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Clear policy signals will drive growth

“The greenest Government ever” was the promise made by the coalition five years ago, and is a claim repeated in the Conservative Party’s manifesto for 2015.

But did the coalition deliver on its promise? And what can we expect from the new Conservative Government during the next five years?

The coalition focused on energy and climate change policies, implementing the most significant change to renewables support mechanisms in more than a decade through the electricity market reform package of measures. The Department of Energy and Climate Change was spared significant budget cuts and pressed forward with a programme for change that included introducing the contracts for difference regime, the capacity market mechanism, an emissions performance standard and a carbon price floor.

However, Defra was the victim of budgetdeep cuts to its budget, constraining its ability to perform and resulting in it “stepping back” from making new policies relating to energy from waste (EfW), construction and commercial waste, and industrial waste.

The past five years have seen recycling rates stagnate, and England now risks missing the EU target of 50% household waste recycling by 2020. When Europe’s Circular Economy Package was published last year, Defra expressed concern about the ambitious recycling targets it contained, and fought a lengthy legal battle to protect the right of councils to commingle recyclable materials in their waste collections.

None of this paints a particularly positive picture in terms of the coalition’s contribution to waste policy in the UK. That said, the establishment of the Green Investment Bank was undoubtedly a boost for the waste sector, mobilising more than £3bn-worth of investment in the sector since 2012. The question is now whether it can drive a similar scale of investment in new recycling infrastructure as it has in EfW.

So what can we expect from the Conservatives during their term in office?

Liz Truss is to remain as environment secretary and will be required to outline further efficiency savings by the already stretched Defra. Other areas of focus are likely to include the circular economy, which is expected to be the subject of a more ambitious proposal from the EU by the end of 2015. So far Defra has made some encouraging noises, but there is no suggestion that it will intervene to drive investment in a circular or resource economy.

Defra

In terms of pledges affecting the waste sector, the Conservative Party Manifesto 2015 is pretty thin on the ground. Positives include a promise of start-up funding for promising new renewable technologies and research, which could benefit from novel EfW technologies.

However, on waste specifically, the focus seems to be on littering and small-scale fly-tipping, which the Tories propose to address through the use of fixed penalty notices, with the potential for higher fines than are currently imposed.

As the Environment Agency continues to grapple with organised criminal activity within the commercial waste sector, against a backdrop of significantly reduced funding and cuts to staff, these proposals do not seem to address the real issues.

It seems clear that the focus during the next five years will not be on the environment but on reinvigorating the economy and cutting the deficit. But the Government would be missing a trick if it were to ignore the potential of the waste sector to contribute to green growth and a more sustainable economy in the longer term.

While a continued focus on climate change is clearly important, the issue of resource management must not be allowed to slip down the agenda. The Government should resist the temptation for further deregulation and instead focus on clear policy signals that will drive growth in the recycling sector and enable investment in new waste management infrastructure.  

Fiona Ross is associate at Pinsent Masons

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