Category Archives: energy

EC: the Circular Economy Action Plan

In March, the European Commission published a comprehensive report on the implementation of the Circular Economy Action Plan, announcing that all 54 actions under the Circular Economy Action Plan launched in 2015 have now been delivered. 

This has accelerated the transition towards a circular economy in Europe. In 2016, sectors relevant to the circular economy:

  • employed more than four million workers, a 6% increase compared to 2012.
  • opened up new business opportunities,
  • gave rise to new business models
  • developed new markets, domestically and outside the EU
  • generated almost €147 billion in value added by repair, reuse or recycling
  • and accounted for around €17.5 billion worth of investments.

On this site in February there was a report about The Manchester Declaration by the UK community repair movement (follow the link to see a wide range of members). This called for the repair of products, especially electronics, to be made more accessible and affordable, while ensuring that product standards that make products easier to repair are adopted.

There are currently 1689 Repair Cafés in the world. One product successfully repaired at a Repair Café can prevent up to 24 kilos of CO2 being emitted, according to research by Steve Privett, who examined data of almost 3000 repairs carried out at 13 Repair Cafés in the UK.

These activities are in tune with the Circular Economy Action Plan formulated by The European Economic and Social Committee (EESC).

The EESC seeks to improve the Ecodesign Working Plan (2016-2019) in order to drive ‘wholesale’ change in behaviour through the supply chains of goods and services at a pace that would reflect the ambition of the Circular Economy Action Plan, introduced in December 2015.

The ecodesign of goods and services needs to go beyond just energy considerations – the component parts of a product should be easily recoverable for reuse and/or remanufacture and drive the creation of a strong secondary raw materials market. There must be a focus on the full lifecycle of products including:

  • their durability,
  • ease of maintenance
  • and repair,
  • potential for reuse,
  • upgradeability,
  • recyclability
  • and actual uptake after use in the form of secondary materials in products entering the market.

The EESC has reaffirmed its support for the use of Extended Producer Responsibility as a tool to promote the transition to circular economy business models. It focusses on the end-of-use treatment of consumer products, aiming to increase the amount of product recovery and minimize the environmental impact of waste materials.

An EC reflection paper finds that almost all elements of the Action Plan have been delivered but more steps will need to be taken to build a fully circular European economy. Europe is moving steadily towards a climate-neutral, competitive circular economy where pressure on resources and ecosystems is minimised.

 

 

 

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This time it must be different: ten years after the economic crisis – jobs in every constituency

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Global weather patterns have increased attention on the adverse effects of climate change and unease grows about the threats posed by automation.

American Democrats and Greens are taking on board the message delivered for years by Colin Hines, convener of the Green New Deal Group, more recently in the Guardian and repeatedly since then.

Implementation of the group’s Green New Deal infrastructure programme would mitigate the adverse effects of climate change, substantially reducing the domestic carbon emissions and automation-related unemployment.

However it will be important to build up public support for the massive systemic change advocated by many, including both Sir David Attenborough and Greta Thunberg. The often uncomfortable personal lifestyle changes needed must be seen as part of a diverse and popular programme addressing the social, economic and climate insecurity increasingly felt by the majority.

The changes would involve dramatically increasing the funding of:

  • employment in face to face jobs that address the worries of people of all ages, such as inadequate health-care, education and housing,
  • energy efficiency measures,
  • the increased use of renewables,
  • face-to-face caring in the public and private sector – difficult to automate or relocate abroad,
  • interconnected road and rail services in every community,
  • electric vehicles for private use
  • and an enormous nationwide green infrastructure programme ensuring the rapid decarbonisation of energy, transport, resource use and food production.

The changes must be couched in terms of being a massive local job generator and one that provides business and investment opportunities. Read more here.

America’s Green Party 

As the convenor pointed out in the Financial Times yesterday, the political advantage of this approach is that it would be seen by voters to be beneficial to every constituency and, as such, should appeal to all political parties. It will require a wide range of skills for work that will last decades, help to improve conditions and job opportunities for the “left behind” communities in the UK and ensure that the urgent demands of many for action on climate change can be more swiftly met.

 

 

 

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European Spring alliance will advocate a Green New Deal for Europe

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Yanis Varoufakis co-founder of DiEM25 (Democracy in Europe Movement) and former Greece finance minister, has advocated a Green New Deal for Europe.  Towards the end of an article (Dec.2018) he wrote:

This is what Democracy in Europe Movement 2025 – which I co-founded – and our European Spring alliance will be taking to voters in the European parliament elections next summer. See video here.

The great advantage of our Green New Deal is that we are taking a leaf out of US President Franklin Roosevelt’s original New Deal in the 1930s: our idea is to create €500bn every year in the green transition across Europe, without a euro in new taxes.

Here’s how it would work: the European Investment Bank (EIB) issues bonds of that value with the European Central Bank standing by, ready to purchase as many of them as necessary in the secondary markets. The EIB bonds will undoubtedly sell like hot cakes in a market desperate for a safe asset. Thus, the excess liquidity that keeps interest rates negative, crushing German pension funds, is soaked up and the Green New Deal is fully funded.

Once hope in a Europe of shared, green prosperity is restored, it will be possible to have the necessary debate on new pan-European taxes on C02, the rich, big tech and so on – as well as settling the democratic constitution Europe deserves.

Perhaps our Green New Deal may even create the climate for a second UK referendum, so that the people of Britain can choose to rejoin a better, fairer, greener, democratic EU.

Read the whole article here.

Postscript

On Monday, March 25, DiEM25 and European Spring gathered in Brussels to present the women and men from all corners of Europe who will take our common political programme to the ballot on May 25 – like Génération.s’ Benoît Hamon and LIVRE’s Rui Tavares among others – at the BOZAR theatre. This is where we officially launched our European Spring campaign – embodied in a New Deal for Europe, a set of ambitious economic proposals to save Europe from itself by transforming it.

 

 

 

 

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The Green New Deal infrastructure programme

Global weather patterns have increased attention on the adverse effects of climate change and unease grows about the imminence and widespread threats posed by automation.

In the Guardian, Colin Hines, convener of the Green New Deal Group, described the Green New Deal infrastructure programme which would mitigate such adverse effects. He pointed out that the UK could contribute to substantially reducing its domestic carbon emissions while addressing the serious threat of rapid and ubiquitous automation raised by Yvette Cooper. The report may be read here.

Jobs created in every constituency

Two major labour-intensive sources of local jobs were advocated: face-to-face caring in the public and private sector – frequently discussed – and infrastructural provision and improvements. Both are difficult to automate and can’t be relocated abroad

Infrastructural provision and improvements are crucial to tackling climate change, prioritising energy efficiency and the increased use of renewables in constructing and refurbishing every UK building.

In transport the emphasis would be on increased provision of interconnected road and rail services in every community, encouraging electric vehicles for private use.

Hines added that apart from the advantages of improving social conditions and protecting the environment, this programme will have two further very politically attractive effects:

“The majority of this work will take place in every constituency and will require a wide range of skills for work that will last decades. It would help to improve conditions and job opportunities for the “left behind” communities in the UK.”

 

 

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The right to repair

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In a recent New Economics Foundation newsletter, Duncan McCann focussed on what has long been known as planned obsolescence, citing the example of Apple, who, like many manufacturers, makes it expensive or impossible to repair its products. This means that their products have to be thrown away, creating huge amounts of electronic waste.  

The tide is turning

Meta, the news channel of the European Environmental Bureau (EEB), reports that Apple has been fined €8 million by an Australian court for refusing to fix iPhones and iPads that had been previously repaired by a third party.

The Manchester Declaration by the UK community repair movement (follow the link to see a wide range of members) calls for the repair of products, especially electronics, to be made more accessible and affordable, while ensuring that product standards that make products easier to repair are adopted.

The Restarters lobby the European Parliament

Last year Meta reported that the European Parliament voted in favour of measures to make consumer goods, including smartphones, longer lasting and more easily repairable by design. NEF adds that in December 2018, EU member states voted to set new manufacturing standards for fridges and freezers, with additional product groups being considered over the coming months.

Design decisions for products limit or totally preclude repair

Duncan McCann explains that manufacturers often make design decisions for products that limit or totally preclude repair: “Product parts are very often glued or welded together, which makes them hard to replace. Manufacturers use customised screws and fittings: when Apple released the iPhone 4, the phone was put together using a new screw for which you could not buy a screwdriver. This forced users to go through Apple to get the product repaired. Apple also used the repair process to retroactively fit these screws to all iPhones”.

From design and a lack of spare parts, to software and terms and conditions, manufacturers are using a whole range of tactics to block consumers’ ability to repair products.

In order to enable consumers to repair their phones, fridges, and other goods, manufacturers have to provide replacement parts, diagnostic tools and service manuals to all who need it — from individuals to independent repair shops. They also need to recognise the rights of consumers to open everything we own, modify and repair our stuff, and unlock the software in our products.

Software upgrades can be incompatible with older models and force people to buy new products when they expire.

Apple took this further in April 2018 when they disabled all iPhone 8s that had had their screens repaired by independent repair shops. Manufacturers can also control access to the diagnostic software needed to troubleshoot problems, limiting who can repair them.

The final tactic is to use warranties and terms and conditions to advise against or forbid certain actions, like opening the device to fix it.

Sony has various stickers that must be broken to open a Playstation 4 that specifically state that tampering with them invalidates the warranty. Although legally dubious, these signposts are an effective deterrent for people trying to repair their gadgets, and force them through the official repair chain.

Duncan McCann (left) asserts that manufacturers see repair from unauthorised vendors as a direct threat to their revenue, in terms of new product sales and profits from in-house repairs and ends:

“We urgently need legislation that forces manufacturers to design products to improve their repairability, make spare parts available to everyone at reasonable costs, update software responsibly, and not abuse terms and conditions”.

 

 

 

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Yunus advocates an additional financial system

Quartz magazine’s  Eshe Nelson spoke with Nobel prize-winner Mohammed Yunus at the One Young World summit at The Hague, which brings together 2,000 young people from 190 countries who are working to improve their societies, and the world at large, by fighting to end sexual violence, improve access to education and demand justice and human rights accountability from governments. The conversation has been summarised for this website.

Yunus believes that the whole capitalist system has failed: “The very number of poor people shows that it has failed. It pushes all the wealth to the top continuously and the top became very fat and owned by few people. What kind of system is that? We have to redesign the system”. He continues:

“Today, there’s only one kind of financial institution, which are banks for the rich. You are asking the banks for the rich to lend to the poor. The very system is designed in a completely different way. This machine doesn’t work for them. The way to really address the problem of the rejected people from the financial system is to create a new financial system. Capitalism went wrong because it started with the wrong premise. It misrepresents human beings and says we are driven by self interest. But human beings are both driven by self interest and selflessness.

The economic system forgot the selflessness part, and once we include it into the business, you have two kinds of business:

  • business to make money
  • and business to solve problems.

Then the economic system becomes different”.

In the 1970s, Yunus began work on what would become Grameen Bank in Bangladesh, which provides small loans to entrepreneurs, primarily women, who otherwise couldn’t access funds due to a lack of collateral and other resources. Grameen Bank takes deposits to finance the loans it offers; it decided in 1995 that it wouldn’t accept donations – for Yunus, ending poverty isn’t about charity. Last month, the 10-year-old US division of Grameen announced that it had provided more than $1 billion in loans to 106,000 women. Over the next decade, it plans to provide $1 billion in loans every year, and nearly double the number of branches, to 42. He comments:

“Microcredit still remains the same as when we started in Bangladesh 40 years back. But many more people around the world have started microcredit programs. Some took advantage of credibility of the word “microcredit”—they used it to make money for themselves, turning into loan sharks. After 42 years it’s not gone into the mainstream. Microcredit has remained at the NGO level, a footnote in the financial sector.

“Earlier this year, the World Bank showed how little progress there has been: The proportion of people with active accounts has stagnated and the gap in financial inclusion between men and women has stayed the same.

The very word “inclusion” is suspect. This is not about inclusion; it’s about having a separate kind of banking institution to address the people at the very bottom.

“Governments are used to giving grants to poor people for survival. Whether you are a rich country or a poor country, every country does that. Instead of giving grants, it’s much cheaper to do it as a loan. The money comes back, covers its own cost, and is sustainable. It’s a market-based system. Whichever way you do it, it has to create income. In order to create income you have to encourage people to become entrepreneurs”.

His view on giving cash transfers to entrepreneurs versus credit

“If it comes as a grant then there’s no responsibility, and the money can be misused easily. A loan comes with responsibility: you have to create a return from it. People become very relaxed if they are guaranteed money because they will get it again. If you fail, the second round of cash transfers will come, so why make an effort?

“The welfare system never produced any entrepreneurs. The welfare system in every country, you don’t see anybody coming out. They go in and stay there because you take care of them. Universal Basic Income is the same thing; it’s a welfare system. Charity doesn’t create activity. Charity is a dependence creation. Dependence creation is always a negative thing for a society. Systems should be geared towards creating activity. Creating entrepreneurship rather than dependence. Taking risk. That’s what human beings are for”.

 

 

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What is the main solution to the UK’s weak productivity growth?

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Chris Giles (FT) is examining why Britain is suffering from weak productivity growth. As part of his series, he wants to hear what readers think is the main solution to the UK’s weak productivity growth since the financial crisis of 2008. Share thoughts directly with him at ask@ft.com. Some may be published in a follow-up piece.

Prem Sikka, Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex, who tweets here, has already published thoughts on the subject. Briefly:

UK company dividends are high & investment low

This lack of investment and innovation means that the country’s productivity is low. The output per hour worked in the UK is about 16% below the average for the rest of the G7 advanced economies. The UK productivity is around 27% below that of Germany – despite the UK labour force working almost the longest hours in the western world and the country is neither rebuilding its manufacturing base, nor developing new technologies.

He itemises the boardroom dominance of accountants:

Sikka then argues that short-termism, leading to the neglect of the long-term prosperity of companies and the economy, has been accelerated by the boardroom dominance of accountants.

Compared with other developed countries, UK companies are paying out the highest proportion of their earnings in dividends.

According to the Bank of England’s chief economist, in 1970 major UK companies paid £10 in dividends out of each £100 of profits – but by 2015 the amount was between £60 and £70. 

And at the same time as paying this large percentage in dividends many companies were downsizing labour and reducing investment, lagging behind the EU average:

Sikka asserts that the most effective way to disrupt the accounting-think prevalent in boardrooms is by appointing directors who are focused on the long-term – appointing employees and consumers so that they can challenge the obsession with short-term returns and promote investment in productive assets.

Giles quotes Lord Andrew Tyrie, new chair of the Competition and Markets Authority, who told companies in July to stop “ripping people off” or face the full force of the watchdog’s sanctions. His focus is mostly on regulated markets such as banking and energy, where companies are accused of exploiting vulnerable households by extracting a “loyalty penalty” if they do not switch suppliers.

Lord Tyrie told MPs during his confirmation hearing for the CMA in April that retail banking and auditing were parts of the economy that did not work in the interests of the public or productivity.

Scott Corfe, chief economist at the Social Market Foundation, a think-tank, claimed that pro-competition moves had some potential for raising productivity growth rates. He suggested that consumers should be switched between energy suppliers automatically after several years to stop companies exploiting customer inertia.

See this video: https://www.ft.com/content/ae25a5bc-9405-11e8-b747-fb1e803ee64e (possible paywall)

After noting that since the mid-2000s, British industries have become more concentrated, with fewer companies enjoying larger market shares, Giles focusses on this ‘one key question’:

Is inadequate competition contributing to Britain’s feeble growth in output per hour worked? 

 

We look forward to the next article in the series.

 

 

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