13 October 2017
On 17 October 2017, there will be a Welsh Government debate on the circular economy. This blog post looks briefly at what the circular economy is; what progress Wales has made towards developing a circular economy, and what the potential benefits and challenges may be.
What is the circular economy?
The circular economy is an alternative to the traditional linear economy of take; make; use; and dispose. It is a restorative system, where products, components and materials are kept in use for as long as possible, and the materials are recovered and regenerated at the end of a product’s life. Such an approach is intended to reduce resource inputs and waste throughout the supply chain. The circular economy requires goods to be repaired, redistributed and reused, rather than relying solely on waste recycling. It should operate at all levels from households and local authorities to retailers and manufacturers.
What progress has Wales made towards a more circular economy?
The Welsh Government’s strategy Towards Zero Waste (TZW) (2010) established waste prevention and recycling targets and effectively set Wales on a path towards developing a more circular economy. It involves every section of society and is supported by sector plans for sectors ranging from municipal waste to construction and demolition.
Wales is performing well in terms of recycling. It currently has the highest recycling rate in the UK, the second highest in Europe, and the third highest in the world. Authorities had to recycle 58% of their waste by 2016-17, rising to 64% by 2019-20 and 70% by 2024-25.The figures are reviewed every three months and added to a rolling 12-month provisional total. The latest figures are for the 12 months to the end of March 2017, with the final data released in October. Provisional data for the 12 months to March 2017 (published in August) revealed an increase of 4% on the previous year’s recycling rate of 60%. But despite this excellent performance, recycling is only part of the jigsaw, and further action is needed to move towards a circular economy.
The Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths, has set out that driving forward policies to support delivering a circular economy in Wales will be one of her key priorities. Earlier this year the Welsh Government announced a £6.5 million ‘Circular Economy’ fund (10 March 2017). Beginning in 2019, it aims to help Wales reach recycling targets set out in the Welsh Government’s waste strategy Towards Zero Waste, and help businesses to transition their services to align with the ‘circular economy’. Whilst announcing this fund, the Cabinet Secretary for Environment and Rural Affairs, said:
This [fund] will help businesses save money by becoming more resource efficient and resilient, an approach that will deliver numerous environmental benefits including less waste and reduced CO2 emissions.
Wales is one of 10 partners from 6 European countries who are part of the European funded project Circular Economy for Small and Medium Sized Enterprises (CESME).This provides funding and support to identify best practices and provide guides for SMEs to become included in the circular economy.
What benefits could a circular economy bring to Wales?
According to WRAP, adopting a circular economy would provide the following benefits;
- waste reduction;
- creation of a more competitive economy;
- enable emerging resource security/ scarcity issues in the future to be better addressed;
- help to reduce the environmental impacts of production and consumption both at home and abroad; and
- a study by the Green Alliance and WRAP predicted the creation of 30,000 jobs in Wales.
The Ellen MacArthur Foundation also highlights that adopting a circular economy minimises risks to the system through the management of finite resources and the management of renewable energy flow. A report by the Ellen MacArthur Foundation predicted savings for Wales of over £2 billion per year.
A statement by Carl Sargeant, Minister for Natural Resources (4 March 2016) highlighted how adopting a more circular economy in Wales could help deliver the 7 well-being goals in the Well-being of Future Generations (Wales) Act 2015. For example; helping to reduce greenhouse gas emissions (‘A Resilient Wales’); and contributing to the ‘one planet’ resource use goal (‘A Globally Responsible Wales’).
What are the challenges facing the development of the circular economy?
The European Environment Agency (EEA) published a report on the Circular economy in Europe – Developing the knowledge base (18 January 2016). It describes one of the key challenges of developing the circular economy as the current lack of information available to inform decision making such as understanding consumption dynamics and finance mechanisms.
Additionally, the report describes that friction between the existing linear economy and the circular economy are likely to develop as “some traditional businesses and their employees are likely to suffer in the transition to a circular economy”.
A blog article by the UCL Institute for Sustainable Resources (10 March 2014) highlights three major challenges to achieving the circular economy;
- Integration of the entire product life cycle from raw material extraction to disposal (or reuse/ recycling) can be done either through intensive collaboration between companies or single ownership of the product chain, both of which have disadvantages and could be complicated and costly to set-up.
- Linking up different production chains creates a web of complex interdependencies that can leave the economy vulnerable to disruptions and may hamper competition.
- The environmental benefits can become lost amongst the conversation around the economic benefits of the circular economy. The exact relationship between circularity that maximizes profits and circularity that minimizes environmental benefits is unclear.
The Welsh Government has committed to reviewing the Towards Zero Waste strategy, and will launch a consultation on the refresh in July 2018.
The Research Service acknowledges the parliamentary fellowship provided to Moya Macdonald by the Natural Environment Research Council, which enabled this blog to be completed.