Circular Economy - The Canadian Context

Circular Economy - The Canadian Context Sophie Bernard Professor of economics Polytechnique Montréal

Introduction How Canada could frame a transition towards a more circular economy? Policies for a more CE Avoiding burden shifting Environment Trade 2

Policies for a more CE Fiscal policies End-of-life regulations Extended producer responsibility Regulations against planned obsolescence Standards Responsible public procurement Support for innovation Legal framework Pricing externalities (resources esp. nonrenewable, waste, pollution) Incentives for putting materials back into circulation Deposit-refund systems Pay-per-bag, etc. Materials, EEE, vehicle, etc. Green Design Spare parts availability Guarantee Design, etc. Preference given to purchase of environmentally sensitive products and services Collaborative platform, etc. Possibility for co-operation (in design, value chain, B2B) antitrust framework Ownership of EoL products 3

Avoiding burden shifting Environment Is local/ce always better? Which scenario pollutes the less? Tomatoes grown in greenhouses, here Photo : Radio-Canada/Hugo Lavoie 4

Avoiding burden shifting Environment Is local/ce always better? Which scenario pollutes the less? Tomatoes grown in greenhouses, here Photo : Radio-Canada/Hugo Lavoie Or tomatoes from Mexico? 5 www.chebucto.ns.ca

Avoiding burden shifting Environment Is local/ce always better? Which scenario pollutes the less? The answer by the CIRAIG Photo : Radio-Canada/Hugo Lavoie Or tomatoes from Mexico? 6 www.chebucto.ns.ca

Avoiding burden shifting Environment Is local/ce always better? Which scenario pollutes the less? The answer by the CIRAIG Photo : Radio-Canada/Hugo Lavoie For older generation greenhouses 7 www.chebucto.ns.ca

Avoiding burden shifting Trade We lose the trace of our material «Since 2010, newsprint bales have been increasingly sold to brokers [...], an even more pronounced situation for lower-quality papers. Once completed by brokers, the trace is often lost.» Destinations for materials sold by sorting centers in 2012 (tons) 9 Source : Bilan 2012 RECYC-QUÉBEC

Avoiding burden shifting Trade 500% increase since 1992 International trade in waste (Mt) 10 Source : Bernard et al. 2014

Avoiding burden shifting Trade Canada in the top 20 11 Source : Bernard et al. 2014

Avoiding burden shifting Trade Canada, a net exporter Some countries could achieve greater autonomy (vis-à-vis the virgin resource) by reducing the export of recyclable material and by valorising it locally 12 Source : Bernard et al. 2014

Avoiding burden shifting Trade Waste Haven Hypothesis Copeland 1991 According to the Pollution Haven Hypothesis, trade, pollution control, policies, and tariffs can affect the location of the pollution-generating industry, thereby resulting in indirect trade in pollution the externalities from waste disposal are assumed to be confined to the country where the waste is disposed [and] the waste can be exported without having to move the wasteproducing industry. This is the Waste Haven Hypothesis Kellenberg 2012 Waste imports increase for a country whose environmental regulations deteriorate vis-a-vis it s trading partner, => differences in environmental standards play an important role in international waste trade flows for some country pairs. 13

Avoiding burden shifting Trade Intl Agreement on the movement of waste The Basel Convention (1989): Control of Transboundary Movements of Hazardous Wastes (incl. household waste and incinerator ash) and their Disposal 181 countries, not the USA. Hazardous wastes may not be exported to a party having banned the import of hazardous wastes. Parties may, however, enter into bilateral or multilateral agreements on hazardous waste management with other parties or with non-parties Ban Amendment (1995): The prohibition of ex ports of all hazardous wastes from OECD countries to non-oecd countries. EU Directive (2006). 71 countries, (not Canada) not yet into force. Kellenberg & Levinson (2014) find almost no evidence that the Convention and the Ban have resulted in less waste being shipped among countries. 14

Avoiding burden shifting Trade Lack of consensus on the definition of waste From the moment they were products to be recycled and not electronic waste, Belgium authorized their export, assures Mark Wulms. In any case, no one agrees on the definition of waste electrical and electronic equipment (WEEE). LeMonde.fr 15

Avoiding burden shifting - Trade From the moment they were products to be recycled and not electronic waste, Belgium authorized their export, assures Mark Wulms. In any case, no one agrees on the definition of waste electrical and electronic equipment (WEEE). LeMonde.fr 16

Avoiding burden shifting Trade Example of e-waste 21

Avoiding burden shifting Trade When the international market strengthens Green Fence (2013): China But around a quarter of the bottles, cans, and paper we were sending there were getting mixed in with too much food and trash, or even comingled with the wrong type of recycling. The bottles, cans, and cardboard that couldn t be recycled ended up in Chinese landfills. - Source: www.pri.org Today, three years after the implementation of Operation Green Fence, most recyclers are producing a much higher quality material. Hundreds of millions of dollars have been invested in new and upgraded facilities. - Source: www.waste360.com 22

Conclusion Policies can encourage material cycles Models need to be validated Local policies need strong international counterparts 23