The huge wasted economic opportunity of inconsistent recycling
Our new report, Wasted opportunities, marks the end of the second year for the Circular Economy Task Force of leading businesses. It reveals that outdated recycling systems are losing the UK economy £1.7 billion in wasted plastics, electronics and food.
The report comes at a time of transition for the circular economy. Our work over the past year has uncovered positive signals. Alongside task force members, we’ve talked to businesses ever keener to take up the idea and make the circular economy part of their values and their business model. With them are policy makers in Brussels, Edinburgh and Cardiff, talking of ambitious targets and policy support. In Westminster, enlightened politicians from all parties are beginning to explore the concept and seeking to incorporate the ambition to be more circular into their manifestos.
Government hasn’t taken on board the scale of the opportunity
But against this positive trend is the beleaguered Department for the Environment Food and Rural Affairs, with little resource or central government encouragement to be the driver of the circular economy, and the Department for Business Innovation and Skills and the Treasury have yet to fully take on board the scale of the opportunity.
Local authorities are stuck in an institutional model that has them still dealing with ‘waste’ rather than empowered to reap the value of resources, and unable to return that value to their citizens in any significant way. A false separation between household and business waste, the latter being at least nine times the volume of the former, hampers effective capture of valuable products and materials. And what little recovery incentive there is allows materials to flow abroad, bypassing what could be vibrant domestic industries.
A shake up is needed to realise the £1.7 bn opportunity
We need a shake up. In this report, we ask ‘What if?’ What if we see all waste as potential resource, no matter who generates it? What if we approach value capture as starting, not ending, with the reprocessors: the businesses that can return products and materials to productive use? What if we design collection and sorting according to their needs, not according to the outdated system that has grown out of a public duty to dispose of unwanted items, regardless of their value? What if we set out to achieve a circular economy?
The answer is that we could capture around £1.7 billion in unexploited material value, and unlock a £2 billion opportunity for private sector investment in factories and facilities to make a circular economy work. And this is before the environmental benefits are counted.
All of this is possible with today’s technology and business models. We’ve examined the mismatch between the materials systems we currently have and how a circular economy of the future might work, to show how the design of our system is blocking better outcomes. And we’ve identified how better materials loops can form the basis for higher value remanufacturing and reuse.
Two options for government
The report doesn’t offer a precise prediction about how a circular economy would work, but it does set some guidelines for business and government for redesigning the system. It proposes two ways central government could pursue reform:
1. set up a £250 million challenge fund to support new approaches and local authority and business collaborations;
2. make better recycling and reprocessing facilities at the right scale a priority in its national infrastructure plan.
Those who have already bought into the idea of a more circular economic future, including the task force’s members, will help to lead the effort. As the election approaches, these opportunities will look far more attractive than business as usual.
Julie Hill is chair of the Circular Economy Task Force