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Hong Kong’s waste problem: A stinking trail of missed targets, data errors and misdirected efforts

Tom Yam says a government audit of Hong Kong’s waste reduction efforts makes clear who is to blame for our growing mountain of rubbish

In the private sector, a chief executive accountable for such rotten results would have been fired.If an organisation misses targets, mangles statistics, mismanages capital assets, underestimates costs, undertakes trifling projects and underperforms in a critical task year after year, will it survive?

The answer is a resounding “yes” if it is the Environmental Protection Department.

The department’s data, used to manage ongoing programmes, is rubbish (pun intended)

The Audit Commission recently issued a report on the government’s management of the garbage, officially known as municipal solid waste, which Hong Kong produced over the decade to 2015. The Environmental Protection Department is responsible for waste management and has an annual budget of HK$2.05 billion to do the job.

By every measure, including the department’s own as set out in its Policy Framework for the Management of Municipal Solid Waste (2005-2014), and the Hong Kong Blueprint for Sustainable Use of Resources (2013-2022), it fell short.

Key performance indicators for waste management have all deteriorated. Per capita waste disposed daily increased from 1.27kg in 2011 to 1.35kg in 2014. Waste recovered and recycled dropped from 49 per cent in 2009 to 37 per cent in 2013. Food waste increased from 3,227 tonnes per day in 2004 to 3,648 tonnes in 2013.

The landfill in Tseung Kwan O. As of 2013, 63 per cent of Hong Kong’s waste was still dumped in landfills. Photo: SCMP Pictures

The landfill in Tseung Kwan O. As of 2013, 63 per cent of Hong Kong’s waste was still dumped in landfills. Photo: SCMP Pictures

The policy framework set a target of disposing of 25 per cent of waste in landfills by 2014. As of 2013, 63 per cent was still dumped in landfills.

The department’s data, used to manage ongoing programmes, is rubbish (pun intended). The Audit Commission cites a litany of statistical errors. The amount of waste recovered for recycling was inflated because the department included waste imported for processing. Its forecast of a 50 per cent drop in food waste from school lunches was overstated because only 12 per cent of students ate lunch in school. It could produce no quantifiable data to explain its changing assumptions about the serviceable life of the landfills. It now claims that all landfills will be full by 2018. The Audit Commission believes they should last some years beyond 2018.

The department priced phrase 1 of the Organic Waste Treatment Facilities, to recycle mainly food waste, at HK$489 million in 2010. But because it omitted or significantly underestimated the cost of some components, the cost surged to HK$1.589 billion in 2014.

Target dates for rolling out the producer responsibility scheme for six products, based on the “polluter pays” principle, have not been met. Only the first two phases of the plastic shopping bag levy have been implemented, in 2009 and 2015, six to eight years behind target. The scheme has yet to be implemented for the other five products – waste electrical and electronic equipment, vehicle tyres, glass bottles, packaging materials and rechargeable batteries.

Only four of the 12 government departments have signed up to the Food Wise Hong Kong Campaign, which promotes reduction of food waste, two years after its launch.

With great fanfare, the department did launch a series of waste reduction, recovery and recycling initiatives. Their impact, however, has been inconsequential. Net reduction of plastic shopping bags disposed of in landfills in 2009-2013 was 11,544 tonnes, or an infinitesimal amount of total waste disposed.

The HK$308 million EcoPark was trumpeted as a hi-tech hub but the industry remains at the lowest rung of the value-added ladder. Photo: May TseAs of June, only 4.6 per cent of the 43,091 households in 16 public rental housing estates were taking part in the food waste recycling scheme, fewer than half the department’s 10 per cent estimate. Though not discussed in the Audit Commission’s report, the recyclable waste collected in the three-colour recycling bins is no more than 900 tonnes per year, or 0.02 per cent of the waste generated.

Here’s where the department’s record truly stinks: the Audit Commission’s 2015 report on the dismal state of Hong Kong’s waste management echoes its 2008 report

The HK$308 million EcoPark in Tuen Mun was trumpeted as a hi-tech hub to develop a recycling industry. But the industry remains at the lowest rung of the value-added ladder, mainly collecting, baling and packaging waste materials. One operator started 24 months later than stipulated in the tenancy agreement. In another lot, operations started five years later. From August 2008 to June 2015, a HK$16 million pilot food waste treatment plant was operating at only 22 per cent of capacity.

Despite all these failings, here’s where the department’s record truly stinks: the Audit Commission’s 2015 report on the dismal state of Hong Kong’s waste management echoes its 2008 report. At the time, the Legislative Council’s Public Accounts Committee expressed serious concern over the management of the Environmental Protection Department as well as “deep regret and sadness that the secretary for the environment lacks a sense of urgency and is not proactive enough” in tackling the problem of municipal solid waste. Seven years later, nothing has changed.

The audit report describes a mismanaged organisation that lacks coordination with other government departments, produces inaccurate information and statistics, and engages in inconsequential efforts to tackle waste reduction and recycling. It cannot effectively manage ongoing programmes, resulting in missed targets and deteriorating performance.

In the private sector, a chief executive accountable for such rotten results would have been fired. Yet the previous environment secretary, Edward Yau Tang-wah, is now director of the Chief Executive’s Office. The current one, Wong Kam-sing, is this week attending the UN climate change conference in Paris. The Environmental Protection Department’s director, Anissa Wong Sean-yee, has been in her job since 2006. Despite the audit report, all three are likely to keep their highly paid jobs in Hong Kong’s non-accountable government.

Tom Yam is a Hong Kong-based management consultant. He holds a doctorate in electrical engineering and an MBA from the Wharton School of the University of Pennsylvania


Nearly three times more plastic bags are being dumped in landfills than the number of bags reported by retailers under the 50 HK cent levy scheme, Director of Audit David Sun Tak-kei says in his latest report.

This throws into doubt the Environmental Bureau’s much-touted success of the levy scheme in reducing plastic bags and whether shops are accurately turning over levy collections to the government.

About HK$172 million from the levy was lost from 2010-13, The Standard calculation based on the audit report shows.

The first phase of the levy was implemented in July 2009 and by the end of last year a total of 3,543 shops of 48 chain groups – including supermarkets, convenience stores and personal-item stores – were registered to charge the levy. They were required to submit quarterly reports on the number of bags distributed.

The collected levy was then transferred to the Environmental Protection Department.

This April, the levy scheme was renamed to a charging scheme. It was extended to cover the entire retail sector with more than 100,000 outlets.

The stores get to keep the charges and are no longer required to keep records of distribution of bags. The audit director’s Report No 65 found that based on the department’s records, 228.9 million bags were distributed by retailers from 2010 to 2013. This compared with 572 million bags in landfills – a discrepancy of 2.5 times.

Last year, registered retailers reported their outlets distributed 70.7 million bags and paid HK$35.4 million in levies to the department.

However, the department did not have landfill survey statistics for 2014 yesterday.

The biggest discrepancy was seen in the first year: 153 million bags were dumped in landfills, 3.1 times the reported 49.8 million bags in 2010. Next was in 2012 when 156 million bags were found in landfills, or 2.6 times the 59.5 million bags reported.

The Audit Commission said the number of plastic bags in landfill surveys might not accurately reflect the effectiveness of the levy scheme, and asked the department to consider doing consumer surveys to assess the scheme instead.

But a spokeswoman for the Environment Bureau said the bags counted in landfill surveys covered all those collected, including bags from non- registered retailers.

She added that even some outlets of registered retailers may not fall into the requirements of paying the levy, as only those that sell food and drink, medicine or first-aid items, and personal hygiene or beauty products in the same shop are registered.

Secretary for the Environment Wong Kam-sing said the department would consider the audit’s advice.

Green Sense suggested the government raise the plastic bag charge to HK$1 to reduce use.

“We are worried that consumers have grown to a more relaxed attitude toward paying the 50 cents tax after six years of the implementation,” said project manager Gabrielle Ho Ka-po.

HK’s recycling rate inflated for years

An Audit report has found that the Environmental Protection Department (EPD) has over-estimated the amount of waste recycled in Hong Kong for years, which it says can drastically diminish the effectiveness of the government’s waste management program.

In a report released on Wednesday, the Audit Commission said the department’s estimate that 52 percent of the city’s garbage was recycled in 2010, was likely overstated by more than a third, because the figure included recyclables that had been imported into Hong Kong for processing and export.

The Auditor said this practice had distorted the effectiveness of the government’s efforts in waste management. It said the department should get more accurate data to better gauge its performance.

The report also criticised the EPD for taking “piecemeal actions” in the past few years to reduce the amount of food waste in the city.

The government aims to reduce food waste disposal at landfills by 40 percent by 2022. But the watchdog found that some correctional services institutions and public hospitals are generating large amounts of food waste.

The Secretary for the Environment, Wong Kam-sing, acknowledged the problems and said the government will do what it takes to address the issue. For example, he said the first food waste recycling facility will be completed in 2017.

Wong added that the EPD will consider adopting a new method for estimating Hong Kong’s recycling rate.

Overflowing landfills, unwanted humans, and a new anthropology of waste

Why has the largest man-made structure on earth, until recently, been a landfill? Are waste pickers environmental heroes, or is their work first and foremost inhuman? Do we treat some humans the same way we treat waste?

Researchers from three continents met at Overheating’s recent workshop in Oslo to discuss what new insights can be gained about the state of the world by looking at what we throw away or deem superfluous. Their goal is to develop a new anthropology of waste.

“Archaeologists have always used trash to reconstruct the past, but in social and cultural anthropology, waste has not figured prominently. It is ubiquitous, growing and symbolically and materially significant, but remains an understudied subject”, saidThomas Hylland Eriksen, the director of the Overheating project.

A growing amount of waste is one of the many overheating symptoms of planet Earth. “Since 1992”, Hylland Eriksen said, “the amount of waste produced by households in Norway has doubled. Fresh Kills, a landfill in the US, was the largest man-made structure in the world when it was closed in 2001. In the Pacific, there are ‘floating islands’ of bits of plastic that cover the area of Texas”, he stressed.

“The world is too full”

“The overflowing landfills, polluted rivers, and filthy beaches may be the most visible and visceral expression of the Anthropocene—the era of total human domination on the planet. They indicate that ‘the world is too full’”, he said.

Waste, according to anthropologists, is not just made up of discarded material. Thomas Hylland Eriksen, who wrote a book on rubbish (“Søppel”, in Norwegian only) four years ago, prefers to view waste in a very broad way:

“Waste, to me, is also a huge unintentional consequence of modernity. You want information and you get confusion and distractions; you want individual freedom, and you get counterreactions like identity politics; you want affluence, and what you get is a ruined environment. So waste can, in fact, be seen as a key aspect of overheating. It also reproduces and strengthens global inequalities when the waste of the rich is dumped on the worlds of the poor.”

For him, there are also links to the current so-called refugee crisis:

“There is a logic of exclusion and expulsion to the way we handle waste, which is paralleled in the way people are being treated: redundant humans, sometimes spoken of as ‘human waste’, people who were not meant to be, who are ‘warehoused’ in refugee camps, slums or prisons, who are superfluous, poor consumers, and inefficient producers. European discourse about the current refugee crisis in the Mediterraneanhas a whiff of this attitude”, he said.

This broad perspective on waste dominated the presentations during the two-day workshop.

Humans as waste?

The issue of humans who are treated as “waste” to be ridden of was discussed by several participants.

Cathrine Thorleifsson and Ronald Stade addressed the racist way Roma migrants often have been treated in Norway and Sweden. In the eyes of the authorities, Roma are “unwanted bodies” that with their “dirty camps” “pollute our surroundings” and therefore have to be “tossed over the fence”.

The Oralman (“repatriates”) in Kazakhstan have not received a much warmer welcome, although they “share an ethnicity with the people who reject them”, explained Catherine Alexander. The Oralman left Kazakhstan as a result of Stalinist oppression, and returned in large numbers after they were welcomed back by the Kazakh government in the early 1990s. But most people there did not recognize them as “one of us”, and, instead, treated them as unwanted and odd strangers, or as elements of “excess” or “spillover”.

Many workers within today’s capitalistic system, Elisabeth Schober said, do not feel valued either. At her fieldsite, workers are treated as “disposable human material that could be hired, fired and replaced with great ease”. Schober has been on fieldwork at a shipyard in a booming area in the Philippines, where the costs of labour are among the lowest in all of Southeast Asia.

Learning from waste pickers

People who deal directly with waste are also often placed in this category. Their role in cleaning up the city is in many parts of the world disregarded. Cairo’s informal waste collectors, the Zabaleen, have been prosecuted by authorities for decades. They are seen as a major source of the city’s waste problem, rather than contributors to its solution, Jamie Furniss stressed.

Furniss is one of several anthropologists at the workshop who has been on fieldwork among waste pickers, waste collectors, and scrap workers.

Their research, among others, questioned popular images of these people, and opened the invitation for rethinking attitudes to waste and waste management.

One of the questions their research raised was: What is the meaning of waste when Cairo’s Zabaleen are able to recycle more than 80% of the material people throw away?

Are waste pickers a reliable symbol of poverty when, as Caroline Knowles learned during her fieldwork, women who collect plastic bottles on a landfill in Ethiopia earn in a day what a waitress earns in a month?

Aren’t some of the informal waste pickers and waste workers in reality entrepreneurs? Shouldn’t waste picking be called “labor”?

After his fieldwork in an Indian scrap yard, Andrew Sanchez found it necessary to rethink theories of labor. He met several scrap workers who—despite harsh conditions and the social stigma attached to it—expressed satisfaction in the work process itself. The reason for this, Sanchez suggested, is that their work is transformative. An important part of their work is to find new uses for objects whose value has expired.

The fresher the waste, the more precious it is

The situation of waste pickers and workers, of course, depends on their ethnographic context. Some are better off than others whose work can be quite dangerous.

In his fieldwork, Freek Colombijn found an interesting pattern among waste pickers in Indonesia who collect waste from door to door and sort it in temporary garbage dumps: the fresher the waste, the more precious it is; therefore, the income is higher and the people are more satisfied and wish for no other work. Conversely, the closer to the final destination (landfill) where people work, the more monotonous their work is, and people seem to work with less diligence and joy.

So, does waste actually exist? For waste pickers in poorer countries, waste is first and foremost a precious resource that can be traded in a market. From the perspective of Warao indigenous people in Venezuela, Christian Sørhaug said, garbage heaps are even regarded as sites of abundance. He compared landfills with forests: “Materials in the wastelands (bikes, cassettes with salsa music, toys for kids, metals, etc.) afford a range of possibilities, much the same way that lianas, trees, and animals in the wetlands do”, he said.

“It is not really garbage as long as it still has value,” said one of the waste pickers Elisabeth Schober met in the Philippines. In her fieldsite, the growing number of people who try to make a living from this valuable, discarded material on the landfill are often viewed as a problem. Penny Harvey observed the same tendency among planners in Peru where she studied the development of a new waste management system. Waste has been transformed, and instead of asking how to dispose of it, one now asks how to extract its monetary value.

Turning abandoned buildings into precious mines

Also in the USA, people have become more interested in transforming so-called waste into something useful. In places that struggle with depopulation, abandoned houses have been turned into “mines” for revalued building materials like wood, slate tiles, and bricks.

“This might be turned into high-end restaurant tables”, said Catherine Fennell, while she showed a picture with material that was gathered from an abandoned gym in Detroit, Michigan.

In Detroit, reclaimed materials have become ubiquitous in everything from pizzerias, and airport juice bars, to yoga studios.

“Material recovery and reuse has been prevalent throughout human history”, the anthropologist explained. “Yet as practiced in the U.S. over the past several decades, it is seen as an ecological response to the fact that construction and demolition debris makes up half of all material in U.S. landfills. This movement is closely associated with triple bottom line thinking, a business philosophy that seeks to generate social and environmental benefits alongside economic ones.”

This transformation of materials from waste to something useful—or the other way around—has been of interest to anthropologist Michael Thompson since he first wrote about it in 1969 in the magazine New Society and then ten years later in his classic, “Rubbish Theory”.

Recycling and re-evaluation

It was not only recycling that he was writing about, but re-evaluation. Objects that were considered rubbish can regain value as antiques or historic homes.

“When you recycle a building”, he explained at the workshop, “the building itself disappears. Re-evaluation is something that happens in our heads, and the building itself stays the same. It’s our attitude to the building that changes. Once we see an old decaying building as sadly neglected glorious heritage rather than as awful rat-infested slum, our behavior towards it changes.”

These attitudes to what constitutes rubbish, and what is ascribed value and what not have been changing with the times for different reasons.

Anthropologist Ola Gunhildrud Berta told about changes on the Marshall Islands after it had become part of global capitalism.

The transition from homegrown to storebased food, a process that was started by the Japanese colonial administration, led to more and different waste. “A few generations ago, most of the disposable household waste came from biodegradable materials (palm leaf plates and cutleries, coconut cups, etc.)”, he said. “Now it is mainly plastic and hermetic.”

Tommy Ose sees the large amount of food waste as a sign of households being alienated from the larger food cycle; first, by encountering it on the supermarket shelves, then discarding the residue in our bins so that other people make it disappear.

“Rather than being remembered for its potential use value as human nutrition, the necessity for life—without which there would be no life—food now often becomes a mean to other ends: a fit body; gourmet taste; or lifestyle displays of competence”, Ose said who is researching food waste in Northern Norway.

“The current around-the-clock availability of all kinds of food, regardless of seasons of the year, in seemingly endless amounts, makes us look at food in a more short-time perspective, as disposable. We value food less, more of it gets wasted as we prioritize spending our time on other things than food management and care,” the anthropologist explained.

For a new anthropology of waste

Nearly 50 years ago Mary Douglas wrote “Purity in Danger”, a book which famously defined waste as “matter out of place”. Thomas Hylland Eriksen hopes a publication that is based on the workshop presentations will be able to develop a new anthropology of waste.

“‘Purity and Danger’ was one of the most important anthropology books of the mid–20th century, but we need to graft Douglas’ perspectives on societal cohesion and the boundaries of the body onto a historical and global anthropology able to say something not only about timeless questions, but also about the rapid changes of the present world”, the anthropologist said.

“I certainly hope we can achieve this with our planned publication. The workshop was a thrilling experience for several of us, with many very powerful presentations”, he added.

Elisabeth Schober, who had the idea for this workshop, was also very happy about the outcome.

“It was a high-risk workshop. No one in Overheating is working on waste as a central theme, but we had many stories about waste and wondered how to make sense of them”, she said.

“Every anthropologist probably has some notes on waste. But unfortunately these notes are often in danger of being discarded by us. I think”, she concluded, “we should make waste one of the central issues that we study and not let it be something that we just discard.”


As it is, Hong Kong’s waste reduction plan is a waste of money

Your report, “Waste targets ‘set to be missed'” (October 31), on new data showing that more rubbish was dumped in Hong Kong’s landfills last year, came as no surprise. The latest figures from the Environmental Protection Department show per-capita waste disposed daily rose to 1.35kg last year from 1.33kg in 2013, while waste recovered remained at 37 per cent.

This is the second highest amount of waste disposed and the lowest proportion of waste recovered in the past 10 years.

This worsening trend – that is, more waste generated and less waste recovered – confirms my observation that the Environment Bureau’s target of reducing per-capita waste disposed daily by 40 per cent to 0.8kg, and increasing the waste recovery rate to 55 per cent by 2022, is pure fantasy (“Realm of fantasy”, May 19). With no mandatory separation of waste at source and no vibrant local industry making products from recyclable waste, the bureau fantasises about copying the success of South Korea and Taipei by simply imposing waste-charging. It can’t understand that it has to both decrease the waste generated (through waste-charging) and increase the waste recovered to achieve such success.

The fact is that the bureau’s every measure to increase waste recovered and recycled has had negligible effect. No trial waste-separation programme in public housing estates has ever led to city-wide implementation. The three-colour recycling bins, introduced in 1998, have never collected more than 900 tonnes of recyclable waste per year, a mere 0.02 per cent of waste generated.

Likewise, the HK$1 billion fund to support the recycling industry will not increase the waste recovered. Hong Kong’s waste recovery industry comprises small operators whose biggest costs are property rental and collecting/sorting/transporting recovered waste. Yet they can use the fund only to buy or upgrade capital equipment.

Moreover, their profitability, and hence incentive to increase waste recovery, depends on the international market price for recovered waste because 98 per cent of it is exported, mainly to mainland China. With the price of used paper falling by 20 per cent this year, and plastic and scrap metal by 50 per cent, no recycling fund will increase the amount of waste recovered.

The bureau’s efforts to recover and recycle waste are inconsequential, other than giving the impression of activity by its overpaid bureaucrats. With the unabated increase in waste generated and no increase in waste recovery, taxpayers’ money may as well be saved for the inevitable construction of a second incinerator.

Tom Yam, Mui Wo

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ZERO WASTE TO LANDFILL, LANDFILL BANS: false paths to a Circular Economy

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‘Incineradoras No, Zero Waste Madrid’ in action!

Incineradoras No, Zero Waste Madrid is successfully paving the way for Zero Waste Municipalities in the area of Madrid, in Spain.

Since this summer, thanks to the progressive political turn in many municipalities in the area, the network has been able to ally with alternative political parties and pass a motion in at least 4 municipalities calling for zero waste. Moreover, the network has been able to create and develop working groups for the implementation of Zero Waste in various municipalities, as an alternative to the waste management model of municipal waste.
Pile of bottles collected for recycling plant, Netherlands

The four municipalities that have already approved the motion are Loeches, Mejorada del Campo, Torres de la Alameda and Velilla de San Antonio. All of them are small municipalities no more than 44km2 and with no more than 23,000 inhabitants. However, they have a lot of environmental problems such as plants for the treatment of sludge from toxic materials, wastewater treatment, the deposit of industrial and dangerous waste, illegal landfills, incinerators and cement kilns burning waste.

The approval of the motion brings positive news and hope to the current waste management situation in Madrid. It is a presents a step in the right direction on the way to a Zero Waste reality.

The motion in detail

The motion recognises the urgent need to stop relying on false solutions, such as landfills and incinerators. This model effects the environment and the health of the people of neighbouring and nearby municipalities. We therefore need a paradigm shift, and in the motion we ask for:

The creation of a working committee to implement a zero waste model with the participation of local political and civil society groups.

The council to be formally required to create a ‘regional waste strategy 2016-2026′ for the City of Madrid. This would replace the current and outdated strategy and set the objective of ‘Zero Waste’ waste management in our region..

An awareness raising campaign should be carried out with citizens participation, where people are informed about the current waste management practice, its impacts, the alternatives, and benefits involved such alternatives.
The municipal waste collection should be evaluated and be run by the municipality and not by external companies. This would include:

A study of current and future costs of waste management if it were to be run by the municipality should be conducted. This study should assess its viability and implementation.

A review of current waste management contracts and whether they can be modified, to allow a gradual implementation of a zero waste selective collection project.

Control and monitoring of the current waste collection to ensure that contracts are enforced, so we would able to confirm that they are not mixing municipal waste and other types of waste (packaging) etc. in its collection.

‘Incineradoras No, Zero Waste Madrid’

This Zero Waste Europe member is a network of neighborhood associations, environmental groups, Popular assemblies of 15M, collectives of organic gardens, organisations formed to fight facilities and harmful waste plans, “No Macro-Landfill, Yes Zero Waste” campaign, representatives of political groups and individual zero waste campaigners. Their common goal is the fight against the creation of hazardous waste, against harmful waste facilities and planned facilities primarily located in the Eastern region of Madrid.

Over the years this network has been a focal point of resistance to environmental damage in the area. It works to submit refutations to waste projects, environmental damage reports, conducting lobbying and organising trainings, rallies and demonstrations aiming to show the popular opposition against these projects.

While challenging these facilities, the network has developed, and now promotes an alternative Zero Waste policy to the current waste treatment plans. This should be implemented in all municipalities of the City of Madrid. In this way, Zero Waste Madrid also wants to reach the institutions through the current ‘popular unity’ candidates who are much more open to this project through motions in the municipalities where they are in office.

In conclusion, thanks for the wonderful work of ‘Incineradoras No, Zero Waste Madrid’, zero waste is really happening in Madrid!

Director of Audit’s letter to the President of the Legislative Council

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Let’s throw away old notions of waste: it’s time for new circular economy policies

The circular economy is about much more than recycling and landfill. As Accenture’s Peter Lacy argues, businesses and consumers need governments to reward innovation through effective incentives.

Waste is at the heart of the way the world does business. We take, we make and we discard waste.

As countries run up against scarce resources and pollution, many governments have acted swiftly to reduce waste. But policymakers’ view of waste is often out of date and this risks missing the massive economic opportunity that waste now presents. The emergence of the circular economy calls for a total redefinition of waste and promises $4.5trn in unlocked growth.

The traditional approach to managing waste has come down to recycling and managing landfill. Other curbs have improved the efficient use of natural resources. But what about the wasted capacity in the cars that stand idle for 90% of the day? Or the wasted lifecycles as products are discarded after their first use? And what about the wasted embedded value that could be eliminated by repurposing materials? Or the wasted resources that could be reduced through renewable energy and materials?

Driving forces

This four-dimensional appreciation of waste forms the foundation of the circular economy that not only mitigates environmental damage but significantly reduces business costs and generates new revenue streams. Governments will be crucial to its success.

Let’s be clear that policy won’t be the only force driving the circular economy. Price already is transforming investments. For 40 years until the turn of the millennium, commodity prices decreased as growth surged. But this pattern then reversed dramatically as the rise of urban populations and middle class consumption led to intense shortages of many resources while putting others such as water and fertile soil under great stress. In recent years, prices have skyrocketed and crashed dramatically.

Businesses now feel the pain of unpredictable resource supplies and price volatility. Prices for metals like copper, iron, tin and nickel, have nearly doubled between 2000 and 2015. Despite the recent falls, the real price of oil in August 2015 was 55% higher than in August 2000. Businesses have no choice but to respond to such cost increases.

That’s why former EU Environment Commissioner Janez Potočnik is right to insist that the key to good policymaking on the circular economy is the understanding that “waste is a resource and not a problem.”

To this end, many welcome the European Commission’s treatment of its new circular economy proposals as primarily an economic package – with fantastic environmental side effects. After all, for every percentage point reduction in EU resource use could be worth around €23bn to business and could result in 100,000 to 200,000 new jobs, according to Potočnik.

Supply and demand

In order to address waste across all its four dimensions, the priority for governments is to redesign regulations to encourage new consumer and business behaviours. That includes levelling the playing field between today’s linear models of take-make-waste and circular models. The financial attraction of growing through greater consumption of resources needs to be reduced. Companies must be encouraged to incorporate the cost of environmental impact into product pricing.

There is also a need to shift regulatory efforts from managing waste and landfill to pursuing a zero waste economy in the first place. That can include measures to stimulate demand for more resource efficient products through greater transparency on resource composition (through minimum packaging standards, for example).

But as much effort is required on the supply side. An improvement in the availability of information on waste and materials, reinforced by international standards, would help. Countries could follow the example of the WRAP initiative that helps all stakeholders use resources more efficiently. Extended Product Responsibility (EPR) policies can be used to make producers responsible for what happens to products after they have been consumed. Studies still show that collective responsibly for disposal is not as effective as making each manufacturer responsible for its own branded goods.

Taxation must be adjusted to back up new regulations. At a broad level, the imbalance between labour and resource taxation needs to be addressed. While commodities look set to be scarcer and more expensive, labour is likely to be cheaper and more plentiful. So a shift in the burden of taxation from labour to resource consumption could have the dual-benefit of creating jobs and encouraging efficiency. The International Labour Organization thinks that if a global tax on CO2 emissions were imposed (and the revenues used to cut taxes on labor) around 14 million jobs could be created.

Behaviour change

Taxation and policy should be consciously designed to support the emerging business models that will underpin the circular economy. For example, sharing platforms that make use of underutilized property, vehicles and other assets. 60% of truck capacity in the EU runs empty. Regulation could encourage commercial opportunities to turn that waste into revenue. Product-as-a-service models likewise encourage providers of products to maintain them for longer. The recovery of waste is a nascent market today and requires incentives that help companies transform the behaviours of supply chains to ensure the quality of repurposed waste is sufficient for re-use.

Government can also transform supply chains through more stringent demands in public procurement which represents a large proportion of consumption in many countries.

As the ‘take, make, waste’ economy runs up against scarce raw materials, market prices will encourage businesses and consumers to change their behaviours. Technology will also unleash new circular models. By seeing waste as an opportunity for competitiveness and growth, Governments will be better placed to implement wide reaching policies that will give their economies an even greater circular advantage.

Peter Lacy is managing director of Accenture Sustainability Services and co-author of Waste to Wealth: the Circular Economy Advantage.