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UK should ditch circular economy drive, says thinktank

Britain’s impending exit from the EU offers the opportunity for the Government to jettison the circular economy (CE) package and develop a new approach to waste and resources policy, according to a report from an influential thinktank.

Policy Exchange claims there are significant shortcomings in the EU’s approach to waste and recycling, with unclear objectives and badly designed targets that are not in the UK’s interest.

Its report, Going Round in Circles, supported by FCC Environment but compiled independently, says the CE package will cost British businesses an extra £2bn during the next 20 years so ministers should use Brexit to define their own approach.

Policy Exchange’s head of environment and energy, Richard Howard, who co-authored the report, said the UK had made significant progress since 2000 in recycling and cutting greenhouse gas emissions from waste.

“But there are still significant issues. For example, households are totally confused about what they can recycle, with more than 400 different collection systems across the country. And, since 2011, the UK has spent nearly £1bn exporting waste overseas, where it is burned to produce energy – energy we don’t benefit from.”

Howard called the CE package “ill-defined and poorly thought through”.

“It focuses too much on the means rather than the ends. The UK needs to take back control of our rubbish and develop a more coherent set of waste policies which better serve UK businesses and households, as well as the environment.”

He queried a suggestion from MRW that several reports, including one from the Green Alliance and WRAP in 2015, had found that tens of thousands of net jobs would be created in the UK, depending on how the CE agenda was adopted.

“I have issues with that [argument] in general because why are you trying to use waste policies for job creation? Yes, you can create jobs but it does not consider the impact on other industries’ jobs.”

Later, Dustin Benton, the Green Alliance ’s acting policy director, told MRW the 2015 report and subsequent research had indeed found that there would be a net gain (more below).

Kristian Dales, FCC communications director, said the issues presented by Policy Exchange in the report were hampering business growth and development in the waste and resource sector.

“The fact that waste management companies are paying to export waste out of our country for incineration is simply not sustainable. It glosses over the fact that the UK urgently needs increased investment in its own waste infrastructure, which will not only enable us to better manage the waste, but will also help to safeguard the UK’s long-term energy security.”

He told MRW: “Generally we have a lack of direction from the Government in terms of policy. It’s nice to get an independent view of the marketplace. Within the CE package, it focuses on the ’economy’ part – and what makes the market work.”

The report says policy should focus on maximising resource productivity within the UK economy, in line with the Government’s emerging industrial strategy. It should also seek to minimise the carbon emissions and wider environmental impacts of waste management and resource use.

Recommendations include:

  • Local authorities should use one of three standardised systems for collecting waste and recycling
  • Government should encourage innovation in the recycling and reuse of materials, and help to develop markets for scrap materials
  • Government should also promote efficient forms of energy from waste
  • Household waste recycling centres should be collection points for reusable items

Dustin Benton, acting policy director, Green Alliance:

Our headline numbers (54,000 net UK jobs if we pursue policies akin to those in the EU’s CE package) show new jobs for people who are currently out of work, and who could gain new employment through CE activity, encompassing remanufacturing and servitisation as well as recycling. Bringing unemployed people back into work is a goal which all economists, from left or right, can agree is good.

Our economist did a detailed, dynamic analysis of the effects of CE activities on the labour market and accounted for direct job losses in affected industries like mining. Our report took into account that some new jobs (‘gross jobs’ in our analysis) would be filled by people transferring from other employment. Our methodology was peer reviewed by labour market economists at the LSE and the TUC.

The reason the CE is able to support more jobs than a linear economy is because it recovers more value from materials and products which would otherwise be wasted. It’s simply a more productive way of creating the goods and services that consumers want. And it has the additional economic benefits of providing new jobs at all skill levels, right across the country, particularly in areas where unemployment is high.

The UK is leaving the EU, but we shouldn’t dismiss all the ideas that have caught on in Brussels. Some of them, like the CE, are just good ideas. There are many reasons we should continue to develop a circular economy, but its potential address problems in our labour market while increasing the productivity of the economy is particularly compelling.

Sarah Heald, director of corporate affairs & investor relations for Pennon, owner of Viridor:

This latest report from Policy Exchange is a hard-hitting reminder of the need to seize the opportunity to deliver a ‘bespoke for Britain’ waste and resources policy post-Brexit. As a business investing £1.5bn in energy recovery, recycling and waste management across the UK, we want to see strong waste and resources policies at the heart of the UK’s Industrial Strategy.

This report speaks to the affordability challenge of EU recycling policy and the opportunity for a fresh focus on how best to deliver the UK’s environmental priorities in a cost-effective way. We need to go back to basics on bins, designing systems that attract next generation infrastructure investment, which serve the needs of UK households and manufacturers.




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