Policy is an extremely important part of the circular transition. In the simplest terms, by putting a price on waste or banning certain kinds of harmful products and processes, consumers are more likely to choose more circular alternatives. Government can also facilitate demand for circular products through public procurement schemes. The potential of policy extends far beyond these measures and it is important to look pragmatically at different types of policy alternatives because the resources needed to implement them, the communities they impact, the problems they solve and the new problems they create will vary.
There are always costs to implement new policies. Therefore, a useful way to think about circular economy policies is in terms of who pays directly for the cost of waste and who is responsible for making sure that a policy is implemented. These are called responsibility models.
Consumer responsibility are levies or taxes on non-circular products. Requirements to pay for plastic shopping bags is one example. Deposit schemes are another which are intended to incentives consumers to return products after use. Deposit schemes are especially attractive because consumers have incentives to separate their waste and return it directly to recyclers which makes recycling much cheaper and easier.
In some countries consumer responsibility schemes are highly effective. In Norway, high deposit rates on plastic bottles combined with return systems that are accessible at supermarkets and convenience stores has helped to achieve recycling rates of nearly 100% for PET bottles.
Deposit schemes however must be balanced with the goal of delivering essential goods to consumers as efficiently as possible and in Lagos prices for many essential goods are already high for the average consumer. The development of infrastructure which makes deposit programmes accessible to consumers and recyclers is also important: the Norwegian example depends upon reverse vending machines which some argue are harder to administer in Nigeria because of the high capital costs and security issues.
Can we take inspiration from the Norwegian example, while adding Lagosian flavour to develop successful consumer deposit programmes for products that can be reused or recycled?
Extended Producer Responsibility (EPR) is the most common form of producer responsibility and is the model championed by Circular Economy advocates. An EPR scheme requires all industry players who introduce packaging and/or waste materials to the market to provide funding dedicated to collecting and processing their packaging after its use. EPR schemes have existed for many decades and there are hundreds of EPR schemes operating across the world. In Nigeria, national EPR programmes have been introduced for the Food and Beverage sector, Electronics and Batteries sectors, with the Nigerian Environmental Standards and Enforcement Agency working as the regulator for these programmes.
The Ellen MacArthur Foundation has recently issued a position paper which has been endorsed across a wide range of industry organizations including Diageo, FrieslandCampina, L’Oréal, Nestlé, PepsiCo, Pick n Pay, The Coca-Cola Company, Unilever, Tetra Pak and Indorama Ventures.
They argue that a good EPR programme has 4 key features:
Government responsibility covers activities such standard-setting and service provision by public agencies. Government policies can be used to constrain undesirable activities and facilitate those that are desirable. Policies that constrain are those that ban, tax or regulate materials or processes that are considered harmful. Facilitative policies include standard-setting and certification that support market trade and programmatic investment. For example, procurement schemes play an important role in generating demand for circular products. Governments have also played significant roles in the development and implementation of waste and infrastructure management systems, which are critical to support circular economic activity.
At both the state level and the federal level in Nigeria governments have been active standard-setters. It is however important to remember as an emerging economy resources are limited to implement standards, rates of tax collection are low and public budgets must address a number of urgent issues. Recognizing this, Lagos State is an advocate of public-private partnerships that are capable of aligning private and public sector interests and of efficiently leveraging resources to design and implement policy goals.
With the key word being efficiency what are the areas of policy action that can help to build the market for circular economy products and services?
Third party coordination is also described as “governance” because policy is not necessarily driven by governments and are frequently led by the private sector or civil society. Industry and multi-stakeholder schemes are prevalent on a range of sustainability issues and circular economy topics. They are often the outcome of consumer or governmental pressure and government participation in them covers a spectrum from limited to full engagement. Third party schemes are centred on standard setting, coordinated problem-solving, monitoring. They can deploy resources efficiently and to facilitate knowledge sharing but, without state support may not have adequate enforcement power or resources to achieve their desired goals.
Multinational companies are often signatories to global “governance” programmes and these set expectations of how they set priorities to reduce waste and work with consumers and suppliers. Large corporates such as BASF, Coca Cola, Unilever and Lafarge have global circular economy strategies that are linked to their participation in these programmes. Multinational companies are working hard to translate global strategies into locally relevant action. While there are some exceptions, large Nigerian corporates are less likely to participate in third party schemes because they are not subject to the same regulatory, investor or media pressures as the multinationals that are headquartered or listed in developed countries.