How moving towards a circular economy can drive productivity

Marcus Gover, CEO WRAP

It was good to see resource efficiency as part of the Government’s Industrial Strategy Green Paper. This approach has the potential to deliver significant increases in the UK’s productivity, jobs and growth, as well as carbon and other environmental benefits, which is what I said in WRAP’s response.  

In welcoming the current proposals for including resource efficiency in one of the strategy’s seven ‘pillars’, WRAP suggests that an ambitious approach which embeds resource productivity and circular economy concepts as central to the strategy, would have the greatest potential for delivering the benefits of improving living standards and economic growth which is the overarching vision of the Government’s strategy.

The Department for Business, Energy and Industrial Strategy, announced its intention to build an industrial strategy that addresses long-term challenges to the UK economy and invited responses to the subsequent green paper, which sets out the vision for the strategy, along with early commitments.

WRAP’s response focuses on how moving towards a circular economy can drive productivity and boost the economy and makes suggestions for areas for early action.

Like all advanced economies, the UK uses a large volume of material resources, which are not being used sustainably. That’s why we focus on the food, textiles and electrical sectors which have a significant impact, for instance the UK wastes 10 million tonnes of food each year. Moreover, 30% of clothes and 40% of waste electrical and electronic equipment currently ends up in landfill. 

Our response highlights that moving to a circular economy model could enable us to address these sources of inefficiency in the UK economy by reducing the UK’s dependence on imports; increasing the resilience of supply chains to external shocks, building a repair economy and supporting UK manufacturing and exports. 

There are significant employment opportunities too, our ground-breaking 2015 report with Green Alliance, which argued that up to 500,000 jobs could be created across the UK by 2030 and that unemployment could be reduced by between 50,000 and 100,000 people.

WRAP’s contribution says that early action in investment, innovation and infrastructure would be particularly beneficial in helping the strategy to deliver its aims.

It suggests that setting out a stable, medium to long-term platform which ideally includes long term price signals could help industry to focus their investment on the most resource efficient opportunities similar to the development of the landfill tax. The Industrial Strategy could also encourage the development of innovative new business models to meet customers’ needs, and new ways of working through targeted investment and by promoting collaboration between industry and academia.

It stresses the need to develop the infrastructure, including recycling and remanufacturing plants and waste collection, which would be required if we wish to capture more of the economic benefits of resource productivity here at home.

Ultimately, the Industrial Strategy presents the UK with a golden opportunity to move from a linear model, dependent on virgin raw materials to a circular economic model, which can create GDP and employment growth from the more efficient use of the raw materials and goods already in the UK economy. 

Our own research, as well as others, has shown that unless businesses move away from these linear models, resource supply disruptions coupled with rising and increasingly volatile prices will result in multi-million pound losses and undermine economic growth.  

We are excited about the opportunity to work with the Government and businesses and people to reduce their impact on the environment, while securing economic growth across the country.