Examination of Witnesses (Questions 545-559)
Ms Julie Hill, Miss Hannah Hislop, Mr Andrew Lee
and Ms Sue Dibb
11 MARCH 2008
Q545 Chairman: Good morning. Perhaps,
Ms Hill, you could introduce yourself and then the others can
introduce themselves along the line, so we know who you are and
where you are from.
Ms Hill: I am Julie Hill. I work for Green Alliance,
which is an NGO, a pressure group or think tank. I was a director
of Green Alliance for five years. I now work part-time for the
Green Alliance as an associate, which means I act as expert lead
on certain programmes, and I lead the waste and resources theme
for Green Alliance. I have had probably 10 to 15 years experience
of waste policy and for the last three years I have led a project
called Closing the Loop.
Miss Hislop: I am Hannah Hislop. I am a policy
officer at Green Alliance. I work with Julie on Closing the Loop
work. I project manage the work and I have been at Green Alliance
for the last two and a half years.
Mr Lee: I am Andrew Lee. I am the Director of
the Sustainable Development Commission, which is the Government's
official adviser on sustainability. I head up the secretariat
on the organisation—working for its little-known Chairman
Jonathon Porritt!
Ms Dibb: I am Sue Dibb. I am the Team Leader
for the SDC on its programme for sustainable consumption and business.
Q546 Chairman: You have made great
play of the cradle-to-cradle approach, and it is an appealing
strategy. The Green Alliance have suggested that we should emulate
biological systems and create no waste at all. If you believe
that a completely zero waste society is possible, how can this
be achieved? How quickly could this be done and what might be
the possible difficulties in getting there?
Ms Hill: There is a whole additional book in
those questions, I fear. In brief, a goal of absolutely zero waste
is probably physically and politically unattainable, but through
drawing attention to this idea of cradle-to-cradle we are trying
to promote a much more ecologically compatible way of dealing
with resources and waste than the one we have at the moment, which
is basically very linear: the extract, produce, consume, discard
model. We feel that a large part of the route of getting there
is wanting to organise society in that way. When we read Cradle
to cradle we find a very beguiling, positive, creative, achievable
sounding, business-backed recipe for a rather more interesting
future, not a hair shirt, give-it-all-up, suffer under the burden
of ever more incremental efficiencies kind of agenda. That appeals
very much to us and we believe it would appeal to people at large.
We are trying to make it appeal to politicians. Unless it does
appeal as the vision for the future, I would imagine the transition
that we need to make to get to that is not going to be within
our grasp. It has to be something, as a way of organising society,
which is bought into by business and politicians alike, and obviously
a part of that is a degree of buy-in from the general public.
I think we have good reason to be positive about public potential
sympathy and enthusiasm for that kind of way of organising ourselves.
Just looking at the Daily Mail's "ban the carrier
bags" campaign would suggest that in popular culture there
is an intuitive sense that disposability and the unnecessary waste
that our linear society generates is not a desirable way to continue
and we should do something about it. For the Daily Mail
to take up a cause means it must have a populist route and therefore
it is politically achievable at some level. We can go into carrier
bags later, and of course it is the tip of a very large iceberg,
but it says something about popular sentiment. I think the cradle-to-cradle
strategy is achievable with, first and foremost, political will.
If one had that political will and had business buy-in, I do not
think human ingenuity or business ingenuity is any kind of constraint.
Once businesses set their mind to do something and feel they have
the right economic framework—which of course is the overall
setting—they can achieve things very quickly. To use perhaps
a rather clichéd example, if we can announce an intention
to send people to the moon and achieve it within a decade then
human ingenuity and technology are not limitations on this at
all. We cannot put a timeframe on cradle-to-cradle or zero waste
because we have not wanted it badly enough to try hard enough
to know what is entailed. As I say, my view is the limitations
are political and about our willingness to adapt the marketplace
to these concepts; they are not technological or about our innate
creativity.
Q547 Chairman: You have quoted the
Daily Mail and their plastic bags campaign, yet, if the
Chancellor on Wednesday was to introduce penal taxation, the first
people to squeal would be the Daily Mail and their readers.
How do you see the range of fiscal, regulatory or even voluntary
approaches which could be taken? Is it just the exhortation or
is there to be a rather more specific approach to it? What kind
of shots would you have in your locker as far as, let us say,
fiscal or regulatory measures were concerned? To which would you
say, "No more"—apart from plastic bags, which
we have already covered?
Ms Hill: There probably needs to be a mix in
the basket. I am going to ask my colleague Hannah to talk about
some of those we have worked on as a starting point.
Miss Hislop: In terms of regulation, the principles
we would want to see, as Julie described, are setting business
long-term targets, dynamic standards that ratchet up over time,
and giving business certainty about what is expected from them.
In terms of particular legislation, one of the things that comes
to the fore first of all is product standards. There are various
ways in which we could organise these and there is some debate
about which ways would work best. You could set particular standards
for particular products on a whole range of criteria from energy,
to resource use, to water use, et cetera, but that does not really
take into account how many products we are using and how many
products are in the system and, therefore, their total impact.
Other ways could be setting sectoral targets for energy and water
and resources, and businesses would trade and distribute those
allowance amongst themselves. For some products, it would be very
difficult to make them into the kind of environmentally sustainable
products we want to see, so those might be phased out, but then
with other products, it might be much easier to make them better,
so they would come to the fore. We have also looked quite a lot
into producer responsibility. I know you will probably ask some
further questions later on, but perhaps I could make the broad
point that we need producer responsibility that gives individual
companies incentives to design products in a better way. The way
the UK transposes EU producer responsibility legislation is very
much in a collective way, so individual companies have very little
incentive to redesign things for recyclability and recovery. It
is very much a way of shifting the costs from the public sector
on to the private sector. We want to see producer responsibility
implemented in a way that affected the companies producing and
designing the goods rather than just the companies dealing with
their disposal. A third matter that the Green Alliance has been
talking about quite a lot recently is the idea of product levies.
We have just released a report which calls for a reform of VAT
and it being replaced with an environmental goods tax. Gordon
Brown has announced his intention is to talk to the EU Commission
with President Sarkozy about reduced VAT for greener products,
such as insulation, and we think the logical extension of that
is looking at the environmental impact of all products and using
a fiscal system to incentivise innovation and therefore better
products. That is another thing we think could be in the mix.
Also there is public procurement as well, but that is probably
something that is better to leave to the SDC to talk about.
Mr Lee: Perhaps I could make some supplementary
points to those that Green Alliance has made. The approach that
we have mentioned in our evidence of product roadmapping gives
you a whole way of looking at the whole life cycle of a product
and deciding when different interventions are the most appropriate
ones to use. We can come back and talk more about that, but the
other thing is the scale of the potential. The important thing
to realise here is that there is a vast potential for improvement.
To take one of the examples we have mentioned, construction waste:
this accounts for one third of the UK waste stream, four times
as much as household waste. We know there is the potential to
reduce by at least 50 per cent the waste of materials in construction
on tangible evidence. In one of our reports we have quoted the
example of WalMart. They looked at 225 of their toy products with
the manufacturer and managed to design out basically nearly 500
container loads of waste packaging and save, effectively, 1,000
barrels of oil, which makes good business sense as well. On food
waste: 6.7 million tonnes a year, which for households in the
UK can be anything from £250 to £400 cost, so there
is huge potential in the system. Can we get to zero waste? You
can argue about that. Can we make huge improvements, order of
magnitude improvements? Yes, we can. A lot of those make good
business sense as well.
Q548 Lord Lewis of Newnham: My impression
would be that you are saying that if you are concerned with zero
waste it is really a cultural problem more than any other, and
you have to change the culture within the system. I think this
is the point you make within your documentation. Perhaps we could
address the point that Mr Lee is talking about. In domestic waste
you are concerned with about nine per cent of the total waste
stream and yet there is a concentration of the public on domestic
waste rather than on commercial waste, and yet commercial waste
is the one that it is relatively easy to do something about. I
am amazed that industry as a whole has not recognised this because
the bottom line is that they are spending money that they need
no longer spend. How can we get this particular point through
because it does seem to me that the concentration of the public
at large on domestic waste is the wrong direction. We should in
fact be concerned with the commercial waste side. In many instances,
that is much easier to deal with: you have a singular type of
waste stream rather than a complex waste stream you get in domestic
ways. Why are we not addressing that problem in a very much more
effective manner?
Ms Hill: When the Government first started looking
at issues of reducing waste, the landfill tax was one of the first
instruments discussed, to encourage diversion from landfill not
just for municipal but also for business waste. It became quite
quickly apparent that the level at which it was originally set
was not influencing behaviour, because still, even with the tax,
landfill was much cheaper than the alternatives. What counts is
both the availability and, of course, the relative price of the
alternatives. It seems to be true, even now, with the landfill
tax escalator and with a large expectation from the Government
embedded in the Waste Strategy that this would be the primary
instrument bearing on commercial waste, that it is still not high
enough to be stimulating consistent investment in alternatives.
It appears to be not just about relative prices but about the
degree of risk that businesses who would be doing that investment
in recycling infrastructure feel they are carrying. We have not
yet sent either the right price or regulatory signals. We have
inherited from the Industrial Revolution a system where the raw
materials have been cheap enough and the end disposal has been
cheap enough to not worry about whether resources are reclaimed
or recycled in the middle. We have only latterly began to worry
about it because we see consequences to disposal—which is
a different set of worries to worrying about resource use and
resource reuse, and possibly ultimately pressure on resources,
and also now, of course, a concern about carbon, where recycling
resources clearly saves carbon. We are starting to worry about
what is upstream, but we have traditionally only worried about
the downstream element, and we still have not made it either expensive
enough or regulated it out to change that system.
Q549 Lord Lewis of Newnham: You are
saying it is a fiscal problem?
Ms Hill: It is a fiscal and regulatory problem.
I spent most of last year on something called the Commission on
Environmental Markets and Economic Performance, which Gordon Brown
called into being and which was jointly chaired by the Secretaries
of State for the Environment and Industry (when DTI still existed),
which comprised some very high level business people and some
very good academics, who spent a year chewing over why there was
not environmental innovation and, indeed, why environmental innovation
was different from any other kind of innovation. The answer is
because environmental goods are generally not priced in the market-place,
so you get little benefit for innovating for the environment in
the absence of specific fiscal or regulatory measures. We still
do not have those enough. That is what the business people said
to government. It is not just what we say to government but the
business community say to government, including the deputy general
of the CBI. You cannot get a clearer voice than that that business
would like more consistent signals to move towards environmental
innovation.
Q550 Lord Howie of Troon: Speaking
as a civil engineer—perhaps I could say that in relation
to what I am going to ask you—you have mentioned a figure
of one third waste in the construction industry, and we have had
a similar figure before us once or twice and I have constantly
queried it, where does it come from?
Mr Lee: Those figures come from the industry.
In fact we were asked by government to produce a report looking
at the UK housing stock—we called it "Stock Take"
and we did it for the then ODPM, obviously now DCLG—to look
at the potential in the construction industry, both on new-build
and also on refurbishment of existing buildings. It comes from
industry figures and also some examples. For instance, the Greenwich
Millennium Village we know achieved a 15 per cent reduction in
material use. Then there are specific products, of course, which
are the focus of more detailed work. We have talked about product
roadmapping and one of those roadmaps—maybe bizarrely, but
very importantly—is about plasterboard, to look at some
of these basic commodities that the building industry is using.
Defra is undertaking that work now to look at what is the maximum
recycled content you could put into some of these products. The
figures are derived from industry, from BRE and people like that.
Q551 Lord Howie of Troon: Do you
think you could let us have them?
Mr Lee: Of course. We could happily share the
whole report of Stock Take. It is 200 pages, but it is all there.
Ms Hill: In countries where they banned the
landfilling of construction and demolition waste, of course most
of it gets recycled because there is not an alternative route.
That is the kind of regulatory signal we are talking about..
Q552 Baroness Sharp of Guildford:
You indicated in your opening remarks that you felt the consumer
side was ready to be led, and you instanced, the Daily Mail
campaign on plastic bags. You also indicated—and I find
this quite interesting—that you felt business is also ready
to be led. Taking the triangular model—which I think comes
from SDC—of the three partners here, business, consumers
and Government, this would indicate that the politicians have
possibly read it wrong and that a better and clearer lead is needed.
The original question I had was whether it was the business sector
that was dragging its feet. One hears the CBI so frequently saying,
"Oh, there's so much regulation. We don't want more regulation.
We don't want more taxes," and all the rest of it, but you
are indicating that business is willing to move and that politicians
are failing therefore to read the signals correctly and that therefore
a much stronger push on the part of politicians in this direction
could lead to considerable changes in behaviour in both the business
and the consumer sector.
Ms Hill: I think that is entirely right. Obviously
you have different kinds of businesses. Smaller businesses will
always be hit harder and there is a leading cohort of progressive
business. But they crave certainty. If they feel there is a political
momentum towards environmental goals, they want to know exactly
what those are. If the subject had never been raised then possibly
"business as usual" is okay, but given that they are
being told that the environment is important they want that translated
into something they can bank against, because, at the end of the
day, everything depends on whether you can get a financier to
take a risk. So a fluctuating carbon price or a price of landfill
that is not going up as high as the Waste Strategy suggested it
would—because the base price is dropping underneath the
tax, which is what has happened—or the inability of local
authorities to commission recycling infrastructure because the
PFI procurement process takes so long and embodies so much risk
that nobody signs for two years, these are the kinds of things
that thwart general objectives and they also do not add up to
a coherent package of saying: "In 20 years, this is where
we want to be".
Ms Dibb: The work we have recently published
Green Healthy and Fair was looking at supermarkets and
a sustainable food system. In the research we did with supermarkets,
they told us that they felt they were not getting clear messages
from Government. They were not getting the longer term vision
and they were not always getting the joined-up approach from different
Government departments. They told us that was a barrier to them.
As we know, many of the food retailers have been taking a leading
position on some of these issues, including waste, making their
own commitments to zero waste to landfill from their own operations,
and we are very clear from the work we have done that there is
an energy there and a desire from business to work much more closely
with Government. We would agree that, on many of these issues,
what seems to be slower in forthcoming is that Government leadership,
in setting that longer-term vision and targets. As Julie has said,
markets will respond to those longer-term targets and certainties,
and that is where we are not getting them. For example the Courtauld
commitment—which I am sure many of you will know is an industry/Government
partnership—has voluntary targets but many of those targets
are already being exceeded. In our view they are really unambitious
and we need to see those as milestones. If we took a road mapping
approach and said, "These are useful targets to be in 2008,
but where do we want to be in 2010, 2015, 2020?" they are
the kind of long-term signals that industry is saying it really
wants Government to give it.
Q553 Lord Crickhowell: With regard
to a zero-waste society, I am prompted to ask you whether non-renewable
resources have to be kept in circulation ad infinitum and
is this realistic. In your paper you make it clear that there
are two parts to this. There is maximum recycling but you also
talk about the need to extend the lifespan of goods and materials
so that they can enter the waste stream less readily. There are
some obstacles, as we have heard—which I will come back
to—but are these realistic objectives? How far is a zero-waste
society practicable?
Ms Hill: The Cradle to cradle thesis
which McDonough and Braungart set out does have the twin cycles:
renewable and therefore degradable—which goes back to nature,
as it were—and the technical, non-renewable which you want
to keep in circulation. Of course everything will depend on how
easy it is to recover those sorts of materials from the products
they are put into. Interestingly McDonough and Braungart do not
like the idea of durability. Their suggestion in Cradle to
cradle is that products are never owned by the people using
them. They lease them and the materials continue to belong to
the companies which generate them, who then are responsible for
getting them back and extracting value from them at the end of
their life. That is a kind of ultimate producer responsibility:
the materials in the things we use never cease to belong to the
person who has generated them. That, again, is a very beguiling
concept but, in a globalised economy, we would have thought fairly
hard to put into detailed operation, so it is not something we
have translated into our advocacy. There probably is a role for
greater "product service systems" as they are called,
where you do not own the product, you lease it, or you lease what
it provides—such as painting or the chemical use whatever
-and then those things are reclaimed. In any case, however that
is organised, the key to whether it is practical will be how easy
it will be to recover materials, not necessarily at the end of
their life but at the end of one use or at the end of subsequent
uses. It is very difficult to say how practical or how costly
that is from where we are now because we design very little to
be reclaimed. As we have said before, we treat recycling as almost
a waste disposal technique or alternative to waste disposal, not
as an economic goal. Materials recovery is not in itself an economic
goal. If it were, and all the fiscal and regulatory framework
to the economy was geared to that happening, then, of course,
companies would find extremely ingenious ways, I am sure, of reclaiming
materials. At the moment we have a situation in this country with
aluminium, which is worth several hundred pounds a tonne on the
resource market, where we manage to recover only about 50 per
cent of what goes into drinks cans, despite having doorstep recycling
schemes and other things. That is simply because we have not organised
or wanted to get that material back. There is a market for it
but there is a disjunction between feeding that market and the
systems of recovery.
Q554 Lord Crickhowell: You rightly
talk about the importance of pricing here. One of the difficulties
we have is that our whole system at the moment is based on European
regulation, which was really introduced long before all this became
a priority. Basically it takes us to a weight-related situation
for disposal. We have heard from the aluminium manufacturers that,
yes, you can recycle aluminium to infinity almost, and you can
go on using it again and again, but we do not have a package at
the moment that makes it economic to encourage people, for example
in the domestic waste stream, to take all these metal containers
in which your food arrives and put them into a separate stream.
It is simply not economic to do so. On the other hand, there are
products where we can do it—and glass is an example—but
you can only recycle paper a limited number of times before it
stops being as good for the purpose. There are different problems
for different products. This leads us to come back to the whole
basis on which our waste collection system is based. We have a
situation, we were told, where bottles are all nicely put in separate
containers by you and me, but they are then thrown back into a
single collection, where they cannot be used except for uneconomic
road-making glass, because it is simply uneconomic for the people
to do the job. Would you comment on these related problems, please.
Ms Hill: The problem is not designing systems
for recovery. It is not just a question of designing the products.
The products are one end. In the idealised cradle-to-cradle world
products need to be simpler, easier to disassemble and without
toxic substances, so that materials are almost automatically easier
to use, but then, as you say, we have to get them back from where
they are being used. Let us talk about domestic waste. Although
it is disproportionate in tonnage terms it is more problematic
waste because it is more diverse and more mixed and more contaminated.
As Lord Lewis said, with a lot of commercial streams they are
easier to separate. If the right drivers are in place, either
fiscal or regulatory, that stuff is easier to get back, it is
just that we do not have those drivers. But domestic waste does
present genuine problems of what that material mix is. One route
into that is to talk about discriminating applications and materials.
Certain things are inevitably or invariably made of certain materials
and, therefore, there is a logic to the way consumers use them
and separate them or, if they are being mechanically sorted, there
are consistent universal technologies for sorting them into their
different component streams so that they are purer and less contaminated
and in higher bulk and, therefore, the markets for those will
be easier. At the moment there is a significant disjunction between
the way we envisage the use of materials, particularly new materials,
and how we think about their treatment at end-of-life and their
recovery. If we have time, perhaps I could ask my colleague Hannah
to talk a little bit about the compostable packaging work that
we did, because this completely exemplifies the lack of a system
designed with recycling and recovery in mind.
Miss Hislop: We ended up looking at compostable
packaging. It sounds quite a strange thing to focus on but the
supermarkets have come under such pressure from consumers to "green"
their packaging. You have probably noticed that supermarkets,
particularly for their organic ranges, their fresh produce ranges,
are increasingly using compostable materials to package fruit
and, for example, tomatoes. These are materials made from plants,
from corn or from cellulose or similar. In an ideal world this
would be in a closed loop, as Cradle to cradle envisaged.
It would be a loop of organic materials being grown from the soil
and then returned to the soil. The problem in reality is that
the system has not been designed to accomplish that. The supermarkets
have put them in place on their merits of appearing "green"
to consumers and being made from renewable materials but, in terms
of making sure these materials are composted, there are so many
barriers that you almost do not know where to start. For example,
very few local authorities have food waste collections—even
though this is probably likely to increase in the future. The
packaging itself is certified as compostable but that does not
necessarily mean it will break down in the home compost heap.
Your consumer might get this thing and think, "Oh, great,
it is compostable" and put it on their compost heap, but
six months later that tray is still sitting there. Equally, a
bottle made out of cornstarch, for example, looks exactly like
a plastic bottle, so it is very easy to put that bottle into the
recycling bin and think you are doing your bit and then that is
causing all sorts of downstream problems for recycling people.
There are lots of different issues in terms of the system rather
than just the product. Green Alliance has been working with supermarkets
and other people in the supply chain, from local authorities to
waste companies, to join up some of these issues.
Q555 Lord Crickhowell: That is very
interesting. You have concentrated on the design of the product
and what you put into the product and extracting from the product,
but I was concentrating a little with my question on the existing
problems with products you can recycle. Glass is a very good example,
because we are doing much worse than Europe in this context. It
does come back very much to providing an economic cycle that makes
it worthwhile to do separation and turn the product over. We have
an acute problem with the glass industry in this country. They
cannot get enough glass to recycle into bottle making, because
it has all been turned into an uneconomic road-making material
simply because there is not an incentive, because of the weight
question and the pricing structure in this country, to separate
bottles out. Similarly, there is this problem with aluminium.
A very high proportion is recycled, but the stuff that is not
recycled is this light material which it is not economic for anyone
to pick up and do anything about. Could you come back a little
and talk about that in the equation rather than supermarkets designing
the material or not designing the material. That is one aspect,
an important aspect, but it is not the one I was asking about.
Ms Hill: It is important because it does illustrate
the problems of mixed collection and separating material sources,
and much of this is about the tie-up between what local authorities
can afford in terms of the way they collect and then what kind
of sorting infrastructure they have and the markets available
to them. Several things have happened. The squeeze on local authority
funding and also worries about consumer reluctance to segregate
lots of different streams have moved towards co-mingled collection
of recyclates which are then difficult to sort mechanically. They
tend to be more contaminated: there is more broken glass, the
paper gets more contaminated, there is more food waste, which
lowers the quality of the recyclates. We have been fortunate recently
that the Chinese have been prepared to take fairly low-quality
streams of all kinds of things. Glass is separate—and I
will come back to glass—but a lot of the plastics they have
been prepared to take. But that is ending. We were told yesterday
by Recoup that the Chinese market for some of these more mixed,
less high-quality streams may soon be cut off and then we will
have these problems of what to do with that stream. With glass
we have the problem that we import much more green glass than
we use after it has been processed, so we have a difference between
quantities of green glass and clear glass. WRAP are trying to
redress that balance very successfully by persuading people either
to import in clear glass or to import liquid in bulk and then
bottle in clear glass rather than import in green glass. There
is a lot of very good work on glass to try to purify, as it were,
those streams and make them fit for market. It is not just about
their physical characteristics; it is about what markets are available
to reuse those materials. This is where we have fundamental problems
and will hit really fundamental problems in this country when
the Far East increases its own materials generation and reuse.
They may get well ahead of us. They may develop really very good
resource recovery systems and leave us with all the rather dirty,
scrappy, mixed-up, confused stuff to deal with ourselves, and
then it is going to get a lot more expensive.
Q556 Lord Haskel: You have told us
that this whole thing is a matter of political will, that it is
about waste reduction. You have just told us that we need to have
some more rules and regulations as to how products are designed
and that we have to have an idea of the whole life of the product
and design these things into it. Do you think there is a role
for regulation in the design process in order to encourage waste
reduction? What sort of regulations would you introduce? How would
you like to see them put in place? Are there any drawbacks?
Mr Lee: This is one of the areas we have been
looking at in the Sustainable Development Commission and, also,
internationally, as Julie says, because a lot of these supply
chains are global. There is definitely a role for regulation in
the design end, particularly in terms of product standards. In
the report I will if you will, which looked at sustainable
consumption, we took 18 different product areas and said, "What
has driven the change in these things?" because there was
a feeling at the time that it was consumers consuming differently
that had driven the change. In no case was that the main issue,
and very often the key switch point was regulation, particularly
on product standards. An interesting example would be white goods—and
it is interesting to talk about because of the interaction between
these different things. There you had four things happening. First,
you had labelling on energy efficiency of the product. There is
a myth that somehow the labelling drove the change, so that everyone
went and bought an A-rated fridge. No they did not. What happened
was that that interacted with product standard regulation at EU
level, which also interacted with the energy efficiency commitment
in the UK, which made the energy suppliers, the manufacturers
of the products and the retailers get together and say, "We
don't really want to be selling E-rated fridges. It doesn't look
very good for our brand," so you have quite a subtle interplay
between these different things. Another example globally, out
of the G8 process, would be this one watt initiative on standby.
What is the point for goodness sake in going out to every citizen
of the UK and nagging us all to switch the appliance off at the
wall—especially if you have kids like I have—when
you can design out the problem by getting standby to such a low
level it is negligible anyway. Another interesting example, which
we have highlighted in the product roadmap "You are what
we sell", was the Japanese initiative, the top-runner initiative,
because that says, "Let's look at where the best standards
of best practice are currently in an industry sector in terms
of products and then we will set the regulatory floor there. Then,
as the sector leaders improve their performance we will ratchet
up the regulatory floor." It seems to me that is a very good
way of doing it. They achieved 78 per cent improvement in energy
efficiency of products doing that. It is saying to industry, "We
are working with the grain of the market, we are basing our standards
on what we know the best people are capable of doing through innovation,
and we are also sending a clear signal that over time those standards
will get ratcheted up." You could use a similar analogy here
about the Code for Sustainable Buildings, which is a voluntary
standard, and Building Regulations, which should be coming up
behind. Those are good examples, I think. If you can get right
upstream in the design phase, you can design out some of the problems,
but you have to do that on an international basis, certainly working
through the EU, and often globally, because of where the supply
is coming from.
Ms Dibb: If you have developed standards, they
might be applied in a regulatory way, but they can also be applied
in other ways. For example, if you think about the vehicle efficiency
standards that now exist, they are being used around vehicle road
tax and they are also being used in relation to the congestion
charge. It is having the standards. They can also be used in procurement,
for example. We have been looking at government procurement: they
have the potential that procurement in the public sector can be
based on these kinds of standards. Or even within business: business
can use those standards when it is putting specifications on its
suppliers. People have said to us, "How do you design these
things out?" Designers can design whatever, and there is
a lot of great innovation in this country. Designers are coming
out of college who want to design for sustainability and they
are not being given the opportunity. One of the barriers to that
is the retailers, for example. There is great potential for them
to set specifications back upstream that will drive innovation
and they can use those standards. Therefore standards can be used
both in a voluntary setting as well as a regulatory setting.
Q557 Lord Crickhowell: Of course,
what you say in an ideal world is wonderful, but how then do you
deal with the other side of the argument, where people say that
too much regulation stifles innovation; where small businesses
say there is so much innovation around that they just do not know
where they are? As Lord Lewis pointed out, many businesses would
adopt these things, if they had the time and the energy to scrutinise
exactly what it is they do, because they could save money. For
instance, do you have a phone line so that small businesses can
phone up and be told in very simple terms exactly what to do?
Small businesses will say, "This is much too complicated
for us and we do not have much influence either up the production
line or down the supply chain." How are we going to deal
with that?
Ms Dibb: In two ways I think. One is that you
have to take a supply chain approach to this. Players in a supply
chain can act together. That is what we are advocating in the
product roadmapping approach, that you need to work with your
suppliers back up the supply chain. To answer your more specific
point about how to help small businesses: Government does have
a number of business support initiatives around this. It has been
rather fragmented. It has initiatives such as the Carbon Trust,
Envirowise, WRAP, and there is a simplification process going
on at the moment that is likely then to use Business Link—which
a lot of small businesses are already linked into—as being
the means through which small business can access that support.
One of the things we would like to say is that we are not convinced
at this stage that there is sufficient support, particularly for
small businesses, and there is a feeling within Government that
if there is an economic win for a business that the cost should
be borne by the business. Why should public money be spent in
subsidising a saving within business? I think that is a legitimate
argument up to a point, but for smaller businesses which do not
have the in-house resources and expertise and time, there are
particular barriers that need to be addressed in helping them.
When the Government rolls out this scheme, we would like to ensure
that it does so in a more integrated way—it is not just
about water here, carbon there, energy over here, but it is about
what a business can do in its whole business to address these
issues—and to ensure that there is sufficient support to
get over those initial hurdles, to the point where businesses
can see that they are making money out of it. Then the ball starts
rolling with them and they can take that further.
Ms Hill: The Government sold to business the
concept of the escalator on the landfill tax on the basis that
that money would be recycled to business. One of the means of
doing that was meant to be the BREW programme which has just had
all its funding cuts. There is no longer an element of recycling
landfill tax money to business through that route. The Commission
on Environmental Markets said that kind of support needed to be
increased and hypothecating a tax like the landfill tax is potentially
a very logical way of doing that. The Treasury have moved away
from that kind of idea and we think that is a shame.
Q558 Lord Lewis of Newnham: I think
hypothecation is your problem with the Treasury!
Mr Lee: Indeed.
Q559 Lord Lewis of Newnham: Could
I refer to the economic penalties, such as landfill taxes. They
have been very effective. You have a very interesting table in
your report, at page 18, which reflects the amount of landfill
dependent upon the country involved. There is a vast variation
within that particular scheme. Is there any correlation between
the charging that is made in various countries and the amount
of recycling or landfill that is going on in that country? I know
there are other factors, such as availability of landfill sites
and things of this particular nature, but it does also strike
me that when you talk about these factors, even for this country,
they are very variable. As you move around the country, you get
very large differences in the figures involved in it. How far
does this reflect the problem, which I think is a very important
one, that we do not have a centralised policy on things like landfill
and recycling? This is left to local authorities, who very often
act in their own particular way and change from one section to
another section, and you have a unitary authority which differs
from a local authority. Where the responsibility lies in this
particular problem seems to me to be an important factor. I think
you do say that if you were to increase the tax by five pounds
a year, in theory you could get to a much better equilibrium situation
scenario, but how far are landfill taxes really a restriction?
Ms Hill: An incentive, do you mean, to divert
from landfill.
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