Climate change and competition need not be in contradiction

Climate change and competition need not be in contradiction – not in the circular economy, at any rate. Modern disposal infrastructure that’s built on the ‘polluter pays’ principle would create environmental as well as economic benefits – all in keeping with the spirit of the Green Economy.

But an essential prerequisite is the willingness to take the political decisions and provide the right legal framework. Clearly formulated state-of-the-art requirements, supported by state-level monitoring and enforcement of standards will set a framework for environmental development by economic operators.

The economy must supply the services, but the rest is up to the community and the state. Political decisions of the sort needed can only stem from citizens’ and companies’ own awareness of being waste generators. They have to accept that they must pay the costs of disposal of their own waste. They can, though, reduce these costs by keeping different types of waste separate so as to enable high-quality recycling.

Citizens can have a significant impact on society’s progress towards a circular economy through their behavior, and it is this that requires willingness and responsibility. We need citizens to understand how their own actions can contribute to protecting the environment, and we need to persuade them to rely on products that consume fewer resources and so can be recycled more easily. The high levels of education in Europe can do much to help, and in Germany 90% of people questioned say that they try to make a significant contribution to environmental protection by sorting waste.

Companies can generally make huge savings in their material throughput, their energy balance and their waste generation by converting or streamlining their processes. The financial incentives to do so are, unfortunately, often too small, so disposal costs along with more information and guidance could give greater impetus. Investment is also needed on the disposal side to meet legal requirements. The cost could be amortised through guaranteed prices and fees paid by waste producers.

It would be a mistake to believe in a “zero-waste world”. As long as there is human life on earth, there will always be a considerable amount of waste to be treated. Any policy arguing that modern waste disposal infrastructure could be replaced by waste prevention is counterproductive: only sophisticated and expensive technology can create the initiatives needed to reduce waste. Without waste separation, recycling and incineration, we will be left with landfills and harmful air emissions, as well as the loss of raw materials and energy that this involves. Yet this is still the policy in the vast majority of EU member states, where most waste is untreated in landfills despite the European Union’s rules.

In Germany and some other EU countries, very high recycling and recovery rates have been achieved by means of the circular economy. Thanks to measures first introduced in the 1980s, 63% of Germany’s municipal waste is now being recycled, with most of the residues used to generate energy. The overall recycling rate is 71% and the recovery rate (including waste-to-energy) is 77%. 14% of all raw materials needed in the German economy are already generated from waste. Waste intensity, the ratio between GDP and waste generation, recently fell to 75%, and 20% of our climate protection targets under the Kyoto Protocol were achieved by the waste management industry alone. About 3,000 companies, using 15,000 disposal facilities that employ over 200,000 people, together enjoy a combined annual turnover of more than €30bn.

But as I’ve already said, a prerequisite for the ecologically and economically profitable development of a “Green Circular Economy” is an awareness that we have reached the limits of the resources capacity of our earth. We have to combine this with the knowledge that we can use market mechanisms to overcome part of our global challenges. “True” prices for raw materials and energy that reflect not only today’s scarcities of production factors but tomorrow’s too, and pass these prices on as a cost to polluters, will be key to solving our resource problems. We may for the time being be far away from seeing these prices in the global marketplace, but both nationally in Germany and in the EU we should be setting ourselves this goal.

All this must be connected with education, support and legal barriers. The EU and its institutions already have a special role in this regard because present requirements must be enforced. A unified, modern and sustainable Europe needs high standards and a level playing field – and that means a common policy. Positive examples exist in a number of European countries, and these must set the pace for joint, EU-wide action. Only then will the circular economy be able to make its full contribution to resolving both our environmental and economic challenges.