Capitalism's lessons for environmentalism

 

There is a world of possibilities out there for improving sustainability. We know we can do recycling better. And yet, the system that we use in the UK does not scream efficiency. Why is that?

Today’s blog explores an alternative model used in Germany and how it can provide us much needed lessons for improvement. 

Holidays are usually an opportunity to relax or see new sights, or both, depending on your preference. They might also provide an opportunity to explore other cultures, their cuisines and histories. This Summer’s trip to Berlin proved to be all this and more: with Germany’s recycling system also catching our attention!

Germany’s approach to recycling is interesting, producing what we might call affordable environmentalism. Bottles are costed additionally at sale – a deposit which can be reclaimed when the container is returned. The system makes recycling worthwhile for everyone, with monetary incentives for returning packaging to retailers.

You might ask, how is that affordable if you pay extra for your drink? Indeed, Germany proves that such a system does not have to make the cost of products prohibitive. Their beer is still considerably cheaper than in the UK, despite these additional costs! While the additional cost put on bottles does make drinks slightly more costly, it does not make German drinks nearly as expensive as they already are in the UK. (Which raises the question of what the true cost of production is, which we will explore in our next blog.) 

It does, however, incentivise and enculturate good, sustainable recycling habits. Most importantly perhaps, it seems to work. Germany has been using it for over 15 years, and achieving some of the best recycling results in the EU.

It also means that bottles are returned, already pre-sorted, by consumers. This in turn makes the process of recycling much easier, more cost effective and efficient down the line, as materials are already sorted at source, helping minimise many of the problems that the recycling industry struggles with (like contamination, which we talked about in another recent blog). This also means that retailers can receive better rates for the sorted materials. 

While retailers and manufacturers also pay a fee for packaging, this provides incentives them not just to push the cost onto consumers, but to think about packaging in more economically and environmentally sustainable ways. According to How to Germany, this has led to a reduction of waste production of around 1 million tons annually.  

The system clearly produces value and motivation to be more sustainable for everyone involved – with manufacturers being rewarded for saving resources, retailers motivated to encourage recycling and incentives for consumers to develop good waste management habits. And it is clearly effective – with Germany’s recycling rates almost 20 percentage points ahead of the EU average, at around 67% in 2019.

Similar recycling figures in Europe are achieved by countries like Slovenia, Austria, the Netherlands, Belgium, Switzerland and Denmark. Unsurprisingly perhaps, two of those - the Netherlands and Denmark - also use similar systems of deposit-return incentives to boost their recycling rates (for a fuller guide to recycling in Holland, see). 

And if we are to be sustainable with our use of resources, we need to consider what their true cost is, both for the economy as well as environment. Glass, for example, although often promoted as the green alternative to plastic, is only so if reused sufficiently. Otherwise, although many factors impact the sustainability of each material, it could be argued that glass is neither more affordable not more environmentally friendly. It therefore makes good business sense (and ethical choice for consumers) for glass to be used in a more circular way. The same could be said about many other materials. 

So why is the UK ignoring such tried and tested methods to improve the circularity of our economy? The system seems to offer a viable alternative to what we currently do with our recycling in the UK. And we are clearly in need of such inspiration – with just 43% rate of recycling reported in the UK around the same time (2019). 

In fact, following a consultation in 2019, the UK government has announced plans to introduce a Deposit Returns Scheme (DRS) from 2023. With an overwhelmingly positive response to the survey (84% support for the proposed principles), the idea is clearly popular. And long overdue - with the industry working towards ambitious targets (90% of glass recycled by 2030), and the UK’s ambition to be “a world leader in resource efficiency,” it is high time for a new approach. But education is also needed to ensure buy in at all levels. In the consultation, local authorities were some of the key stakeholders who believed that the scheme was unnecessary, given the services that they already provide. 

What the story of Germany (and other countries, like Denmark and Holland) teaches us is that, once introduced, far from being seen as expensive, such a system can in fact provide both economic and environmental incentives that drive better recycling habits. It can provide a solid base for moving towards a more circular economy. Raising costs alone can put a strain on an already recovering economy, but by working in more connected, circular ways, sustainability can offer not just environmental, but also economic benefits for all.  

We will certainly be keen to see the new DRS plans come to fruition and will be keeping an eye on the developments. Watch this space to read more about how the situation unfolds.