What will a future economy constrained by access to raw materials that we now take for granted look like?
It’s an issue that is moving rapidly up the business and environmental agenda. Earlier this year EEF surveyed executives across Industry to find out what they perceived as the biggest threats to growth. The Eurozone crisis? Access to finance? Accessing the right skills?
Surprisingly 80% of respondents said access to raw materials was a risk to growth. One in three said it was their top risk.
Material prices have since stabilised. But for how long? With rapid development in emerging economies, three billion people are expected to join the ranks of the world’s middle class within the next 20 years, putting yet more significant upward pressure on material prices in future.
The government’s Resource Security Action Plan, published in March, attempts to address some of these concerns. But we think it doesn’t go far enough.
We were not alone and there is now widespread concern about the environmental degradation associated with our material consumption as well as access to the materials that a vibrant economy will require.
On the positive side however, there is a healthy willingness to examine where we go from here, starting with the government’s Resource Security Action Plan which needs to be bolder, wider and more visionary.
We believe this is not only vital from an environmental perspective, but also vital to ensure the integrity of our economy in the future. Without it we are concerned that it leaves us open to significant, future resource shocks.
We believe that even in fiscally constrained times there are low-cost options available to the government to strengthen their Action Plan.
Firstly we need an Office for Resource Management to coordinate activity across Whitehall departments. We also think government can do more to educate and engage the entire supply chain and those that influence it – including politicians, designers, producers, retailers and consumers – on this agenda.
The scope of the Resource Security Action Plan should be widened to cover a broader range of materials and there should be a commitment from government to utilising better existing data on material and waste flows in our economy.
The quality of the material we recycle is hugely important to manufacturers – it helps to reduce energy and water consumption and can help manufacturers remain competitive and reduce dependency on imported materials.
We would like government to realign current targets to focus on quality as well as quantity so that more recycled material can be re-used. If we are considering restricting key materials from landfill then they should also be banned from energy from waste plants unless there is an environmental or economic case for doing so.
Furthermore, government can help deliver a level playing field for UK manufacturers and domestic reprocessors of waste by reviewing some perversities in the packaging system which encourage waste to be exported for treatment and recycling. Finally we want government to explore resource efficiency incentives and review producer responsibility regimes.
Sooner or later we need to move to examining the fundamental concept of a circular economy.
This refers to an economic model which moves on from the current one of extracting resources, making, selling and disposing products to one where they are designed, maintained and serviced to prolong their life, at the end of which the materials are reintegrated back into new products. In short, this model will design out waste all together and is the vision we need to move to in the future.