Forty years after the 1972 Club of Rome report, Limits to Growth, we are at a crossroads. Wasteful lifestyles, primarily in the industrialised countries, have caused ecosystem decline, resource constraints and an increasingly unstable climate. Meanwhile, a growing population and much-needed increases of per-capita income in low-income countries are putting further pressure on resources.
The EU legislative proposal, The Circular Economy Package, presented in July 2014, was withdrawn by the Juncker Commission earlier this year under the pretext of deregulation. After heavy criticism and accusations of yielding to Confederation of European Business pressure, the commission has promised the package?s relaunch.
The business community has often seen environmental policymaking as a threat to competitiveness – but there are reasons to view resource efficiency, instead, as an opportunity. This new report considers a number of policy options and investments that would help advance a circular economy and benefit the climate and job market. These include:
- Strengthening existing policies in renewable energy, eco-design and emissions trading.
- Establishing specific resource efficiency targets for materials where scarcity looms or the environmental impact of extraction is serious – rare earth metals being a case in point.
- Strengthening recycling and reuse targets to help reduce and process waste and residues, and putting limits on waste incineration. Reducing landfilling in Europe is a priority – but to swap this for rapidly expanding waste incineration is not a solution.
- Using public procurement as an incentive for new business models, moving from selling products to selling performance.
- Making the circular economy a core part of EU climate policies. Most climate change mitigation strategies are sector-based and focus primarily on energy use. But the Swedish study shows the climate benefits of using products for longer. It also shows that carbon emissions can be reduced significantly by clever design, reuse and recycling.
- Launching investments to support the circular economy – both at EU and national level.
- Rethinking taxation: lowering taxes on labour, increasing taxes on the consumption of non-renewable resources and removing VAT from recycled materials. Automation means manufacturing requires less manpower than before. On the other hand, all the services around a product in a circular economy – from sustainable design, to maintenance, upgrading, repair and reuse ? require more, rather than less, labour. Shifting taxes would accelerate the transition to a circular economy and help balance the threat of losing jobs in a digitised economy.