Should there be an “industrial strategy”? And if so, should there be a policy line for waste and resources within that? Eunomia’s Dominic Hogg – also an ambassador for RWM in Partnership With CIWM – takes up the discussion…
The Departmental reshuffle announced by the new Prime Minister gives enhanced significance to industrial strategy. The new Department for Business, Energy and Industrial Strategy has the opportunity to build upon the work that started during the coalition government, but also to adapt the form it takes.
The idea that there is a need for an industrial strategy still, fills some with a degree of trepidation. That view will stem, in part, from the view that governments have a tendency to meddle where they shouldn’t, and that such a strategy smacks of an attempt to “pick winners” from an array of competing industries. Others take a different view, and indicate that, especially in high-tech industries, the collaborative development of industry by the private and public sectors is good for the economy.
The coalition’s strategy was based on seeking to set the framework for industrial development through addressing some cross-cutting issues, and it also highlighted a range of technologies where it was felt the UK had – as a result of its world-class research base – the opportunity to develop its industrial base in response to anticipated growth in global demand for products and services related to these technologies.
Over the decade preceding the financial crisis, and as Defra has already highlighted in a document, gross value added from the waste sector grew faster than the average rate for the whole economy. It has been slower to recover to pre-crisis levels than the rest of the economy, and there are good reasons for this: the growth prior to the financial crisis was in no small part due to the sector’s response to a range of policy initiatives, as well as a growing realisation that better management of waste, as a resource, would deliver a range of benefits; among them were increases in employment and mitigation of greenhouse gas emissions. Commodity prices also rose over the period, bolstering the economic rationale for recycling at one end, whilst a rising landfill tax propelled it from the other.
In the post-financial crisis period, at least in England, policy developments have been notable by their absence, and not far into this decade commodity prices, having first recovered from what looked like a “blip” during the financial crisis (China’s economy was showing – publicly, at least – few signs of weakness), started to weaken as the Chinese engine began to stutter.
Waste & Resources’ Role In Industrial Strategy
It’s not so difficult to make the case for the inclusion of the “waste and resources sector” within an industrial strategy in its own right. The last 15 years have witnessed a sea change in how waste is managed across the UK, and we have become a major exporter of secondary materials, with very little secondary materials moving in the other direction. The same can be said of residual waste treatment systems, where the growth of the export market has been a feature of the current decade. It’s quite clear that more can be achieved in respect of materials recovery and this can be done in an efficient manner: but if we extract more materials for recycling, what are the prospects for shoring up demand from within the UK?
If we broaden our horizon and consider the role that the waste and resources sector can play in industrial strategy, then the case seems much more compelling. If industries are seeking to reduce their environmental impact, then one way in which they can do so is to make use of secondary materials in production. This requires the supply of secondary materials to take place in such a way that industry finds them easy to use: the case for close collaboration between the resources and waste sector and other industrial sectors is a strong one. And even though some of the arguments around supply risks of materials may have been overblown, it stands to reason that sourcing materials from what is discarded in the UK could provide a stable source of materials for industry
More than that, if we develop expertise in some specific recycling processes, than why should we not reverse the flow of secondary materials from the UK, and develop a waste and resources industry in tandem with the development of other industries making use of materials that can be derived from waste?
This is likely to require renewed action in the “waste and resource” policy space, but if this takes place in conjunction with the roll-out of an environmentally informed industrial strategy, then there is an economic opportunity to be seized.
Eunomia authored the ‘A Resourceful Future – Expanding the UK Economy’ report for Suez, launched earlier this week. Read the full story on that report, launched at RWM In Partnership with CIWM, here.