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The Circular Economy

Whatever your feelings about the European Union, it’s undeniable that the bloc is good at setting ambitious targets. Many of these are definitely good ideas, but meeting the goals is generally less successful. In this sense, the Commission appears to act as a high-level think tank, putting out proposals, targets and road maps to catalyse change. The member states, meanwhile, at least pay lip service to the goals, while in practice often not being fully committed to achieving them.

Nevertheless, it is arguable that, if such proposals were not made, progress would be slower still. The problem is that the Commission’s plans have to be radical enough to make a real contribution to future strategy, while being sufficiently practical and grounded that a reasonable amount is actually achieved. If not, member states, key policymakers and the international community will lose all faith in future packages.

Most EU member states, like other developed countries, have become less and less competitive as manufacturers, with both heavy industries such as steel-making and ship-building and assembly work in the electronics industries moving to lower cost countries, mainly in Asia. Even there, we are seeing a transition from Japan and Korea to Vietnam, Malaysia and Thailand. Even China will not be immune to this transition as the economy grows and wage rates rise.

This is not a new phenomenon, of course. Many British towns were made rich by the wool trade, and the Industrial Revolution increased the global dominance. Nowadays, Asian countries produce both the cloth and make the clothes we wear, while the fabric mills of northern England stand as museums. So it goes. In future decades, increasingly prosperous Asian countries will lose such jobs to newly-industrialising African competitors. Nothing lasts forever.

In a changing world, the EU cannot be complacent about maintaining the prosperity and living standards of its citizens, but must look for comparative advantage. The US is once more an important oil and gas producer, and its low energy prices are allowing at least a temporary resurgence in energy-intensive manufacturing sectors. But the EU is dependent on imported energy and, even if not, is philosophically heading in a different, greener direction.

The UK is already an economy dominated by the service sector, and many other EU member states are on the same track (Germany, with its highly productive, export-driven manufacturing sector, is an outlier). Financial services is a very lucrative and specialised sector, but many other current service jobs are relatively low-skilled and low-paid. This is one reason why the EU has bet in particular on its strengths in basic science, particularly biological science, as a creator of comparative advantage and driver of economic growth.

From the early years of this century, the concept of the so-called Knowledge-Based Bioeconomy (KBBE) evolved. The idea was that the academic sector, working with industry, would provide the tools to enable not just improved and sustainable food production, but a transformation of existing chemistry-based manufacturing processes to biological processes using renewable raw materials (biomass) in place of fossil fuel feedstocks.

A flurry of activity created seven Technology Platforms and a raft of centrally-funded collaborative R&D projects. But few people outside the research or policymaking communities have heard anything about the KBBE. It’s not dead, but seems to have evolved into a global cooperative programme rather than being a driver of regional economic growth. Earlier this year, the second Global Bioeconomy Summit was held in Berlin but it there has been any positive influence on the European economy, it has been kept very quiet indeed.

In the meantime, the focus has also shifted towards what is termed the Circular Economy, not necessarily all bio-based, but concentrating in particular on avoiding waste. The key concepts are to reduce manufacturing waste and to recycle products at the end of their life. Everything is to be reused.

This of course is a laudable aim. But the Commission also has wider ambitions. On its website talking about this year’s package to implement the Circular Economy Action Plan, we read that “The European Commission adopted an ambitious Circular Economy Package, which includes measures that will help stimulate Europe's transition towards a circular economy, boost global competitiveness, foster sustainable economic growth and generate new jobs.”

The Circular Economy seems to have replaced the Bioeconomy as the driver of prosperity, but are we really any further forward than when, in the early noughties, the earlier concept was born? There have been some high-profile initiatives to reduce waste – even British shoppers no longer get free plastic bags and may soon have to pay a deposit on bottles – but this is really tinkering round the edges. There remain real problems with making effective use of even well-sorted plastic waste. And even the now mandatory recycling of electronic goods captures only the high value materials.

This shouldn’t stop us trying to make better use of raw materials and working on new materials with the benefits of current plastics but which break down much faster in the environment. But it seems that our European antipathy to waste and environmental degradation has the unfortunate flipside of making us much less positive about science and technology in general, and it’s science that makes changes possible.

The biological sciences undoubtedly could make a big contribution towards the future economy, be it circular or otherwise, but the distrust of what has come to be seen as ‘tinkering with nature’ (genetic engineering in particular) at the moment makes it hard to fulfil the promise. Until we get over this collective hang up, ambitious plans to remake the economy are probably pie in the sky.