The UK could boost its gross domestic product (GDP) by £2.9bn a year if it “fully embraced the circular economy”, a study has found.
Embracing the so-called circular economy, where resources and materials are reused as much as possible and services are sold rather than products, could also create 175,000 jobs, with the biggest growth area in plastics recycling, the report suggests.
Independent research from Imperial College London (ICL), commissioned by waste company Veolia, has found that using entirely recycled resources and moving to a service- rather than product-based economy could increase GDP by 0.18 per cent annually.
It shows in the next decade, £23.7bn of value could be derived through reprocessing and recycling waste materials from households, businesses and industry, with a further £3.1bn opportunity created through service-based business models, such as those that rent or share goods.
The report calculates businesses would save £2.3bn in taxes currently paid on waste sent to landfill, while incinerating materials that cannot be reprocessed would generate £1.1bn worth of power.
It noted that while the waste management sector has grown economically, due to an increasing value of resources, the scale has fallen in terms of tonnages.
Estelle Brachlianoff, Veolia senior executive vice-president UK and Ireland, said: “Businesses need to wake up to the unsustainable nature of our throwaway economy and put more value on resources.
“This report highlights how a transition to a circular economy has the potential to add 1.8 per cent to our GDP over a 10-year period. The findings have exceeded our expectations – even if we achieved only a 50 per cent shift this would add £15bn to the country’s economic output.”
Leading author of the research Dr Nick Voulvoulis, from the centre for environmental policy at ICL, said: “The report goes beyond resource and energy efficiency; it also includes closing the loop between resource extraction, production and disposal, moving towards the provisions of services, where materials are valued differently; creating a more robust economy in the process.”
A number of major companies including Marks & Spencer, IKEA and Unilever have already implemented closed loop systems in recognition of dwindling resources and spiralling commodity prices.