New calls for government to improve resource efficiency

EEF and Friends of the Earth are calling for a new Office for Resource Management in government to co-ordinate the UK's resource strategy (via @James_BG).

I have no idea what such an office would be expected to do. Commodity prices are set by global markets. Businesses have an in-built commercial imperative to respond to these prices. The EEF's own survey recently told us that 75% of UK manufacturing businesses have already implemented resource efficiency measures or are in the process of doing so. Why do we need a new Government department to tell these businesses what they need to do?

Their submission includes the increasingly common reference to a decade of price rises wiping out a century of declines. But as I have previously argued here, the relative prices of commodities are in fact still low in historic terms. I can buy a (two and half times) bigger basket of commodities with my labour now than I would have been able to 30 years ago.

The timing of this call to arms is also strange to me. The EEF is quoted as saying 'prices are on an upward trend'. This is not in fact based in reality where prices are down in the past year.

Of course there is yet another call to ban recyclable material being sent to landfill. In my mind, the landfill tax escalator is already driving recyclable material out of landfill. If there really is going to be a resource crunch and prices really are going to rise then there will be no need for a ban as simple economics will lead to this material being recycled.

China's demand for higher quality

There seems to be more in the media recently about China's increasing demand for higher quality recyclate and how the UK will have to respond by improving the quality of material it collects/processes.

For me this is a classic example of the market determining its own specification. This obviates any need for government intervention in the form of 'quality standards'. As I have argued before here, the implementation of arbitrary standards in any part of the UK would be liable to drive up costs to waste producers and leave the country as a whole worse off.

There is no need for heavy handed intervention at home as the market will drive up standards by itself. This still won't address the real problem for UK-based reprocessors, namely that their cost base is higher than that of their overseas competitors.

Green Alliance argues for landfill bans

The Green Alliance is leading a push for banning the disposal of waste wood to landfill.

As I've previously argued here, I think that the costs of a potential ban would outweigh the benefits and that it should therefore be resisted.

Green Alliance points to a research study it conducted on behalf of Defra which GA believes demonstrates that landfill bans are effective in practice. I personally don't see how their case studies are relevant in this case.

Their research looked at general bans on unsorted waste being sent to landfill, as well as bans on separately collected recyclables being sent to landfill. European Directives mean that both of these are in fact already in place here in the UK. The other case they look at is on various forms of restrictions on sending residual waste to landfill, e.g. for combustible waste which might instead be sent for energy recovery.

This is not the same as a ban/restriction imposed on a specific material stream, which I think is likely to be much more costly to enforce. As before, the landfill tax is doing the heavy lifting in terms of driving material out of landfill. Let it do its work.

ACP advises local authorities on procurement

Via @APSRG I see that the Advisory Committee on Packaging (ACP) has published its latest annual report.

While most of this is fairly technical stuff on how to link collections with supply chains and maximise recovery of packaging (particularly of plastics), one of the key recommendations (recommendation 2) advises local authorities to be given a statutory role as a supplier of materials to markets and also for them to participate in the contract framework for collection services developed by iESE.

I can't help thinking that by making this recommendation, the ACP is stepping outside of its remit.

On the first point, there is already a financial/business imperative for recycling to be completed in the most efficient manner so as to maximise revenues from recyclate sales and minimise landfill costs of rejected material.

On the second point, there has been a certain deal of controversy relating to the proposed iESE framework (see e.g. here or here), with some private contractors arguing that the framework will not deliver the promised cost savings, but will instead constrain innovation and end up being more expensive for participating authorities.

I personally can't see that the ACP has any role in advising local authorities on the most appropriate procurement methods for their collection services.

Guardian gets it wrong on scarcity again

There is the usual nonsense in the Guardian again moaning about resource scarcity without any reference to actual facts.

Known reserves of resources are at all time highs, as is commodity production (see e.g. here and here). Stuff is abundant. And we are using it ever more efficiently. As I've noted before, the total material requirement for the UK economy is actually in decline. 

Environmentalists often worry that we will eventually run up against scarcity constraints as they think that the global economy may be able to deliver relative decoupling of resource use from economic growth, but not absolute decoupling.

I disagree with them. We are already seeing absolute decoupling in the UK (as well as some other rich economies I believe). For the world as a whole, growth in resource use seems to be fairly closely linked to population growth (source for graph). The world population is expected to stabilise around the middle of the century, at which time I suspect we'll see stabilisation in resource extraction. 

I could of course be wrong but I believe that there is also likely to be an environmental kuznets curve effect, which will mean that a richer global economy will enter a phase of falling material requirements - and absolute decoupling - as we have already witnessed in the UK.

Ecosystem payments for ex-landfills?

Monbiot today rages in the Guardian about the commodification of nature as represented by the Government's approach to payments for ecosystem services, put forward in the Natural Environment White Paper.

I support the principles behind the Government's approach to valuing nature/natural capital. For something to possess value it must be valued in some way by a valuer. A market-based approach to determining prices/values is the best approach we have and should be commended.

For the waste industry, I wonder whether there is a potential opportunity to tap into the market for natural capital offsets/payments for ecosystem services through landfill restoration.

A quick search for the term landfill over the White Paper suggests this is not an option which has been considered by the Government. I assume that permit requirements to restore landfills mean that any contribution towards natural capital will be deemed to be part of a business as usual scenario and not therefore eligible for an additional revenue stream for ecosystem payments. But maybe it is something which could be considered in the future?

London debates the environmental imperative

Matt Ridley, the rational optimist, was the keynote speaker at yesterday's London debate on the environmental imperative. It was generally an interesting discussion, and in contrast to the vast majority of policy 'debates' actually contained some divergent views. I have become thoroughly bored with the type of occasion where six panellists all stand up one after the other and agree on absolutely every point.

There was of course disagreement from many in the audience about Ridley's sunny prognosis for the state of the planet and several people accused him of cherry picking his statistics, but I don't recall anyone actually being able to catch him out on a specific point.

I was surprised however by the general level of agreement with some of Ridley's views. In particular, there seemed to be recognition that innovation and new technology will likely be required to offset growing environmental pressures, and that economic growth will be required to generate the capital to fund these new technologies.

When it came to resources, Ridley made the point I would agree with that scarcity is not an issue. I was then disappointed that Ben Goldsmith, billed as an expert in green finance, chose to raise the issue of recent resource price rises and how these have wiped out a century of declines (previously argued by McKinsey in the circular economy report for the Dame Ellen MacArthur Foundation). I of course think that the real issue is the relative price of resources which are still at historically low levels. Commodity markets are in any case cyclical and prices will likely come down again.

Stuff is cheap and will continue to be cheap for a long wile yet.