How much regulation does the circular economy need? – Inside track

This post is by Julie Hill, president of the Institution of Environmental Sciences and Green Alliance associate.

At some point in the 1990s a Treasury official remarked to me “what’s wrong with waste? It is good business… and this ‘circular economy’… sounds like ‘planned economy’… sounds a bit Soviet…”.   I’m not sure I had a convincing reply, succinctly explaining to a sceptic the many things wrong with waste is not as easy as one might hope, and ‘circular economy’ was relatively new in the environmental lexicon, at least in the UK.

Over the intervening years I am happy to say that the language and, to some extent, the practice has spread and gained currency, to the point that it was stated as one of Steve Reed’s priorities, as the incoming secretary of state for the environment in England last year. It has an act in its name in Scotland, a draft strategy in Northern Ireland and is considered integral to the wellbeing of future generations in Wales, already a leading recycling nation.

And then we had this summer. The narrative about the costs and benefits of environmental action has very much shifted towards the costs, and the ‘regulation is a barrier to growth’ mantra has come round for yet another cycle. It feels as if much is in flux, not least for this agenda.  The new environment secretary, Emma Reynolds, has not made the circular economy one of her prioritiesHopefully, that will change. The rapid review of the Environmental Improvement Plan, which includes a set of goals and statutory targets on waste and resources, has not emerged so we don’t yet know if there will be significant changes there.    The government is still going through the complex process of creating a draft of England’s first circular economy strategy and sector routemaps, having sought the advice of experts on its Circular Economy Taskforce.

The next step in the very delayed producer responsibility scheme for packaging is here, and has attracted criticism from some businesses on the detail of its implementation, but those shortcomings should not undermine the principle of extended producer responsibility.

Businesses don’t mind regulation but want it to be fair
Like many others in the field, I am left wondering what the prospects are for government-led instruments that will deliver against the government targets (in all four nations) and the promised circular economy. We have to face up to the fact that if it saw widespread benefits in furthering the circular economy, the market would offer more than the promising, but not yet universal, initiatives we see at the moment. We need more incentives, so examples being set by leading brands and first movers, for instance on reuse via ever more popular platforms, are rolled out more widely. Businesses don’t reject the idea of regulation, but they do want a ‘level playing field’.

Regulatory interventions are necessary and might even be sufficient without other incentives if done well. I have long thought that well designed and rigorous regulation that ensures all producers are held responsible for all the products they make, could achieve the same results as a suite of other interventions.  These are complex arrangements, but the crucial ingredients of a good system are that it is designed with a deep understanding of the incentives and disincentives in the supply chain, as well as insights into consumer behaviour. It should enable businesses to adapt their product designs and logistics to minimise recovery, refurbishment, re-marketing and reprocessing costs. Not at all a ‘planned’ economy, but one where businesses are free to create and compete within a framework that means they never relinquish responsibility for their products. At the moment, they largely let others clean up the mess left by their products, and much of the cost falls on the public purse.

We should all be able to see the benefits of a circular economy
Earlier this summer, in my capacity as president of the Institution of Environmental Sciences, I led a diverse group of players in a discussion on the future governance of the circular economy. We looked at the range of targets and initiatives in play in all four nations and saw a lot of work being done and plenty of results to applaud. But we also heard from many that one of the reasons for slow progress is the lack of an overarching vision for the life a circular economy would allow us to lead. How is it better? How does it further social as well as environmental progress?  How can businesses make money from it?  Any interventions by the state need to justify themselves against those tests, and rightly so. The best version of the circular economy is the one where all we notice its advantages, like better products, better value and less pollution. It needs the metrics behind it to show we have drastically reduced the environmental pressures from our consumption.

Ah yes, the consumption debate. Creating a circular economy is not going to be a complete antidote to the world’s ever growing hunger for resources. A conversation about decoupling consumption from wellbeing is the next stage of our evolution towards living sustainably on this planet.