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Circular economy

Carbon Trust welcomes new UK Parliament report on growing circular economy

24 July 2014

Linking taxation to the environmental impact of products, a more consistent approach to recycling across Local Authorities, and investment in innovation, could all help to grow the circular economy according to a new report from the House of Commons’ Environmental Audit Committee.

 

Linking taxation to the environmental impact of products, a more consistent approach to recycling across Local Authorities, and investment in innovation, could all help to grow the circular economy according to a new report from the House of Commons’ Environmental Audit Committee.

The report, Growing a circular economy: Ending the throwaway society, provides the committee’s recommendations to the government following an inquiry taking evidence on the subject from a number of businesses, academics and leading experts.

Some of the recommendations in the report include:

  • Introducing differential VAT rates based on life-cycle analysis of the environmental impact or recycled content of products, and tax allowances for businesses that repair goods or promote re-use.
  • Introducing producer responsibility schemes in new sectors, ensuring that businesses design products with end-of-life in mind.
  • Directing local authorities to take a more standardised approach on recycling, separating food waste, banning food waste to landfill, and ensuring recyclers receive compatible sorted waste products
  • Financing innovative technologies that support a circular economy through the Green Investment Bank.
  • Working closely with the EU to establish eco-design standards across a range of products, as well as taking steps towards a ban on products made from materials that cannot be recycled, or reducing taxes on those that can be.
  • Removing trade barriers for remanufactured goods by pushing for them to be treated in the same way as new products.
  • Extending buying standards for public procurement to include a greater emphasis on the recyclability of materials, as well as the inclusion of recycled or re-used content.
We had throwaway economics in the past, but that disposable society simply isn’t sustainable in the twenty-first century. Less than half of all the stuff we throw away each year is recycled and turned back into something useful, despite prices for raw materials rising across the world. Global food prices have roughly doubled since the beginning of the century, metal prices have trebled, and energy prices quadrupled. These trends look likely to continue as emerging economies expand and the world population grows to 9 billion by 2050. Unless we rethink the way we run our economy and do business in a different way, environmental problems like climate change will get worse and the cost of living and doing business in the UK could continue to rise. The good news is that with the right Government support we can stimulate UK manufacturing, create jobs, grow our GDP and reduce our environmental footprint. We have to create a more circular economy that rewards innovative businesses, values natural capital, and is resilient in the face of rising global resource prices.

Joan Walley MP,Environmental Audit Committee Chair

Despite increasing resource prices and the inefficiencies of waste, stronger signals are needed to encourage businesses to take action on ending the throwaway society. Many companies do recognise the potential in a shift towards a more sustainable circular economy, but currently only a handful of pioneers are taking the important first steps. The ideas put forward by the Select Committee are welcome as businesses need the right incentives from government, as well as being made to take greater responsibility for the long-term impact of their products and services. Efficiency, business model innovation and product redesign are all important elements in tackling the resource challenge. Consumer education and engagement by brands, as well as business models that deliver better value to customers must also be part of the mix. Change can only happen as scale once companies are convinced it will be better than business as usual, and the financial case stacks up. This requires clear examples proving that greener products and greener business models can be both sustainable and successful. The Carbon Trust has been working on this with Zero Waste Scotland, the High Speed Sustainable Manufacturing Institute, and corporate clients to make sure that the UK can reap the economic and environmental benefits of being more resource efficient.

Aleyn Smith-Gillespie, Head of Business Model Innovation at the Carbon Trust

ENDS

For further information please contact the Carbon Trust press office on 020 7170 7050 or email press@carbontrust.com.

About the Carbon Trust

The Carbon Trust is an independent company with a mission to accelerate the move to a sustainable, low-carbon economy. The Carbon Trust:

  • advises businesses, governments and the public sector on opportunities in a sustainable, low-carbon world;
  • measures and certifies the environmental footprint of organisations, products and services;
  • helps develop and deploy low-carbon technologies and solutions, from energy efficiency to renewable power
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