Earth Overshoot Day Emphasises Urgent Need for UK Government Support in Accelerating Circular Economy Growth
Green Alliance Report Highlights a Lack of Support for Circular Economy Businesses
As Earth Overshoot Day falls on August 2nd this year, a critical date when humanity’s demands on nature exceed Earth’s capacity for the entire year, the UK Government has been urged to step up its support for circular economy businesses. According to a report by Green Alliance, UK Government policies are hindering the scaling of innovative circular businesses and preventing the widespread adoption of circular business models.
The circular economy is a sustainable economic model that aims to keep materials and products in use at their highest value for as long as possible. This is achieved through better design and practices such as reuse, repair, remanufacturing, and recycling. However, the lack of understanding and imagination among policymakers, as well as ingrained consumer behaviours, are posing significant barriers to the growth of circular economy initiatives.
Green Alliance spoke to ten companies that are actively reducing carbon emissions and waste and identified several challenges faced by these businesses. Techbuyer, a company that refurbishes and resells used technology, highlighted that current tax rules result in businesses and consumers paying disproportionate amounts of VAT on resold goods, leading to multiple layers of taxation. Additionally, attitudes towards refurbished equipment, including misconceptions about quality and reliability, are limiting the market potential for such products.
Resale companies like Bambino Mio, which sells reusable nappies, encounter challenges in circular logistics, collection, cleaning, and redistribution. High upfront costs, convenience concerns, and cultural inertia also hamper the growth of circular economy businesses.
The Little Loop, a company renting children’s clothing, has made remarkable strides in reducing CO2 emissions and water consumption since 2019. However, it struggles against consumer habits of buying new products and competition from cheaper, lower-quality goods. Moreover, companies that lease goods encounter disadvantages compared to those selling products, as they often miss out on tax reliefs due to excessive asset holdings.
Green Alliance’s previous research indicates that the circular economy has the potential to create over 470,000 jobs and can particularly benefit regions with high unemployment rates. However, achieving a circular economy requires a new long-term national mission integrated into industrial policy. The UK Government has been called upon to develop concrete policies rapidly, as the Committee on Climate Change has criticized current policies on resource efficiency as insufficient.
Jasmine Dhaliwal from Green Alliance emphasized that consumers’ desire to make greener choices is often hindered by cultural inertia and government policies. Policymakers must recognize that cost is not the sole motivator for green choices and provide support to scale up circular businesses.
Earth Overshoot Day has been calculated to fall five days later than last year, but the progress is modest and not sufficient to meet the UN’s target of reducing carbon emissions by 43% worldwide by 2030 compared to 2010. To achieve this goal, Earth Overshoot Day would need to be moved by 19 days annually for the next seven years. The Global Footprint Network emphasized that urgent action is necessary, including increasing low-carbon electricity sources, reducing food waste, and implementing tree intercropping.
In response to the urgent call for action, the Department for Environment, Farming, and Rural Affairs has announced plans to reduce the use of new resources, promote the repair and reuse of existing materials, and increase recycling. More substantial and rapid support from the UK Government is essential to accelerate the growth of circular economy businesses, combat Earth Overshoot Day, and secure a sustainable and prosperous future.
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