Circular economy would boost GDP
Study finds that closing the loop could help add £29bn (1.8%) to UK economy
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Published: 24 June 2015
This Article was Written by: Katie Hill - My Green Pod
Independent research released from Imperial College London, commissioned by Veolia, has found that the UK could reap significant economic benefits if it fully embraced the circular economy.
The research found that a combination of ‘closing the loop’ on resource use and moving to a service rather than product-based economy has the potential to add 0.18% – equivalent to £2.9bn per annum – to UK Gross Domestic Product (GDP) per year, circa £29bn over 10 years.
- £23.7bn could be derived from reprocessing and recycling materials from households and commercial and industrial sources
- Moving from a product to a service-based approach is a £3.1bn opportunity
- Businesses would save £2.3bn in taxes currently paid on waste sent to landfill
- £1.1bn in energy could be generated from materials that can’t be reprocessed into further products
- £888m of value could be captured from unwanted chemicals
- The report takes into account the existing £2.2bn contribution of the waste management sector to the circular economy
The report, The circular revolution, also estimates that 175,000 jobs will be created by the circular economy, amounting to almost 10% of UK unemployment with particular opportunities for growth from plastics recycling.
‘The world is facing an enormous challenge. Expanding populations and a rise in living standards means demand for raw materials is growing, at the same time resources are rapidly depleting. Businesses need to wake up to the unsustainable nature of our throw-away economy and put more value on resources.
‘This report examines the economic benefit of this, highlighting how a transition to a circular economy has the potential to add 1.8% to our GDP over a 10 year period. The findings of the report have exceeded our expectations – even if we only achieved a 50% shift this would add £15bn to the country’s economic output.’
Estelle Brachlianoff, Veolia’s Senior Executive Vice-President UK & Ireland
The World Economic Forum has forecast that the circular economy will contribute $1 trillion per annum globally by 2025. Until now, there had been no specific analysis of the potential gains to be made in the UK.
Click here to read the full report.