Circular Economy

Lord Whitty Excerpts

Thursday 3rd March 2016 Lords Chamber

[Lord Whitty (Lab)]

My Lords, when economists first started talking about the circular economy some people ridiculed it as a bit of utopianism, as if we were going back to pre-commercial agriculture, when plants seeded themselves and everything was reused. After all, that was a biological circular economy. Once agriculture came to be traded, however, there were always opportunities to dump side costs and waste onto other parts of the economy and onto the environment. The linear economy which has developed since those days has all of those opportunities.

A couple of years ago I was involved in one of your Lordships’ sub-committee’s studies of food waste. We discovered that, 20 years ago, studies indicated that food waste arose in three roughly equal parts: on the production, distribution and consumer sides. We then discovered a considerable improvement in the efficiency at the distribution end. Much of that was for real: there were genuine processing and logistical improvements by supermarkets. However, much of it was simply shifting the cost of waste—and waste itself in some cases—down to the consumer or up to the farmer and small producer. The supermarkets were able to do that as a result of their dominant power. That is what the linear economy ends up doing.

There are standards for dealing with food waste but we have not yet got a situation where the food industry itself has changed the way it operates. The food chain needs to be circular, not linear. That applies to many other sectors as well. There are huge numbers of potential applications of the concept of the circular economy, not just in small and innovative businesses but in many large and complicated ones as well.

In metal-based sectors, we have already seen some large companies designing components so that they can be repaired, reused, refurbished and remanufactured and not, as has been the case for most of the last century, with built-in obsolescence. In the textile and clothing sectors there is a rather older pattern, where discarded clothes are not only reused through the second-hand market—or the “already loved” market, as it is now called—but also as fibre in upholstery, and for near-permanent use in insulation. The latter saves substantially on extraction in the mineral sector.

It can also apply in the energy sector, where decentralised CHP-based networks use genuine biomass waste—waste from local forestry, food and agricultural produce, not waste imported across two oceans—by circulating surplus heat through commercial and domestic district networks. They save twice over through the use of sustainable feedstock and by reducing the need for the extraction and carbon-creating use of fossil fuels.

The waste-management system itself needs to become more circular and rational. The 300 different systems that my noble friend referred to are very evident—my local tip is on the border of two district health systems with different separation and collection systems.

The circular economy is not some hippy utopian dream of a lost Arcadia but a better way of organising our economy with less waste, less costs, less depredation from extraction and fewer greenhouse gas emissions. In adopting it we can save the planet as well.