How the promise of a circular economy can create prosperity in the UK

There are ample opportunities to grow the UK's reuse and repair economy

The UK’s general election is now a matter of days away. While all party manifestos mainly focused on the energy transition and water quality in their environmental chapters, they also included nods towards resource efficiency and recycling.

Labour made a striking commitment to “moving towards a more circular economy”. The last Government committed to use resources more effectively and reduce waste in 2018 but failed to follow up this promise with concrete plans. So, why should the new government revitalise resources policy, and what will it need to do differently to succeed?

Using resources efficiently is good environmental policy. It cuts more carbon than most other climate policies, and could reduce emissions by two billion tonnes by 2050. This is equivalent to eliminating the entire combined annual territorial greenhouse gas emissions of the UK, France, Italy, Poland, the Netherlands, Belgium, and Austria, according to WRAP . It’s a particularly good way to rapidly and cheaply cut emissions in hard-to-decarbonise industrial sectors such as steel and chemicals.

With only half of the emissions cuts needed by 2032 covered by confirmed policy, the new government will urgently need to find ways to get back on track to meet legally binding UK climate targets.

An economic boost

While protecting the climate gives compelling reasons to prioritise resources, doing so will also boost the country’s prosperity, as our research for the Circular Economy Task Force shows.

Political leaders of all stripes have promised to get  the UK economy growing again, but this has proved elusive in recent years. Getting more out of the resources we use can help spur the growth our political leaders are banking on.

This will also translate to savings for consumers, helping to alleviate the cost-of-living crisis. We’ve shown that shoppers can regularly save 60 to 90% on resold clothing, compared to buying new. People looking to replace their phone could save as much as £300 by buying a resold device instead of a new one, saving themselves more than the equivalent of the average household’s monthly food budget. Reducing food waste, meanwhile, could save the average household £600 a year.

On average, researchers think that using resources more effectively in manufacturing could increase GDP by 3% by 2050. That’s before we take into account the risks of throwaway culture. The Green Finance Institute claims that damage to the natural environment could lead to a 12% fall in GDP, greater than that caused by the Covid-19 pandemic.

An ambitious resources strategy will create jobs in the industries of the future. Our analysis  has revealed that a much more ambitious approach to repair, remanufacturing, reuse and recycling could create over 450,000 jobs by 2035, including thousands of new jobs in occupations suffering high rates of unemployment.

Learning from the leaders

What should politicians do to realise these benefits? They would do well to look to the Netherlands, as some UK politicians already have. There, they’ve set an ambition to halve raw material consumption by 2030, complemented by specific goals for high- impact sectors like construction, the largest producer of waste and a major emitter of greenhouse gases.

Without a national resource reduction target to focus minds, the UK’s material footprint – the food, fuel, metal and mineral resources extracted for the UK economy – grew markedly in 2021, and is currently sitting at 16.5 tonnes per person per year. That’s more than double what the UN says is sustainable.

Green Alliance are not the only ones concerned about this. The Office for Environmental Protection states that statutory targets are “extremely significant” for environmental policy, and is calling for a resource use target. Our research shows that a target to bring the UK’s material footprint to within planetary limits would be effective in driving up action across the economy.

The Netherlands pushed better resource use across the whole of its government. And Stientje van Veldhoven, the Dutch cabinet member responsible for the environment when the commitment to reduce material consumption was made, promoted the circular economy internationally. She pushed EU Green Deal commitments on reuse and organised a 2021 World Circular Economy Forum to join the dots between resource use and climate change. Her enthusiasm meant all Dutch government departments backed the circular economy ambition, and the previous Dutch coalition agreement included at least 11 references to it. 

Joined-up focus

This contrasts with the situation in the UK, where policy responsibilities are distributed across departments. Here, without an understanding of the wider social and economic benefits, it can just be seen as a waste issue and left to the Department for Environment, Food and Rural Affairs (Defra). This department is critical of course – it owns much of the relevant legislation around resources, including producer responsibility and environmental targets.

But making more out of the resources we use needs to be a cross-departmental priority, like it is in the Netherlands. That’s how we can increase economic growth through improved resource productivity, while realising the benefits of a greener economy.

The Treasury is central, with its focus on growth and governmental spending. The Cabinet Office, which coordinates government priorities and leads on public procurement, must have a stake, as should the Department for Energy Security and Net Zero (DESNZ), as resource use drives carbon emissions.

There’s an important role for industrial strategy under the Department for Business and Trade. And the Department for Levelling Up, Housing and Communities oversees the resource-intensive housing sector. This is one sector that could make radical improvements in its resource use. We’ve shown that circular construction techniques and technologies available today could cut the sector’s upfront raw material use by 35% and associated carbon emissions by almost 40%.

Getting more from our resources means we can meet our needs more effectively, which will translate into economic resilience for the country and more money in people’s pockets. But to realise these benefits, the next government will need to do things differently.

Libby Peake is head of resource policy at Green Alliance, an independent think tank and charity focused on ambitious leadership for the environment.

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