Baroness Jones: Consumers and businesses can reap the benefits of the circular economy

How can we maintain a global economic model where high volumes of goods are produced from raw materials and sold to consumers who dump them as new fashions or items come along? A system that will inevitably become unsustainable.

The world’s population is set to increase from seven billion to nine billion by 2050, with new middle classes and demands for consumption. In the next 20 years we will need 40% more energy and water, and three times more material resources. Increasing demand is also driving up prices. The Green Alliance have estimated that world food prices have doubled over past the decade, with metal prices trebling and energy quadrupling.

At the same time, we are continuing to create huge waste mountains of potentially recyclable materials worth some £34bn, including precious metals and rare earths crucial for future production. This makes no sense.

Business and environmentalists are waking up to the opportunities of a Circular Economy that rejects the need for waste and replaces it with disassembly and re-use so that materials are used again and again. Those companies at the forefront of this revolution realise they must design products differently: for longer life with easily available spare parts and a repair service.

Samsung are already training a new generation of service engineers with this in mind. Other companies are developing leasing schemes, so the product ends its life back with the original manufacturer for stripping out and re-use. Companies like Jaguar-Land Rover are looking at a different set of nuts and bolts, researching new sustainable materials such as flax and cashew nuts to replace plastic. IKEA meanwhile, now claim that 98% of their home furnishings can be recycled.

We could all benefit from this approach, with reports estimating that it could create between 200,000 and half a million new jobs. Such sustainable practices would also bring down costs, plus improve customer service as businesses develop longer term relationships.  Regrettably in the UK, we have particular challenges in adapting to this new way of thinking. There are over 300 different systems of local recycling – a situation which even Ministers described as absurd.

As a result we are in danger of missing our EU target of 50% recycling by 2020. We have also failed to develop consistent markets for recycled materials such as glass, paper and plastics. And there has been a lack of leadership and financial support for organisations delivering change, including those spearheading voluntary agreements amongst the producers.

Once again, the EU has proved itself to be at the forefront on environmental initiatives; with the draft Circular Economy package providing both a vision and action plan. The proposals are underpinned by eco-design which will build in repairs, durability and recyclability – all rooted by economic incentives for greener products, supported by the Horizon 2020 fund. And also specifying EU targets for 65% recycling of municipal waste, 75% of packaging waste and a maximum of 10% waste to landfill by 2030.

The challenge for the UK government is whether it can seize the opportunity. Are they prepared to inspire businesses and consumers to reap the mutual benefits of the Circular Economy? And are they ready to fund initiatives which demonstrate the potential for transformation and sustainability? The answer will have to be justified to future generations, especially if they end up suffering the dire consequences of doing nothing.

Baroness Jones of Whitchurch is Shadow Minister within both the DECC & DEFRA teams in the House of Lords.

(This article was originally published on the Labour Lords blog )