Why targets alone won’t build a green economy

müllThis post first appeared on Business Green.

With all the debate over whether non-binding EU 2030 energy and carbon targets are a statement of ambitious intent or resigned defeat, you could be forgiven for thinking that setting a target is all policy makers need to do to deliver a shiny green economy. But experience from the waste and resources sector has shown that targets are only half the story, regardless of how binding or not they are. Behind every successful target is a suite of more focused interventions, which is exactly what’s needed to make the shift to a more resource resilient economy.

Quality not quantity?
This isn’t to deny that targets matter. Without 50 per cent recycling targets the UK wouldn’t be the fastest improving country in the EU in terms of recycling performance. The same is true of the 2020 renewables target, which stimulated a step change in the uptake of renewables in the UK. But a closer look behind both of these targets is revealing. For energy, the renewables target hasn’t delivered the UK industrial benefits it should have. Political prevarication and poor industrial policy has pushed the investment in manufacturing elsewhere. There’s a similar story for recycling: reprocessors rightly complain that high contamination rates and unscrupulous exports of minimally sorted materials impede infrastructure investment. It should be a buyers’ market,  UK reprocessing capacity is dwarfed by the quantity of materials collected, but reprocessors aren’t building the infrastructure needed because it’s hard to get sufficient materials of sufficiently high quality to make reprocessing pay.

Ask a local authority why they can’t supply more high quality materials and they’ll say that budget cuts force them into lowest cost collection systems whilst still having to meet weight based targets. So they collect garden waste because it’s heavy and shove everything else in one box because householders like it and recycling performance is judged on weight collected, not what happens to the materials once they’ve been sorted and reprocessed.

This matters because it minimises the value, both environmental and financial, that can be recovered: glass ends up as road aggregate and yoghurt pots become car bumpers, both are better than nothing but are considerably less valuable than new bottles or pots.  The real shame is that a system designed for low collection costs probably ends up costing local authorities and council tax payers more due to the low sale prices of the materials collected.

A more targeted approach
To avoid this value destroying recycling system, these faults need to be addressed directly. Scotland’s Zero Waste Plan demonstrates one approach: it includes an ambitious recycling target (70 per cent by 2025), but also specifications for how recyclables should be collected and restrictions on landfilling and incineration, including a landfill ban for food waste. It’s this combination of high level targets and detailed standards that should give reprocessors and financiers the confidence to develop the infrastructure for turning recyclable materials into high quality manufacturing inputs. This infrastructure is big business: for anaerobic digestion alone, analysis Green Alliance will be publishing shortly will show how
co-ordinated policies could unlock investment worth up to £2.7 billion.

To go further than recycling will require more action to stimulate product redesign, enabling much higher value reuse and remanufacturing. Cross sector agreements for common design standards, such as limiting particular material types to particular applications, would make closed loop recycling easier. These could be delivered using sector specific councils, convened as part of the government’s industrial strategy or through a private sector based initiative. A good example of this in action is Unilever’s work to improve polypropylene recycling.

A third, complementary approach is to use the strikingly effective Ecodesign directive. This EU mechanism will save £158 per year off the average UK energy bill by 2020, nearly double the savings expected from the Green Deal, ECO and smart metering programmes combined. The UK government should lend its support to proposals to expand the remit of this directive to include material as well as energy efficiency, so better designed products can underpin new business models to keep goods in use for longer through leasing or remanufacturing.

Targets are useful for setting the direction of travel, but getting the infrastructure built for a resource resilient economy takes more than a single, top down intervention. If we want to capture the value of these new economic opportunities, we shouldn’t be afraid to go beyond targets.

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