Stephane Arditi from the European Environmental Bureau spoke to Innovation News Network about the instruments that can be used to promote a circular mode of operation.
It is estimated that it takes the Earth 18 months to replenish the resources that are used and consumed each year. As resource use increases, so does the time it takes to replenish these resources; however, adopting circular economy principles across the value chain is one of the main ways we can resolve this issue. A circular economy solution would prioritise the reuse of resources, allowing time for them to be replenished, with products lasting longer and being built from material that is already in the system rather than made from new material.
Stephane Arditi from the European Environmental Bureau explains the main social, environmental and economical benefits of working in a circular economy.
The European Commission have estimated that working in a circular economy could generate up to 580,000 jobs for EU citizens. The idea behind the circular economy is to maintain the embedded value in materials for as long as possible. Expanding the lifetime of a product by repairing and reusing material can create many local jobs; converting products through manufacture rather than importing new ones.
Repurposing material through the remanufacturing, reusing and repairing process is likely to be performed locally, rather than shipping products and materials back to their country of origin. Locally performing new processes will expand the local economy and could generate a large number of new jobs within the industry. This has been documented in several reports, notably in the Impact Assessments by the European Commission on better waste management, prevention and recycling. There is a positive ratio between reusing or recycling the same amount of waste that we incinerate; there will be more processing of the material and reusing the materials will generate more labour. If only a small amount of waste is reused or recycled, fewer jobs will be created.
Automation is always a worry for job creation as the world speaks of the fourth industrial revolution. Of course, we can almost be certain that automating of recycling processes will become a thing of the future; in the same way we have automised car and automotive industry manufacture and production. Europe is still a long way off these possibilities of fully automated processing, notably for reuse and repair and therefore for the time being we will have to learn the processes ourselves and hire employees for the labour, making more jobs in the industry. This would also be helped if taxes are balanced from labour towards virgin resource consumption.
Economic benefits – to consumers and producers
Offering new services, such as leasing, servicing, after sales upgrading and repairing of materials also offer businesses new opportunities for innovation and manufacture. The circular economy agenda has been embraced by the business community as there are a number of expected economic benefits to creating new business models. Consumers are increasingly wanting to engage in more eco-friendly products and the business world now needs to catch up, however with more sustainable consumption patterns emerge, they need to be pushed and incentivised to become the new normal. That is where there is a unique role for public policy.
The European Commission is implementing the Ecodesign Directive, which outlines a number of minimum performance standards agreed by experts on energy products, aimed to force wasteful products off the market. The Ecodesign Directive creates a level playing field that applies to all businesses, including those producing outside of Europe. This is because in order to be placed on the market, the products themselves need to meet and respect the standards. It is a way to encourage businesses to re-think their models and to produce differently.
The initial idea behind the directive is to increase energy efficiency of products, which means lower bills and energy saving. Europe is already benefitting from energy savings that is estimated to be worth €490 per year per home by 2020 thanks to applied ecodesign rules. The EU market is estimated to be worth €1.8tr and much of this market can be transformed to be cleaner and greener.
The Ecodesign Directive can push the products in the EU market to being more circular, exactly as it performs for energy efficiency. Other instruments such as Extended Producer Responsibility, Green Public Procurement can complement these minimum design requirements usefully. The labelling of product performances according to a comparable and trustful scheme as exists with Energy Labelling can also help pull the market by orienting consumers towards the best products.
The European Environmental Bureau’s EU Ecolabel
At the European Environmental Bureau, we have identified that rewarding and incentivising businesses to produce more sustainably is a major factor in the transition to the circular economy. The EU Ecolabel is an instrument which identifies goods that are within the top 10-20% of the most environmentally friendly in their industry/category. EU Ecolabel is a voluntary scheme and manufacturers can only use the label after a certified third party has verified that the product fulfils the criteria of the scheme. We certainly need to promote Ecolabel schemes more throughout Europe.
The label allows consumers to identify the best products, and to make sustainable choices. It also helps them to pay more attention to how they consume and better understand the consequences of what they buy. By using the European Environmental Bureau’s Ecolabels, consumers can have confidence in the products they are buying as they have been verified and can be sure it is not a mere commercial green allegation.
The best way to transition to the circular economy is to encourage businesses and generate clear market incentives. Adding higher taxation rates on the use of disposable and non-recyclable materials or less sustainable materials will force businesses to change the way they are manufacturing and will push them to think about the materials they are using and where they come from. If a company produces more durable packaging with a longer life span, using cleaner materials and producing less waste, they should pay less tax and get rewarded through the producer responsibility scheme. This will create an incentive for businesses to shift from disposable solutions to longer lasting, reusable or recyclable solutions.
Policy manager on circular economy, products and waste
European Environmental Bureau