Resource efficiency: What the Government must do…

The next UK Government will need to make a number of significant fiscal and regulatory reforms in order to accelerate the UK's transition to a circular - and therefore more prosperous - economy.

That’s the view expressed by the Aldersgate Group – an alliance of leaders from business, politics and civil society – which has today (3 March) published a new report highlighting the key policy recommendations for better-coordinated policy instruments, government leadership and business action to deliver a fully-functioning circular economy.

“To make a real difference, a more coordinated approach supported by a better regulation agenda is needed to make resource efficiency the easiest and most financially rewarding choice for businesses,” said the Aldersgate Group’s executive director Nick Molho. “The report that we are launching today sets out the critical actions required to accelerate the transition to a more resource efficient and therefore more prosperous economy.”

The report – Resource Efficient Business Models: the roadmap to resilience and prosperity – sets out the Aldersgate Group’s views on how the Government can help to transform the UK economy into one that is fit for a resource-constrained future. The recommendations fall into six categories, with ‘key asks’ listed for each.

Among the recommendations is the creation of an Office for Resource Management – something that a number of other influential lobbies and think-tanks have called for in recent days. Reports suggest that a dedicated department would, theoretically, strengthen the government’s ability to respond to resource supply threats and help businesses boost productivity.

Policy recommendations:

1) Leadership and prioritisation

– Government must conduct an urgent ‘Stern for Resources’ review of the UK’s exposure to resource security risk and its impact on the UK economy.

– The new parliament should establish an Office for Resource Management to develop a Resource Efficiency Action Plan and coordinate action on better regulation.

– Government should adopt a circular economy approach to procurement, with a clearly-signalled forward plan, prioritised by sector.

2) Stability and consistency

– Policy instruments that define medium and long-term resource efficiency goals should be developed, leaving the method of delivery to the market.

– Government must provide robust and stable policy to ensure that short and medium-term business confidence is supported.

3) Fiscal incentives

– Government should instigate tax reforms that encourage and reward the most resource-efficient businesses, for xample simplifying the existing VAT system for remanufacturers and considering zero VAT for re-used items.

– Inconsistencies in the taxation system that penalise resource efficiency should be removed, such as rewarding new build over refurbishment in the construction industry.

4) Rationalising environmental regulation

– National regulatory positions, codes of practice and certified standards should be rationalised to allow appropriate
quality secondary materials and components to be handled in the same way as primary materials.

– Government should support the harmonisation of standards, through existing national and international standards organisations, that reflect circularity in products at a consumer level.

5) Valuing externalities

– Government should phase in a mandatory corporate reporting scheme to identify use, recycling/recovery rates
and impacts of critical resources by UK businesses. A best value regulatory approach should be used to ensure this process does not become burdensome to business.

6) Design standards

– Government, working with industry and wider stakeholders, should establish minimum standards in key sectors that support the transition to a circular economy.

– Government must work with the EU to formulate clear eco-design standards across products, working with standards bodies such as ISO to spur collaboration, competition and innovation.

– Government must work to devise more effective WEEE targets that recognise value as well as weight

Today’s report also sets out the initial findings of an European Commission-funded project, REBus. The three-year project, of which the Aldersgate Group is a key partner, will support 30 pilot schemes to test how businesses can achieve a 30% reduction in resource consumption by 2020. Pilots are being run by large organisations and SMEs, all receiving technical expertise and support.

Steve Wallace, an Aldersgate Group director who leads its REBus project work, said: “To secure long-term prosperity our nation must be resource-efficient. A growing number of forward-thinking companies are adopting resource-efficient business models and, through our involvement in the EU LIFE+ funded project REBus, we are supporting more to do the same.”


Luke Nicholls

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