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Circular economy could create 500,000 UK jobs

Britain could create up to 517,000 jobs by achieving 'transformational' circular economy ambitions, a new study by WRAP and Green Alliance has found.

Circular economy could create 500,000 UK jobs

The ‘Employment and the circular economy: job creation in a more resource efficient Britain’ report, commissioned by the Waste & Resources Action Programme (WRAP), reveals that even if no new initiatives are taken to boost the circular economy (i.e. improving resource efficient activity such as recycling, reuse and remanufacturing), the circular economy will still ease labour problems by creating jobs in Britain.

Following discussion with ‘a group of experts’, including the manufacturers’ organisation EEF, the Department of Business, Innovation & Skills (BIS), waste management company SITA UK, and trade association the Resource Association, the Green Alliance found that a minimum of 31,000 jobs would be created in relation to the circular economy by 2030, even if no further work to boost it was taken.

This conclusion was reached by looking at three different scenarios:

Scenario one

The first scenario involves implementing no new initiatives and a very limited increase in the ‘circularity’ of the economy by 2030. This scenario involves Britain having a 55 per cent recycling rate, a one per cent remanufacturing rate, and ‘slight growth’ in reuse by 2030.

According to the report, this scenario would create 31,000 jobs (largely ‘low-skilled in waste management and higher-skilled jobs in biorefining’) and could reduce unemployment by about 10,000.

Scenario two

The second envisages a continuation on the current trajectory, with recycling increasing to 70 per cent, remanufacturing increasing to 20 per cent and ‘slight growth’ in reuse.

This scenario would create a minimum of 205,000 jobs (including ‘lower-skilled waste collection, skilled remanufacturing and highly-skilled biorefining jobs’) and could reduce unemployment by about 54,000.

Scenario three

The third scenario of ‘transformational progress’ would involve substantial progress in recycling and remanufacturing (rising to 85 per cent and 50 per cent, respectively) and also ‘significant growth’ in the development of the reuse, ‘servitisation’ and biorefining sectors.  

This ambitious scenario could create 517,000 jobs (including ‘lower-skilled waste collection, skilled remanufacturing and highly-skilled biorefining jobs’) and could reduce unemployment by about 102,000 whilst potentially offsetting around 18 per cent of the expected loss in skilled employment over the next decade.

The report acknowledges, however, that ‘although there is potential to create jobs for unemployed skilled workers, the significant growth anticipated under scenario three would require nearly all the skilled workers who are currently unemployed to be employed in circular economy activities’. As it is unlikely all these workers would be suitable for the new jobs, it may be the case that lower-skilled workers would need to be trained, or that some skilled workers employed elsewhere would need to be displaced.

Job dispersion

The report also looks at how jobs will be dispersed across Britain, and found that regions where unemployment is higher, such as the North East and West Midlands, could see the greatest impact in job creation, especially among low- to mid-skilled occupations where job losses are projected for the future.

Reuse and ‘open-loop’ recycling are expected to remain the least geographically concentrated, followed by closed-loop recycling, servitisation and biorefining, which will require activity across the country. By contrast, remanufacturing is likely to be somewhat more concentrated, remaining close to existing manufacturing facilities.

While Green Alliance warns that most activities may lead to ‘some displacement of activity in other areas, such as a move away from the production of virgin materials or original manufacturing’, given existing patterns of trade, most of these impacts would be more likely felt by overseas suppliers.

A circular economy is an alternative to a traditional linear economy (make, use, dispose) and involves keeping resources in use for as long as possible, extracting the maximum value from them whilst in use, then recovering and reusing products and materials.

UK will have to become an active champion of higher ambition’

Speaking at the launch of the report, yesterday evening (20 January), Matthew Spencer, Director of the Green Alliance said: “At a time when many are worried about where jobs will come from in future, it is a tantalising prospect to have a sector which offers a wide range of new jobs right across the country, especially in regions with high unemployment. To be able to stimulate these new jobs in remanufacturing and reuse we will need government to play its part in setting higher standards for product and resource recovery.

“The biggest opportunity to do that is in the EU circular economy package which is being renegotiated this year, but the UK will have to become an active champion of higher ambition or we could end up with no new policy drivers for investment.”

Liz Goodwin, CEO of WRAP added: “We’ve long been talking about the benefits of the resource efficiency agenda, working with businesses and turning ideas into action. But this report is the first of its kind that pinpoints exactly who, what and where could benefit from the implementation of the circular economy. This signals a major new opportunity for Britain’s economy, and could deliver jobs where they’re needed the most.”

The report has been welcomed by several circular economy commentators, including Walter R Stahel, originator of the circular economy concept, who stated: “A circular economy will directly create numerous jobs with a broad diversity of skills at local and regional level, and give rise to new SMEs [small- to medium-sized enterprises] exploiting opportunities in the local loops.

“In addition, a circular economy will create skilled jobs to develop the innovative processes and technologies needed ‘to most profitably close the loops’, innovations which can be sold abroad.” 

University College London’s Professor of Economics Stephen Machin added that “creating jobs with decent pay as innovative technologies evolve is a challenge given the UK's traditional difficulties in generating good jobs for workers with low and intermediate skills”, but the report “emphasises the need for this kind of job creation especially given the decline in jobs in the middle tier of the labour market”.

Read the full ‘Employment and the circular economy: job creation in a more resource efficient Britain’ report.

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