Moving to a Zero Waste Society

For most of us, it can be difficult to stand back and see the context of our actions in the great march of progress. So waste expert and RSA Fellow Peter Jones offers some ideas on how a greater breadth of vision might impact the pace of change, and the economic and operational scale of the waste industry.

Although the UK is a laggard in a European and developed world context, it possesses a number of unique opportunities to progress at a dramatic pace.

But time is short and international knowledge exchange on how process problems can be overcome will form an essential part of this major shift in handling end use resources - in short - it is the industrial revolution which will characterise the 21st century.

THE UNDERLYING FUNDAMENTALS

Stripped down to the essentials, a strategic assessment of waste issues - globally and in the UK - must involve an understanding of the interplay between impacts arising from the post use management of scrap resources and the solutions available to be applied.

The second major background factor lies in the overall scale of the process. Much work has been undertaken considering resource flows at macro level in developed economies. After an initial period in the 80s and 90s when such work was questioned, it is now coming back into fashion - often as a more realistic basis of assessment than more narrowly focused lifecycle assessment (LCA) systems.

Defra has engaged the Wuppertal Institute to corroborate the relativities between UK and other developed western European countries analysed. For a population of around 60 million, around 600 million tonnes of raw material stock were being consumed in the UK each year to supply around 60 million tonnes of finished consumer capital and consumption goods for private personal use (excluding housing and social capital).

The Wuppertal work suggested a much higher figure, slightly in excess of one billion tonnes (excluding water) based on the embedded resource inputs in complex finished goods imported where resource consumption had occurred elsewhere in the global economy.

In consequence there is now growing realisation that this ratio of inputs to outputs in excess of 10:1 has to operate within the basic laws of thermodynamics. In effect the developed economies of the world are involved in running a pollution economy at a rate at which spaceship earth is failing to neutralise pollution and waste in solid, gaseous or aquatic form at anything like the rate that it is being produced.

THE EMERGENT TRANSITION FORCES

Against such a background there are grounds for optimism. Whilst we have discharged millions of years of carbon accumulation within the earth's crust back into the atmosphere in the space of 200 years, we have managed to move from outright scepticism to guarded acceptance in under six, that global warming has to be confronted.

Quite where those pressures for change will come from will influence the pace and direction of the waste industry in different countries in coming decades. In essence they will - broadly - originate from either the corporate, governmental or NGO pressure points or - the biggest pressure point of all - fundamental environmental disasters. Those pressure points will in turn have to operate within the context of free market systems.

In the corporate sector, major blue chips are beginning to realise the marketing opportunities inherent in adopting a high profile CSR agenda - of which waste policy forms a part - but it is still early days. As with much in business, timing is of the essence. Nevertheless, it can be salutary to consider waste as a threat to such businesses and brands in the same way that nutrition issues have impacted on global fast food brands or Fair Trade, timber certification standards and marine stewardship strategies have impacted on producers and retailers in other sectors.

Through the use of financial, budgetary and regulatory instruments applied in relation to inputs of resources and end of pipe taxes, this is kick-starting the process. Overall, the general system is also developing within an umbrella framework conditioned by Tradable Permits.

What varies between European states is the balance between regulation and taxes, and the use of "sticks" versus "carrots". In the UK that balance is as yet far from stabilised . indeed the extent to which improved resource efficiency should be left to the devices of the free market in a Friedmanite/Chicago school approach (which leans to Tradable Permits and intra-company competition where polluters reward the virtuous) is still undecided in comparison with those who prefer more classic socialist subsidy driven instruments, which provide artificial rewards to change behaviour.

Also, in the UK that process is made additionally complex because "Environment" is not the recognised preserve of a single selected ministry and the reality is that the ministries of local government (ODPM), environment (DEFRA), industry (DTI), regulator (Environment Agency) and Treasury all compete to claim precedence in implementing or managing different elements of these fiscal, budgetary and operational mechanisms for change. Increasingly the shortcomings of this lack of coordination will have to be recognised and there is likely to be a review of international best practice exemplars to find a way through the resultant fog.

INTERNALISATION OF EXTERNALITIES - THE PRIVATE SECTOR AND INDUSTRY

The UK economy has evolved since the early 1800s into a series of discrete industry groupings focused around the inward supply of specific goods and services.

It is thus logical to assume that the most efficient mechanism for managing those products when they become scrap is likely to best revolve around those inward supply chains given their predisposition to knowledge and expertise coupled to the opportunities for economies of scale in end life management systems.

This concept of "Producer Responsibility" is backed by recent government pronouncements and is fast gaining ground within the EU. Indeed, in the UK, there are now emergent dates for the implementation of these concepts which will impact on around 15 million tonnes of physical consumer goods moving through the household, industrial and commercial dustbin economy.

Inevitably, such a process is not exactly welcome to a number of supply chains and no matter how diverse their products or interests, the process of acceptance can be both slow and fairly negative. In the UK this is certainly the case - in part because reduced environmental impacts are perceived as threats to bottom line performance.

Nevertheless, change is occurring and blue chip companies lead the charge in recognising that improved environmental standards can create significant opportunities for market share gain and brand positioning. Indeed, due to substantive reductions in brand value which have occurred in fast foods, retailing and other sectors (as a result of cavalier approaches to emergent scientific evidence or public opinion), major brands are now rethinking their approach to the environment.

This is especially so given that brands are now unsupported by vertically integrated manufacturing processes - supply chains have been delegated out to hundreds or thousands of suppliers who operate in geographically remote points of production and sub assembly in places where NGOs and activists are increasingly searching for evidence of environmental or social exploitation.

PUBLIC SECTOR ISSUES

Household arisings of solid waste from domestic sources in the UK amount to a mere 8% of the total yet they represent a politically sensitive tip of the larger iceberg. This sector is also the least sensitive to pricing signals in the market as a result of a split between contracting authority for collection and disposal between local and area government.

Subsequently, policy instruments tend to focus on annual subsidies amounting to around £600 million, intermingled with a heavy reliance on targets to drive recycling rates up and organic inputs to landfill down. As a consequence of target setting, Tradable Permits are likely to result, and are viewed with trepidation by the majority of Public Officials.

Additionally, the driver of direct charging on households is viewed with huge trepidation by local and central politicians. This timorousness is difficult to appreciate when a typical UK householder pays around £4,000 in tax per annum for local government, of which waste accounts for £50 per annum (1.2%).

Historically, government at national level have been obsessed with domestic waste arisings only. From a waste sector point of view, point of origin will become increasing irrelevant. Economies of scale and the need for high utilisation of expensive intermediate handling facilities will drive integration between household, commercial and industrial arisings.

Such trends in the UK will be dependent on the pace at which appropriate end-life processing technologies are selected and achieve planning approval at local level, as well as on output composition and the preponderance of landfill. The combination of regulations, directives and financial instruments is about to bring about the biggest shift in UK waste handling systems seen since the Environmental Protection Act 1990.

The nub of the challenge is that we have between 10 and 15 years to shift from end life processing systems based on landfill storage for geological time periods (which are neutralised over 30 years) to shift to physical, mechanical and chemical treatment systems which neutralise it in anything from 30 hours to, at most, 30 days.

Such a shift will occur for around 50 million - 60 million tonnes of material . the rate depending on the pace at which the landfill exit gate closes as fewer and fewer replacement sites are consented. Yet there remains a fundamental communication problem, coupled to political indecision, which threatens to drive up the building pressures on available exit routes.

The UK private waste sector refuses to invest in newer, more sustainable technologies because the economic signals that could provide a reward for the incremental cost of the latter (around £30-£40 per tonne compared to landfill) simply are not forthcoming. There is insufficient understanding on the justification for that cost increase . which approximates to around £10 per tonne due to added labour costs, £10 per tonne for incremental capital costs/interest charges and £10 for higher maintenance charges.

THE RESOURCE ECONOMY

Against this confused and uncertain backdrop a more macro approach to an understanding of the resource economy is likely to prove fruitful. In overall terms the waste management industry in many parts of the world is an end pipe manager of scrap raw materials. The inorganic fraction is sizeable in volume terms (75% of the 440 million tonnes produced in the UK) but it is the organic fraction in which governments are most interested . in terms of global warming potential, degradability, reusability and resource intensive in terms of their original production.

The factors used in selecting appropriate options at local level are based on quite simple indicators of negative and positive value. But all is not quite so straightforward in terms of logistics costs, operating costs, payments for net outputs, receipts from Tradable Permits, capital intensity and technical risk.

It is the complexity and dynamic of the interaction of these forces over time which will provide the greatest challenge and excitement for waste sector practitioners in coming decades - certainly in the UK.

The technology options are vast and the levels of sophistication will move the waste industry from a bucket and spade industry to one requiring substantial investment in terms of process technologies - be they thermal, mechanical or biological.

In the UK that challenge is not insignificant - if 250 of the 360 wide licence landfill sites currently accepting high carbon content material shut over the next 20 years (and they are closing at the rate of around 25-30 per annum) they will need to be replaced by around 2,500-3,000 smaller facilities.

The major proviso lies in whether the public will accept single hit - probably thermal - process plants handling 500,000 tonnes per annum plus, per site.

THE INDUSTRIAL DIMENSION

For industrial and commercial producers, the reaction will probably lie in encouraging sector collectivisation to maximise tonnage/kilometre ratios for retrieved materials and maximise bargaining strength. Those factors will also be accelerated by targets for Producer Responsibility.

Strangely, such "clubs" are crystallising across industry sectors on the basis that major brands that compete head to head in the inbound (retail) market find it strange or uncomfortable to cooperate in the outbound (waste) economy.

There is also a recognition of strange vertical and horizontal integration as we enter the new waste economy as embedded carbon in completely different waste materials is recognised as energy, soil substitute, reusable raw material input stream. This produces interesting cross sectoral alliances, and waste companies have a key brokerage role in accelerating such strategic alliances.

THE MASS BALANCE APPROACH

It was for this reason that we decided to commit funding to the development of a wider understanding of material flows in the economy. The opportunity was presented by the UK Landfill Tax Credit Scheme regulations in 1997 and - although these were amended in March 2003 - over 5 years it was possible to commit around £8 million of funding to the creation of a range of resource flow studies in the economy.

The objective of all these studies is to accelerate internal understanding in the selected area of study with regard to the scale and significance of the non-financial resource flow system under their control. The industrial revolution since 1800 has inevitably led to the development of sophisticated value chains as measured by units of currency. These financial valuations are inappropriate, however, wherever environmental goods are supplied on a subsidised basis to a specific generation - the weaknesses inherent in this are now becoming readily apparent as those subsidies to one generation pile up as costs to those which follow (whether in terms of medical, engineering, social or biodiversity impacts) for subsequent generations.

The intention is, therefore, to close the resource flow loop, raise resource efficiency and reduce those net externality inputs which currently represent major dysfunctionalities in our so-called developed economies. In the UK, obstacles to progress need to be tackled in 3 distinct phases with kick-start initiatives from government (step 1) driving revised pricing signals into industrial and commercial supply chains via Producer Responsibility (step 2) finally resulting in transitional process technologies which re-secure segregated materials for reuse as substitutes for non-renewables at the start of subsequent consumption processes (step 3).

It sounds simple, but achieving significant orders of magnitude of resource consumption reductions represent the greatest challenge to the global economy in the 21st century.

On the upside, global waste industries across the planet have a substantive opportunity to become active catalysts in this process - indeed they are probably in pole position if companies, academics, regulators and legislators familiar with waste seize the opportunity before them on a cooperative basis.

These key trends in society will not abate - they will grow and intensify and if we fail to address them in the context of resource efficiency then we will have failed untold millions of people in future generations. Now is the time - now is the moment!

For more information, please contact: Peter Jones, Biffa Waste Services Ltd via email: peter.jones@biffa.co.uk or visit: http://www.biffa.co.uk.


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