The Next Economy
New Report Urges UK Government to Move Towards Circular Economy

The UK Environmental Audit Committee has released a new report – Growing a Circular Economy: Ending the Throwaway Society – which calls for lower taxes for businesses that repair or reuse goods; mandatory municipal waste separation systems; longer warranty periods for consumer goods; banning food waste from landfills; and increased funding for agencies that promote transitioning to a circular economy.

The Committee was appointed by the British House of Commons to review government policies and programs in terms of their contribution to environmental protection and sustainable development.

“We had throwaway economics in the past, but that disposable society simply isn’t sustainable in the twenty-first century,” said Joan Walley, Member of Parliament (MP) and Environmental Audit Committee Chair. “Less than half of all the stuff we throw away each year is recycled and turned back into something useful, despite prices for raw materials rising across the world,” she added.

The report recommends that the Government take steps to reform taxation and producer responsibility regulations to reward companies that design greener products; base differential tax rates on the environmental impact or recycled content of products and consider tax breaks for businesses that repair goods or promote their re-use. It also wants the UK Green Investment Bank to finance innovative technologies that support the circular economy; better alignment of policies for recovering resources and generating energy and asks that the circular economy concept be embedded into the UK’s industrial strategy.

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“Unless we rethink the way we run our economy and do business in a different way, environmental problems like climate change will get worse and the cost of living and doing business in the UK could continue to rise” said Walley.

The report says that a circular economy maximizes the sustainable use and value of resources, eliminating waste and benefiting both the economy and the environment and offers an alternative to the predominant present approach where resources are used for one purpose and then discarded. It notes that “the idea is not new, and is associated with a range of concepts such as 'Cradle to Cradle' design and 'industrial ecology', which draw inspiration from biological cycles and emphasise the importance of optimising the use of resources in a system over time. A circular economy includes a range of processes, or 'cycles', in which resources are repeatedly used and their value maintained wherever possible.”

The Committee wants the UK Government to support EU proposals to increase recycling rates to 70 percent by 2030 - While England has improved its recycling rates from 11% at the beginning of the century to 43 percent, the report points out that this has started to plateau. Recycling rates in Europe are the highest in Germany (65 percent), followed by Austria (62 percent) and Belgium (57 percent).

It also recommends a ban on sending food waste to landfills (as Massachusetts is set to implement in October) - just 400,000 tons of food waste is separately collected for organic recycling out of the 7.2 million tonnes thrown out by British households every year (less than 6 percent). Ireland requires households to separate out food waste and Scotland is introducing a landfill ban on food waste.

The report criticized the Government’s current approach to the issues as lacking ambition, leadership, and a strategic plan to achieve systemic changes linked to industrial policy. It says that while some businesses are adjusting their business models and becoming more resource efficient, the Government must do more to ensure that the right conditions are in place so that many more can shift from a linear approach to a circular one.

“We heard from business how successful green taxes such as the landfill tax had been in driving change in the waste industry,” said Walley. “We need the same strong tax signals from the Treasury for the Circular Economy.”

The report also urges the UK government to work more closely with the EU to establish eco-design standards across a range of products to make them easier to repair, upgrade, or recycle. By working with industry sectors to set longer minimum warranty periods for consumer products and to encourage businesses to adopt more resource-efficient business models, UK manufacturing, create jobs, grow the GDP and reduce the UK environmental footprint, advises the report.

A report released earlier this year by the World Economic Forum (WEF) in collaboration with the Ellen MacArthur Foundation (EMF) said that over US$1 trillion a year could be generated for the global economy by 2025 and 100,000 new jobs created within the next five years if companies focused on building circular supply chains to increase the rate of recycling, reuse and remanufacture.

Back home Stateside, Arizona State University is collaborating with Dutch partners to create the world’s first regional plan based on the principles of a “circular economy”. The initiative will create a regional visioning and planning strategy that will close resource loops in the most efficient, economical and sustainable manner possible.

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