recycling, there are no financial incentives for residents to sort their waste, and public knowledge of the importance of effective waste management is extremely low. A small percentage of industrial and hazardous waste is repaired and utilized by industry. According to 2018 estimates, less than 10%14 of total industrial waste is utilized as secondary raw material. The aforementioned statistics illustrate the situation of economic development in Bosnia and Herzegovina, which is based on a linear economy with a very low GDP and an export-oriented production sector that cannot make the transition to a circular economy on its own. On the other hand, BiH businesses understand the significance and benefits of the circular economy to their operations. 61% of organizations surveyed out of 338 are prepared to transition to conducting business in line with the principles of the circular economy, while over 80% understand the significance and contribution of the circular economy to the growth of their business. The high import dependence, export-oriented production sector, low level of recycling and reuse of resources, as well as the significant interest of the commercial sector in integrating the principles of the circular economy, indicate a great economic potential of the circular economy through which Bosnia and Herzegovina could reduce its reliance on imports, maintain values and strengthen the local economy, and reduce the costs of waste treatment and disposal a great deal. Circular Economy Portfolio Roadmap for Bosnia and Herzegovina is the source (final draft - still to be adopted)

Value proposition: What added value or unique value proposition is your Accelerator Lab bringing to solving this challenge? Why is it your Lab that needs to work on this challenge and not other actors within UNDP, other stakeholders in the country respectively? Why is it worth investing resources to this challenge?

The overall intent of the UNDP BIH circular economy portfolio is to design and manage a portfolio of development options in the area of circular economy to further contribute to the development outcomes and effects, such as reorienting the economy towards the circular and low-carbon model that drives sustainable growth, nurturing society's demand for more sustainable goods, behaviours, and lifestyle as part of the renewed economic model, as well as enriching authorities capabilities to effect transformative and just policy agenda that accelerates the transition towards the circular economy. The Accelerator Lab teams/Innovation and Integration Cell is part of the country office core team working closely with more than 15 other core team members on establishing this portfolio. The portfolio will also convene wide partnerships for change and leverage distinct knowledge, resources, and global expertise and its role as a policy advisor.

Short “tweet” summary: We would like to tweet what you are working on, can you summarize your challenge in a maximum of 280 characters?

From waste to wealth: Embracing circularity in Bosnia and Herzegovina's economy can spark innovation, create jobs, and protect the environment. Let's turn the circular economy into a circular opportunity!” By: ChatGPT 😊

Challenge classification

Partners

Learning questions

Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?

We want to explore how providers access and deploy knowledge on value flows to reduce quantitiy and the cost of resources and energy input, to ensure sustainable sector growth which is entirely demand drvien (effect: re-orient the economy towards a circualr and low-carbon model) 

Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?

TBD

Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?

TBA

Learning questions

Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?

We want to explore how digital tools can facilitate the identification of potential synergies and interaction between, for example, furniture industry value chain participants by supporting the exchange of information and matching resources between buyers and suppliers.

Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?

TBD

Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?

TBA

Learning questions

Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?

We want to explore how the government(s) can set in place the infrastructure that will incentivize the reduction of waste, ensure its more effective management and reduce the environmental impact of the sector (effect: nurturing society's demand for more sustainable good, behaviours and lifestyles...)

Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?

TBA

Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?

TBA

Learning questions

Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?

We want to explore how governments on the local/cantonal level can meaningfully invest through different financial tools (e.g.incentives, funds, investment, grants, etc.) into business' transition to circularity.

Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?

TBA

Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?

TBA

Learning questions

Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?

We want to explore how (re)-User(s) can change the demand culture towards sustainably-produced, for example furniture, and thus influence the accelerated transition towards circularity.  

Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?

TBA

Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?

TBA

Closing

Early leads to grow: Think about the possible grow phase for this challenge - who might benefit from your work on this challenge or who might be the champions in your country that you should inform or collaborate with early on to help you grow this challenge?

The UNDP BIH's circular economy portfolio is striving to support creating the enabling environment where the following three transformational shifts would be possible: • From extractive business models to circular models • From consumers to agents of change for responsible lifestyles • From fragmented and carbon-intensive policy agendas to outcome-driven government

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