Report: Circular economy could deliver 80% of UK's next carbon budget

By embedding circular economy principles in major policy frameworks, the UK could deliver 80% of the additional emissions cuts needed to meet its Fifth Carbon Budget, which covers 2028-2032.

The UK consumes natural resources at more than twice the rate considered sustainable

The UK consumes natural resources at more than twice the rate considered sustainable

That is according to a major new report from the Aldersgate Group today (15 July), assessing the policy gaps between the UK’s ambitions on decarbonisation resource use and its legislation in these areas.

Entitled ‘Closing the Loop: Time to Crack on with Resource Efficiency’, the report expresses concerns with the delayed implementation of the Resources and Waste Strategy – the first major update to policy in this field for more than a decade. The Strategy was first published in December 2018 but consultations initially tabled for 2020 have been pushed back in light of Covid-19. Included in the Strategy are measures to unify household recycling for plastics; introduce a national food waste collection service and mandate new Extended Producer Responsibility (EPR) requirements for businesses manufacturing hard-to-recycle products such as tyres and textiles.

The Aldersgate Group makes the case for accelerating the implementation of the EPR requirements, stating that they will have a “rapid impact in improving product design”. Complementing these measures, the report argues, should be new eco-design standards and lifecycle assessments for products including electronics and electricals. E-waste is notably the world’s fastest-growing domestic waste stream and the UN puts recycling rates globally at less than 18%.

Other recommendations from the report include adding shorter-term targets to the Environment Bill and introducing variable VAT rates which would reward businesses for implementing more resource-efficient business models. This could cover minimising waste across the value chain by innovating processes and technologies, or switching to business models that are not ‘take-make-and-dispose’, such as repair, resale and rental. Additionally floated is the need to scale up financial support from the central Government to these sectors. These ideas have previously been supported by MPs on the Environmental Audit Committee (EAC).

The Aldersgate Group report claims that these policy shifts – as well as communications campaigns to ensure that businesses and individuals are aware – are unlikely to come about without greater collaboration between Government departments. The Group claims to have heard evidence that key policy packages “have received limited buy-in beyond the Department for Environment, Food and Rural Affairs (Defra)". It is urging departments including the Treasury, the Department for Transport (DfT), the Department for Business, Energy and Industrial Strategy (BEIS) and the Ministry of Housing, Communities and Local Government (MHCLG) to collaborate more closely on circular economy issues and to work with devolved administrations. Wales is named as being further advanced on the circular economy than the other UK nations.

Additionally outlined in the report are recommendations to ensure that the UK is not importing goods that would undercut these new circular economy standards. It proposes that circular economy principles are developed and added to the sustainable development chapters of all post-Brexit trade agreements.

Climate and jobs benefit

Motivators for transitioning to a circular economy in the UK extend far beyond resource efficiency, the report highlights. There are also significant opportunities to improve skills, create jobs and drive progress towards national climate targets. According to the report, 517,000 jobs could be created across the UK by 2030, generating a net gain in Gross Value Added of £9.1bn.

It also states that a circular economy could deliver 80% of the additional emissions reductions the UK will need to make to deliver its Fifth Carbon Budget. The Budget was set in 2016 and covers the period from 2028-2032. It will require the UK to limit annual emissions to an average of 57% below 1990 levels. The UK is not on track to deliver this reduction at present and failure to comply with the Fifth Carbon Budget will risk the UK’s ability to comply with the Sixth, which is a key milestone on the road to net-zero.

We know that the overconsumption of resources is driving both climate change and nature’s degradation and yet it is very rarely addressed by Government policy,” Green Alliance’s head of resource policy Libby Peake said.

The good news, as this report outlines, is that there are many simple actions the Government could – and should – be taking to improve the situation which would not only be good for the environment, but also the economy and the public. It really is time to get on with it.”

The Aldersgate Group’s executive director Nick Molho added: “Improving resource efficiency across the economy makes sense on all counts: it reduces demands on the environment, cuts emissions, makes our economy more resilient to supply shocks, and can grow supply chains and create jobs in areas such as recycling, repair, remanufacturing and reuse.

"The Government set some good ambitions in 2018 but the time has come to move to the delivery phase. What we need now need is an urgent, cross-government and systemic approach that improves product design, supports the development of new business models and engages citizens to help drive down resource consumption.”


Join the conversation at edie's Earth Overshoot Day webinar 

Thursday 29 July 2021 marks Earth Overshoot Day - the calendar date at which humanity will have used up nature’s resource budget for the entire year.  

To mark the occasion and help organisations of all sizes and sectors accelerate the transition to a circular economy, edie is hosting a free webinar at 1PM BST. Hosted in association with Centrica Business Solutions, the hour-long session will feature expert speakers from Elvis & Kresse, ReLondon and Centrica Business Solutions. 

For a full agenda and to register for the webinar, click here.


Sarah George



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