The Circular Economy Task Force’s analysis has found that the root causes of future insecurity of resources lie substantially in environmental problems: water scarcity, rising extraction costs for fossil fuels and limited land availability.
These increasingly constrain supply at a time when demand is growing. Greater visibility of globalised supply chains, alongside rising public concern about environmental damage, is only compounding these pressures.
Secondary supplies have much lower exposure to environmental risks, but these sources are currently lost to the economy because products aren’t designed for recovery and businesses aren’t incentivised to co-operate in recovery and reuse.
To address this problem, the Task Force proposes a new focus for the government’s industrial strategy. It needs to de-risk collaboration, set agreed sector-wide goals for recovery and stimulate businesses to adopt new, resource efficient business models. In addition, government should set design requirements to make products and materials easier to recover.
The governments of China, Japan, and Germany are all acting to secure resources for their industries. The Task Force will work this year to elaborate how government action can reduce risks for the UK.
Businesses can act ahead of government – indeed, many already are. Businesses can use long-term contracts and joint ventures to align supply chains and secure resources. If delivered at sufficient scale, resource recovery is usually cheaper than primary extraction. Looking forward, the Task Force will seek to identify the right scale for circular systems, to help businesses build the infrastructure needed to maximise the benefit of greater resource recovery.
Dustin Benton, senior policy adviser, Green Alliance