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and Materials
Forew Role Execu PART W W W P Deve Evide Types Moni Department for Environment, Food and Rural Affairs
Nobel House 17 Smith Square London SW1P 3JR Telephone 020 7238 6000 Website: www.defra.gov.uk © Crown copyright 2008
Copyright in the typographical arrangement and design rests with the Crown.
This publication (excluding the royal arms and departmental logos) may be reused free of charge in any format or medium provided that it is reused accurately and not used in a misleading context. The material must be acknowledged as crown copyright and the title of the publication specified.
Foreword 3
Role of this report 4
Executive summary 5
PART ONE – THE SUSTAINABLE PRODUCTS APPROACH
Why sustainability? 10
Why sustainable products? 10
What do we mean by a sustainable products approach? 12
Products, services, materials and commodities 14
Developing a vision for sustainable products
About this vision 15
Overall vision 15
Vision for each stage of product lifecycle 16
Making it happen 20
Evidence, assessment methods and standards
Sources of evidence 21
Sharing evidence 22
All lifecycle stages 24
A list of priority impacts 26
Products methodologies – checklists and calculations 28
Standards and benchmarking 29
Types of market intervention
Overall approach to interventions 31
Tackling production and consumption 32
The range of product interventions 33
Drive development of new, more sustainable options 34
Move the market average towards the most sustainable 36
Cut out the least sustainable products 41
Monitoring progress 42
PART TWO – INITIAL OVERVIEWS
Product Groups 46
1) Food and drink 46
2) Buildings (including construction) 50
3) Appliances 53
4) Private transport 56
5) Clothing (including textiles) 60
Materials 62
Future priorities and questions for discussion 66
ANNEXES
1) UK and international studies of product impacts 69
2) Impact assessment checklist for policy makers 70
3) Progress on pilot product roadmaps 71
4) Progress on sustainable Government procurement 77
REFERENCES 83 1. w 2. 3. 4. W 5. g 6. JOAN Minist Biodiv
46 46 50 53 56 60 62 66 69 70 71 77 83
1. In this age of global supply chains, we often know little about the “life story” of the products we make, sell and buy – where they come from, who has made them and how, or where they go after we have finished with them. Yet most of the environmental issues and some social issues we face can be traced back to everyday products.
2. There is rapidly growing recognition that product sustainability is the way forward. Researchers and designers are looking to develop new types of products with reduced environmental and social impacts. Manufacturers are seeking to reduce waste and minimise carbon emissions. More retailers are marketing “green” or “ethical” products. And household spending on ethical goods and services is increasing.
3. In the wake of recent increases in energy and food prices it might be tempting to think that product sustainability is a luxury that we can do without. But the reverse is true. These price increases are driven in part by increased pressure on resources from increased global demand, and so they reinforce the need to find ways to reduce the resource intensity of product supply chains and make products themselves more efficient in their use of energy and natural resources.
4. We are not just talking about having a few more sustainable options. This is about making sustainability mainstream for all products. It’s a huge challenge. But there are huge environmental and social gains to be made, and huge business opportunities available in redesigning, developing and marketing all of our products in a more sustainable way.
5. The scale of the new business opportunities in moving to a low-carbon and more sustainable economy were reflected in the final report of the Commission on Environmental Markets and Economic Performance in November 2007. As we said in the Government’s response to that report ‘Building a low carbon economy’ [ref 9]: ‘there has been a transformation in the priority given to climate change and sustainability by companies, big and small, in every sector.’
6. I hope you will find this report a useful summary of recent progress and an effective springboard for future work. Government and businesses at all stages of the supply chain all need to help develop and deliver the more sustainable products of the future, and make the life stories of our products ones we are able, and proud, to tell.
JOAN RUDDOCK
Minister for Climate Change, Biodiversity and Waste
15.
The
16.17. 7. The Waste Strategy for England 2007 [ref1] included a commitment to “Establishing a new
products and materials unit within Defra to identify and catalyse actions across the supply chain, to improve the environmental performance of products across their life cycle; with a
progress report on delivery in Spring 2008.” This is that progress report.
8. The products and materials unit brings together work on: product lifecycle assessment; product information; and evidence on sustainable consumption and production and waste, in order to influence and support action on products within Government and elsewhere. It is also responsible for Defra’s work on efficiency standards for energy using products.
9. As the remit of the new Defra unit relates to environmental performance of products, that tends to be the main focus of the work presented here. It is, however, our aim to consider sustainability in the round and build the links across government and with stakeholders on the economic and social aspects of products.
10. This progress report is not just about what the new products and materials unit has done since summer 2007. Nor is it a detailed account of all production and consumption related activity in the country. The report aims to present an overview of key product and material related work across Government, with some examples from outside Government.
11. The report highlights a three step approach to improve product sustainability – vision, assessment and improvement. Part 1 of the report explains this approach and summarises overall progress by Government on each of the 3 steps, and part 2 gives an initial overview of vision, assessment and improvements for overall product groups and of work being done on materials. Government’s 10 pilot product roadmaps provide our case studies, applying this approach to 10 key products.
12. As well as describing progress, the report looks to future products work. We hope it will help to catalyse debate and action on how the products of the future should differ from the ones we have today and what Government, business and others need to do to deliver the changes. 13. This report includes a number of suggestions on the way forward, as well as questions for
discussion. Please send comments on any of these to [email protected] by the end of September. Defra will gather thoughts and views over the summer, and then organise discussions about the way forward including a stakeholder event in the autumn.
14. That will, of course, be far from the end of the story. Action by Government, business and others will need to take place for many years to come. We will continue to provide updates on Government progress through the Defra website: www.defra.gov.uk.
This [ref 3 impa The s cons utilit and impa The appl
15. This summary covers our approach to improving product sustainability, an overview of policy on each of the 3 steps, and key messages on future priorities. It does not cover the initial overviews for product groups which are in part 2 of the report, as these are already high-level summaries.
The Approach
16. The UK sustainable development strategy, Securing the Future [ref 2], highlighted the interdependence of economic, social and environmental goals. Products are fundamental to all three aspects of sustainable development. They are the currency of production, trade and innovation. And they underpin jobs and development. They help us to meet our basic needs and enhance our quality of life. But most environmental and some social impacts arise from the manufacture, distribution, use and disposal of products.
17. Evidence from a range of studies shows that food and drink, transport and housing products together account for 70-80% of total environmental impacts.
new supply with a oduct der to s also ducts, nsider on the since ctivity work vision, arises ew of ne on g this l help ones anges. ns for by the ganise s and tes on
This pie chart shows results from the EU study on the Environmental Impact of Products (EU EIPRO) [ref 3], which identified those products consumed in the EU that have the greatest environmental impact throughout their lifecycle.
The study looked at both private and public expenditure and volume consumed in the following key consumption areas: food and drink; clothing and footwear; housing, furniture, equipment and utility use; health; transport; communications; recreation and culture; education; restaurants/hotels; and miscellaneous. It focused on the eight environmental impacts listed above, attributing these impacts to the relevant product groups.
The study found that food and drink, private transport and housing (including buildings and appliances) were consistently the most important areas – across the different studies and the different environmental impact categories compared. Together they account for 70–80% of the environmental
Environmental impacts of product
groups across EU25
Housing: Buildings and appliances (20-35%) Passenger transport (15-20%) Food and drink (20-30%) Clothing (5-10%) Other (including
tourism and leisure)
(c. 5%)
IMPACTS ASSESSED Global warming Ozone layer depletion Acidification Abiotic depletion Photochemical oxidation Eutrophication Human toxicity Ecotoxicity
Environmental impacts of product
groups across EU25
Housing: Buildings and appliances (20-35%) Passenger transport (15-20%) Food and drink (20-30%) Clothing (5-10%) Other (including
tourism and leisure)
(c. 5%)
IMPACTS ASSESSED Global warming Ozone layer depletion Acidification Abiotic depletion Photochemical oxidation Eutrophication Human toxicity Ecotoxicity
18. Products can also be the focus of social and ethical issues at home and abroad – such as the labour conditions of production workers, the fairness of trading relationships or the treatment of animals.
19. There are three main steps to our approach to improving product sustainability:
20. This approach applies to ‘products’ in a wide sense, including services. In some cases, making a “product” more sustainable could mean delivering what it is that the consumer needs or wants in a significantly different way, through a different type of product or service.
Deve
21.Asse
22. 23. 24. W 25. W w1 Vision
The first step is to develop the overall vision of what we mean by sustainable. This means understanding environmental, social and economic impacts and trends, how they interact, how far and how fast we need to tackle them and products’ overall contribution to these impacts.
A transition to a low carbon economy is clearly a high priority. But society’s production and consumption of products is also associated with other environmental and social impacts – such as ecosystem degradation and unfair labour conditions. And we need to bear in mind that since many of the goods we buy are imported, products consumed in this country may well be linked to environmental, social and economic concerns elsewhere in the world.
2 Assessment
The second step is to assess the impacts – looking at both the scale of impact associated with the product in question, and the criticality of that impact in environmental or social terms. This means gathering evidence about the scale and nature of impacts associated with all stages of the supply chain, and assessing it to give a rounded picture of sustainability over the whole lifecycle. Sometimes there may be difficult questions about which impacts should take priority.
Once we have that assessment, we can use it to rate or benchmark products against agreed standards, allowing more straightforward comparisons between them. These ratings and benchmarks can then serve as the basis for a range of interventions.
3 Improvements
The third step is to put in place the improvement strategy to tackle the impacts and deliver greater sustainability. The action needed will vary enormously between products. Generally there will need to be a range of actions to address impacts at different stages of the supply chain.
Some action will be for Government, some for business and some for consumers. Some will be local, some national and some international. In many cases there will need to be collaboration between those involved in different stages of the product lifecycle – to ensure that actions are targeted where they will have the most impact, and that improvements in one part of the supply chain are not outweighed by negative impacts in another.
Putting in place the improvement strategy includes monitoring and reviewing actions to learn what works and what doesn’t – and to know whether we are on track to a sustainable future.
as the tment
aking eds or
Developing a Vision for Sustainable Products
21. The report includes an attempt to describe what the future might be like – with the intention of stimulating debate and action to help turn the possibilities and into realities. It envisions a future where:
• All products are “sustainable products”. Sustainability is a normal and expected part of product and service design, manufacture, distribution and marketing;
• Businesses compete to drive up standards of sustainability across the range of products on the market. They recognise the economic benefits of resource efficiency and understand the importance of a healthy natural environment in underpinning their long term survival; • Businesses at different stages of the chain routinely work together to minimise overall
negative impacts; and
• Consumers routinely take into account environmental and social considerations when buying, using and disposing of products.
Assessment
22. Evidence and assessment methods are used to decide whether or not a product is sustainable, and so whether action needs to be taken to improve it. Good evidence and practical assessment methods are crucial to the delivery of product sustainability improvements. It makes sense to share evidence between sources where possible – both for efficiency and to help develop an agreed understanding of impacts.
23. The most obvious impacts associated with a product are often those resulting from its use and maintenance – the direct impacts. However, the main tenet of product policy is to look across the whole supply chain at the impacts over the whole product lifecycle – the embedded impacts of a product. This means considering not just the impacts of use/maintenance, but also at the impacts associated with its sourcing, manufacture, distribution and recovery/disposal. In the age of global supply chains, many of the economic, environmental and social impacts from UK consumption of products and services are international. Looking at embedded impacts often reveals very significant impacts which are not apparent when looking only at the use/maintenance stage.
24. We need to make judgements about which environmental, social and economic impacts are important. This depends to some extent on the decision being made and so there are many different check lists of priority environmental, social and economic impacts used by business, Government and others for different purposes.
25. When it comes to calculating impacts, lifecycle analysis provides a flexible, outline approach which can be adapted to suit different situations. Once we have assessed the impacts, we need agreed standards, benchmarks and comparative rating systems for particular products or product groups as a basis to support a range of improvement actions.
eans w far and ch as since nked h the eans pply ycle. reed and eater need ll be ation s are pply earn re.
Improvements
26. A range of actions will need to be taken by Government, business and consumers to drive changes across product lifecycles.
27. Within any product group, and at any point in time, there is likely to be a range of products on the market with varying degrees of sustainability. Most products are somewhere in the middle of the range, with a few more sustainable than average and a few less sustainable than average. The range of product interventions needs to include action across the whole sustainability range to:
• Drive the development of new products that are more sustainable than all of the current options
• Move the market average towards the most sustainable of what is available and • Cut out the least sustainable products.
28. The graph below shows this typical product distribution and lists the types of intervention which are effective in each of the three sections.
29. The aim of product interventions is to encourage the whole market to become more sustainable over time – i.e. to drive innovation and move the product distribution curve towards the green end of the arrow.
Way
30. 31. w 32. 33.Less PRODUCT SUSTAINABILITY More
Numbers of pr
oducts in the market
Interventions:
• Support innovation
Interventions:
•Pricing and trading •Voluntary initiatives •Producer responsibility •Business support •Procurement •Labelling •Public information Interventions: •Minimum standards
PRODUCT INTERVENTIONS
– Overall approach
Cut out the least sustainable products Encourage development of new, more sustainable products
Drive the existing market towards greater sustainability
drive oducts n the e than whole of the and ention more wards
Way Forward
30. The impacts, and the potential for improvement, vary from one product to another, but the bottom line is that all product groups need to improve.
31. Government will continue to work on the product groups covered in this report (food and drink, buildings, appliances, private transport and clothing) and Defra will continue to work, with others, on the pilot product roadmaps which are already in train.
32. The report suggests the following criteria for deciding whether, and to what extent, Government should, in future, become involved on other products:
1. Scale of environmental and social impacts associated with the product throughout its lifecycle
2. Likely cost-effectiveness of Government action to reduce lifecycle impacts (i.e. the information required for a policy Impact Assessment), including whether:
a) Government procures the product
b) business and others are willing to work with us to take further action c) Government involvement is essential to make change happen
3. EU or legislative requirement to take action 4. Level of stakeholder interest
33. However, the scale of the change needed is much greater than Government alone can drive. Good practice on product sustainability is already becoming much more widespread in business. This trend needs to continue and accelerate. Government, businesses, consumers and others will all have to act if we are to deliver improved product sustainability across the board.
Why sustainability?
34. The UK sustainable development strategy, Securing the Future [ref 2], highlighted the interdependence of environmental, social and economic goals. Nationally, we have to continue to act to improve standards of health, education, employment, housing and security in our society. Extending this globally is a huge challenge, in a world where population continues to grow and where improved quality of life for many people means increased consumption – including the more than one billion people who currently live on less than one dollar a day. 35. These needs can only be met if we also address the stress that consumption patterns place on
natural resources and environmental systems on which global society depends. Avoiding dangerous climate change is a high priority: Sir Nicholas Stern’s report [ref 4] showed that it is possible to reduce greenhouse gas emissions at a cost to the global economy which would be far less than the impacts of unrestrained climate change. In the UK, we have a legally binding target to reduce greenhouse gas emissions by 12.5 per cent below base year levels by 2008-12 (base year is 1990 for carbon dioxide, methane and nitrous oxide) and a more ambitious national goal of reducing carbon dioxide emissions by 20 per cent below 1990 levels by 2010.
36. As well as tackling dangerous climate change, we must keep within environmental limits. The UN’s Millennium Ecosystems Assessment [ref 5] shows how people’s health, wellbeing and prosperity depends on services provided by the natural environment, including provisioning services, such as fresh water, food and fibres, and regulating services such as climate regulation and flood risk management. Environmental limits for these natural resources are hard to define and many of the issues are global, but Defra has set out its approach to managing them in the UK [ref 6 & 24].
Why sustainable products?
37. Products help us to meet our basic needs and enhance our quality of life. They are the currency of production, trade and innovation and they underpin jobs and development.
38. But it is also true that most environmental impacts arise from the manufacture, distribution, use and disposal of products. There is a clear link between today’s environmental pressures and the food we eat, homes we live in, appliances we use, cars we drive and clothes we wear. Evidence from a range of studies shows that food and drink, transport and housing products (including buildings and appliances) together account for 70-80% of environmental impacts.
This [ref 3 impa The s cons utilit and impa The impa Prod lifecy The appl envir impa 39. 40.
d the ntinue n our ues to tion – day. ce on ends. owed which egally levels more 1990 limits. g and oning lation define in the rrency ution, es and wear. oducts pacts.
This pie chart shows results from the EU study on the Environmental Impact of Products (EU EIPRO) [ref 3], which identified those products consumed in the EU that have the greatest environmental impact throughout their lifecycle.
The study looked at both private and public expenditure and volume consumed in the following key consumption areas: food and drink; clothing and footwear; housing, furniture, equipment and utility use; health; transport; communications; recreation and culture; education; restaurants/hotels; and miscellaneous. It focused on the eight environmental impacts listed above, attributing these impacts to the relevant product groups.
The results are based on an analysis of seven existing studies which compared environmental impacts of products and services across the lifecycle to varying extents and a new “CEDA EU25 Products and the Environment model” which quantified total environmental impacts over the lifecycle of the product groups (i) per product consumed and (ii) per euro spent.
The study found that food and drink, private transport and housing (including buildings and appliances) were consistently the most important areas – across the different studies and the different environmental impact categories compared. Together they account for 70–80% of the environmental impact of private consumption and approximately 60% of total consumption expenditure.
Environmental impacts of product
groups across EU25
Housing: Buildings and appliances (20-35%) Passenger transport (15-20%) Food and drink (20-30%) Clothing (5-10%) Other (including
tourism and leisure)
(c. 5%)
IMPACTS ASSESSED Global warming Ozone layer depletion Acidification Abiotic depletion Photochemical oxidation Eutrophication Human toxicity Ecotoxicity
39. Products can also be the focus of social and ethical issues at home and abroad – such as the labour conditions of production workers, the fairness of trading relationships or the treatment of animals.
40. Changing lifestyles and growing consumption are bringing even greater demands. At the same time environmental and social issues are rising up the public consciousness. Consumers are increasingly considering the impacts of their behaviour and the market for sustainable products is growing and expanding [ref 7].
41. Given the evidence of the scale of product impacts, action to deliver a more sustainable future must include action on products. The challenge for us all is to move to a point where all products
42. This challenge is also a huge business opportunity. Not just because efficient use of resources will drive down costs whilst reducing environmental impacts. There are real opportunities for businesses that anticipate these changes and consequent consumer behaviours, and design and market the products to meet them [ref 8].
43. Government aims to encourage and drive innovation, research and design, to enable the delivery of sustainability improvements throughout the lifecycle of all types of products. The recent report of the Commission on Environmental Markets and Economic Performance [ref 9] said that “by making the UK one of the best locations in the world to develop and introduce low carbon and resource-efficient products, processes, services and business models, the country can attract the investment today that will create tomorrow’s prosperity and jobs, as well as contributing to a cleaner environment.”
What do we mean by a sustainable products approach?
44. Our sustainable products approach sits within our overall vision for a sustainable future, based on the principles of:
• living within environmental limits;
• ensuring a strong, healthy and just society; • achieving a sustainable economy;
• using sound science responsibly; and
INTERNATIONAL ACTION ON SUSTAINABLE PRODUCTS United Nations Marrakech Process
http://www.unep.fr/pc/sustain/10year/home.htm
The Marrakech process is a global initiative responding to a call from the World Summit on Sustainable Development in Johannesburg for a 10 year forward plan to promote the shift towards sustainable consumption and production.
Consultations to identify priorities for each continent were held between 2003 and 2005 and strategies are now being developed.
There are seven Task Forces led by national governments with other partners, including one on Sustainable Products led by the UK. Work has focused mainly on energy using products.
Other activities include a Business and Industry Forum, an Non-Governmental Organisation Forum, and Co-operation Dialogues on Sustainable Consumption and Production and Poverty Reduction with development agencies and regional banks.
European Action Plan on Sustainable Consumption and Production http://ec.europa.eu/environment/eussd/escp_en.htm
As part of the follow up to the Marrakech process, the European Commission is developing an action plan to: identify and overcome barriers for sustainable consumption and production; ensure better coherence between the different related policy areas; and raise awareness among citizens and change unsustainable consumption habits. We expect the Commission’s proposals to be published very soon.
45. w 46.
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45. This means assessing and reducing the overall environmental and social impacts associated with products across their supply chain – from raw materials, through manufacture, distribution and retail, use and maintenance to end of life. Policies and actions to improve products and to bring forward new products need to take account of all these stages, so that impacts are not simply ‘shifted’ from one stage to another.
46. There are three main steps to the approach:
1 Vision
The first step is to develop the overall vision of what we mean by sustainable. This means understanding environmental, social and economic impacts and trends, how they interact, how far and how fast we need to tackle them and products’ overall contribution to these impacts. A transition to a low carbon economy is clearly a high priority. But society’s production and consumption of products is also associated with other environmental and social impacts – such as ecosystem degradation and unfair labour conditions. And we need to bear in mind that since many of the goods we buy are imported, products consumed in this country may well be linked to environmental, social and economic concerns elsewhere in the world.
2 Assessment
The second step is to assess the impacts – looking at both the scale of impact associated with the product in question, and the criticality of that impact in environmental or social terms. This means gathering evidence about the scale and nature of impacts associated with all stages of the supply chain, and assessing it to give a rounded picture of sustainability over the whole lifecycle. Sometimes there may be difficult questions about which impacts should take priority.
Once we have that assessment, we can use it to rate or benchmark products against agreed standards, allowing more straightforward comparisons between them. These ratings and benchmarks can then serve as the basis for a range of interventions.
3 Improvements
The third step is to put in place the improvement strategy to tackle the impacts and deliver greater sustainability. The action needed will vary enormously between products. Generally there will need to be a range of actions to address impacts at different stages of the supply chain.
Some action will be for Government, some for business and some for consumers. Some will be local, some national and some international. In many cases there will need to be collaboration between those involved in different stages of the product lifecycle – to ensure that actions are targeted where they will have the most impact, and that improvements in one part of the supply chain are not outweighed by negative impacts in another.
Putting in place the improvement strategy includes monitoring and reviewing actions to learn what works and what doesn’t – and to know whether we are on track to a sustainable future.
Deve
Abou 52. 53. 54. Overa 55. 56. 57. 58. 59. 60. 47. This is the approach being followed for the Defra’s pilot product roadmaps.48. The following three sections of part 1 of this report cover the three steps of the sustainable approach – vision, assessment and improvements. The initial overviews for key product groups which are in part 2 of this report are also organised into these three steps.
Products, services, materials or commodities?
49. Our approach applies to ‘products’ in a wide sense – including services. Although not physical objects, services are ‘products’ supplied to meet needs and wants. They have environmental, social and economic impacts which need to be managed (and they use products to deliver the result).
50. When considering changes, we need to think about products and services together. In some cases, making a “product” more sustainable could mean delivering what it is that the consumer needs or wants in a significantly different way, through a different type of product or service.
51. Materials and commodities are common to the supply chain of many products and services (for example metals, plastics, chemicals, timber, cotton or palm oil). They are often internationally traded, and are prominent at each end of product lifecycle – as raw materials and as waste materials.
Pilot Product Roadmaps
Defra is working with a wide range of stakeholders to pilot the development of 10 “roadmaps” to deliver improved product sustainability. The products covered are:
The ten pilots are all following the approach of developing a vision for the product, gathering evidence to assess the impacts of that product, and then working with a wide range of stakeholders to develop improvement strategies for their product. Annex 3 gives an update on progress with each of the pilot roadmaps.
Product group Pilot roadmap
Food and drink Milk
Fish and shellfish
Appliances Televisions
Domestic lighting
Buildings Window systems
WCs Plasterboard
Private transport Passenger cars
Developing a Vision for Sustainable Products
About this Vision52. This is an attempt to describe what the future might be like. It draws from a range of horizon scanning reports and other visions and strategies. It is not comprehensive or precise, but an indication of a general picture. It suggests a general direction of travel, with the intention of stimulating debate and action to help turn the possibilities into realities.
53. It consists of an overall vision, followed by visions for each stage of the product lifecycle. For each stage there is one example of action being taken now. These are intended to provoke thought but of course cannot be comprehensive, and their inclusion does not represent a Government endorsement. There are many other examples we could have chosen.
54. Part 2 of this report gives indications of what this vision might mean for key product groups, and summarises actions currently being taken to improve sustainability of those product groups.
Overall Vision
55. In the future all products are “sustainable products”. Sustainability is a normal and expected part of product and service design, manufacture, distribution and marketing. 56. Businesses compete to drive up standards of
sustainability across the range of products on the market. They recognise the economic benefits of resource efficiency and understand the importance of a healthy natural environment in underpinning their long term survival.
57. Consumers routinely take into account
environmental and social considerations when buying, using and disposing of products. 58. Researchers, designers, manufacturers, retailers,
consumers and waste managers – whether in the UK or abroad – understand the environmental and social consequences of their decisions, and the implications of those decisions for the rest of the supply chain.
59. Businesses at different stages of the chain routinely work together to minimise overall negative impacts.
60. All businesses are clear on what action they need to take to minimise the environmental and social impacts associated with their products, and on the relative priorities attached to tackling different impacts. Trade offs between nable roups hysical ental, deliver some at the oduct rvices often terials aps” ering e of e on
65. Manu 66. 67. Distri 68. –
Vision for each stage of Product Lifecycle
Research and design
61. Product design is sustainable design. Whole lifecycle environmental performance is a normal consideration for researchers, innovators and materials scientists. They work with product designers and the rest of the supply chain to design, develop and market products and services with minimal environmental and social impacts. The UK is a leader in the field and influential in the international stage.
62. UK innovators and designers lead the way on new mainstream products and services. These differ from products available today. They use fewer newly extracted raw materials and more recycled materials. Some products are replaced with technology or other types of services [ref 10]. Products are designed so that they are modular, multi functional, repairable and upgradeable. They are more efficient and have fewer environmental impacts in use. Products have improved longevity and can be more easily reused or recycled when they do come to the end of their life.
Raw material acquisition
63. We have a strong and thriving economy which is based on sustainable sources.
64. We take into account the full range of impacts in the way that we harness and harvest resources. For those renewable resources which require replenishment – e.g. fish, timber – we harvest them at the rate necessary to ensure an enduring supply. Where non-renewable materials are essential, we re-use, remanufacture or recycle existing stocks.
Developing a Vision for Sustainable Products
Soon available?
“accurate” Intelligent Food Packaging
Hayley Owen, Laura Passmore, Christopher Syrett were winners in the Sustainable Packaging category of the Royal Society of Arts Design Directions Awards 2007/08 with their designs for “accurate” intelligent packaging. The packaging uses nanoskin technology to keep foods colder for up to ten times longer than conventional packaging, extending their shelf life and reducing both packaging and food waste. Food degradation is shown via a digital Time Temperature Indicator which makes it easier for consumers to understand the degradation process. An expanding blue bar means that the contents are safe to eat. When it hits the orange circle the package will turn completely orange, indicating that the food is not safe to eat.
http://www.rsadesigndirections.org/design-directions/2007-08/exh/artist/artist.php?workid=015_OPS Now Mat The com the c with desig samp proje the Cou http Now Cent The bene selec and deve colla on b pote http
65. We are living within our environmental means.
Manufacture
66. Manufacturing continues to play an important role in the national economy (in particular in high-technology sub-sectors, such as aerospace, pharmaceuticals, and ICT) [ref 10] and manufacturing processes continue to operate to high environmental and social standards. 67. Sustainability is a key criteria in product specifications – both to meet normal business models
and because it provides consumer appeal and is communicated along the supply chain. Manufacturers ensure their materials are sourced and their products designed so as to minimise impacts throughout their lifecycle. Where products for the UK market are manufactured abroad, UK retailers and consumers drive improved environmental and social standards. There are high levels of remanufacturing. Manufacturers communicate relevant and clear information about products to retailers and distributers.
Distribution and Retail
68. Retailers demand sustainability as a pre-requisite when sourcing products and services. They ensure their products are sold with appropriate and useful information about their lifecycle – including information about how to use and dispose of products to minimise impacts.
ormal oduct rvices ential rvices. s and rvices e and use. ey do arvest – we wable ging s for oods and Time ation ange Now available!
Materials and Design Exchange
The Materials and Design Exchange helps bring together the design and material technology communities to stimulate innovation, promote the transfer of materials knowledge and improve the competitiveness of UK business. It is forging a link between designers and others concerned with metals, plastics, textiles and the full range of modern materials. It offers networking of design through all sectors of the materials community, a resource centre for reference materials, samples and processes, and “Spark” awards and assistance for innovators with development projects. The network is formed from a partnership between the Royal College of Arts, the Institute of Materials, Minerals and Mining, the Institute of Design Engineers, the Design Council and the Engineering Employers Federation South.
http://www.iom3.org/MADE/ and www.made.uk.net
Now available!
Centre for Remanufacturing and Reuse
The centre aims to stimulate increased remanufacturing and reuse where sustainability benefits can be realised. It operates in three areas: purchaser risk reduction; the promotion of selected markets and business models; and the generation of product financial, material, and energy benefits to present the case for reuse. Ongoing work includes: Working with BSI to develop standard definitions for remanfacturing and re-use; running an industry/academe collaboration in corporate clothing re-use; producing cost-benefit analyses of policy interventions on behalf of Defra/Treasury; building a web directory of remanufacturers with tools to assist potential remanufacturers.
End o 73. 74.
w 75. 69. Sophisticated systems for logistics (perhaps using radio frequency identification) [ref 11] are
used to minimise waste and optimise transport and distribution. Retailers and distributers have acted to reduce packaging needs and minimise packaging waste [ref 1]. There has been a shift from road and air transport to more sustainable sea, rail and canal freight. Retailers consider sustainability when storing and displaying and products (for example using energy efficient store lighting and refrigeration units).
Use and maintenance
70. Consumers have confidence that all the products and services available on sale are sustainable. They expect lifecycle assurance when they buy a product – with clear information on where the product has come from, how it was made, how to maintain and use it, and what to do when they no longer want or need it [ref 12].
71. Government and businesses have sustainability requirements as a normal part of their procurement contracts – and through these they drive competition amongst designers, manufacturers and retailers to achieve further sustainability improvements [ref 13].
72. Business and individual consumers use the products they buy in ways which minimise environmental impacts. Changes in product design and product information have made this normal and easy to do.
Developing a Vision for Sustainable Products
Now available! Traidcraft plc
Traidcraft plc offers the widest range of fairly traded products in the UK. In 2006, it received a Queen's Award for Enterprise in the Sustainable Development category. The company advocates fair trade as being integral to sustainable development and promotes ethical, transparent business practice between all parties. Amongst Traidcraft's sustainable practices is a strong commitment to developing long-term relationships with producers, thus providing stability and security of trading; and a policy of sourcing as much produce as possible from the developing world through direct purchasing from these countries. It also uses 100% renewable electricity at its headquarters building. http://www.traidcraft.co.uk/
Now available!
Permanent Publications
Permanent Publications' mission is to publish information which encourages people to live more healthy, self-reliant and ecologically sound ways of life. It publishes Permaculture Magazine – solutions for sustainable living – which has around I00,000 readers in 77 countries. It also publishes a number of books which are distributed to the UK and North America. In 2008 the company received the Queen' Award For Enterprise in the Sustainable Development category, and in 2007 they won the National Energy Efficiency Awards in the small and medium sized business category.
http://www.permanent-publications.co.uk/index.htm Now Mar The to th treat prod one redu were allev by 6 beco http
End of life
73. Improvements in product design, manufacture and use mean that less waste is generated. And what is generated can be more easily reused or recovered [ref 1].
74. All business and households re-use their wastes where possible and routinely separate their waste into different types for recycling and recovery [ref 1].
75. There are new, convenient, facilities to recycle and recover waste and environmental standards for waste management activities remain high [ref 1].
1] are s have a shift nsider ficient nable. re the when their gners, nimise e this ed a s fair ness nt to ding; irect ding. more ne – shes pany they Now available! Marshalls plc
The company was awarded the MarGazeley Process Premier Award at The Business Commitment to the Environment Environmental Leadership Awards 2007 in recognition of advances in water treatment and waste management methods at their new and existing factories for landscaping products. Process water treatment and the use of captured rain water have been introduced in one new factory and is almost completed in an older existing one. In the new plant a 90% reduction in mains water consumption and a reduction in process waste to landfill of 9,500 tonnes were achieved. At the older plant previous water supply and pressure problems have been alleviated and the company has benefited in cost savings from the reduction of mains water usage by 65% and of discharge process water by over 90% in less than three years. Work proceeds to become self sufficient in water usage in the near future.
80. v
Sour
81. 82. 83.Making it Happen
76. This vision is not something which will be achieved overnight, nor something which will be delivered by Government alone. 77. For this vision to happen, governments,
businesses and consumers all need to embrace change.
78. Each needs to help the other to understand the connections between our appliances, our houses, our food, our cars, our clothes and the serious national and global environmental impacts we hear about in the news.
79. Together governments, businesses and
consumers must drive the shift to a sustainable economy, take advantage of the new opportunities this offers, and make unsustainable products a thing of the past.
Developing a Vision for Sustainable Products
Future plans on vision
The Horizon Scanning Centre was set up to help Government identify the implications of emerging science and technology, and enable Government and others to act on them. It carries out regular cross-Government strategy horizon scans and supports horizon scanning work carried out by others inside Government. The centre is currently refreshing its suite of reports. The updated and new reports will be published in autumn 2008.
Developing a vision is part of the product roadmapping process. Each of the pilot product roadmaps will be developing a vision for their product (see annex 3).
Question 1: How can you improve this draft vision for sustainable products? What is your vision for your sector or product?
80. Evidence and assessment methods are the second step of our products approach and are at the very heart of work on sustainable products. They are used to decide whether or not a product is sustainable, and so whether action needs to be taken to improve it. Good evidence and practical assessment methods are crucial to the delivery of product sustainability improvements.
Sources of evidence
81. There is a wide range of evidence relevant to understanding product impacts – see the list of UK and international studies of product impacts at Annex 1.
International
82. The European Commission has carried out a number of evidence studies, notably the EIPRO study [ref 3] which gives a good overview of the contributions made by the main product groups to a basket of eight environmental impacts (see box on page 11), as well as more specific studies such as those to support the Ecodesign of Energy-using Products Directive (see http://ec.europa.eu/enterprise/eco_design/index_en.htm) and to investigate the improvement potential in cars, buildings and meat and dairy products (see http://ec.europa.eu/environment/ipp/identifying.htm).
Government
83. Defra’s Sustainable Consumption and Production evidence team works with others to promote the development of robust, accessible and understandable evidence that is actively shared and used to support the development of more sustainable products. This includes research on product impacts as well as on policy interventions, business performance and citizen behaviour. Further information and project reports can be found at http://www.defra.gov.uk/environment/business/scp/research/index.htm.
Examples of completed projects include:
• Environmental impacts of food production and consumption: Reviewed available evidence on a range of food products consumed in the UK, to inform policy on reducing global supply chain impacts [ref 14].
• PAS 2050 methods review: Examined existing approaches to quantifying GHG emissions embedded in products and services, to inform the development of a Publicly Available Specification [ref 15].
• Public understanding of sustainable finance and investment: Explored focus group discussions to understand the public’s views on sustainability in relation to finance and investment decisions [ref 16].
• Business resource efficiency: Calculated potential gains available to UK business from no or low-cost resource efficiency measures as being in the order of £6.4bn a year. It has helped to identify where big gains can be made and how to overcome barriers to securing these benefits [ref 17].
• Carbon balances and Energy Impacts of the Management of UK Waste Streams: A macro-level investigation of the source and scale of energy and GHG benefits associated with the management of UK waste arisings. This report was drawn on in producing the 2007 Waste Strategy and has been important in strengthening focus on the climate change impacts of waste [ref 18].
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Evidence, Assessment Methods and Standards
84. Beyond Defra’s research programmes, work underway in other Government departments and delivery bodies has direct relevance to sustainable production and consumption. This includes: • Environment Agency waste-related research and horizon scanning;
• WRAP’s work on waste reduction and increasing the use of recyclates; and • Energy Savings Trust evidence on energy-using products.
85. The Research Councils also support a range of projects to investigate issues and support development of innovative solutions. For example:
• the Economic and Social Research Council funded ‘The Waste of the World’ programme which brings together researchers in geography, anthropology and materials science and connects the UK with South Asia (particularly India and Bangladesh), the US, Europe and Kazakhstan to rethink global waste issues; and
• the cross-Research Council ‘Living With Environmental Change’ activity is an interdisciplinary programme to increase resilience to and reduce costs of environmental change, and examine the associated pressures on natural resources, ecosystem services, economic growth and social progress.
Business
86. Most businesses have some evidence about the sustainability of their products – in some cases comprehensive evidence for the whole product lifecycle, and in others more limited evidence about particular impacts or lifecycle stages. For example, evidence for electronics, cars and some building products driven by product focused legal and market interventions.
Sharing evidence
87. Some of this evidence is generic across all product groups (e.g. information about the nature and severity of environmental impacts, or on the overall impacts of all products), some will apply to certain product groups (e.g. consideration of alternative materials for product manufacture) and some is specific to an individual product (e.g. calculation of transport impacts throughout a product’s lifecycle). Evidence at all of these levels is needed to be able to understand and prioritise product impacts.
88. It makes sense to share evidence between sources where possible – both for efficiency and to help develop an agreed understanding of impacts. This is particularly the case for evidence which is generically applicable or transferable between products. It also applies to communication of product information through the supply chain, between businesses, and between businesses and consumers.
89. The European Commission has looked at how sharing of evidence and information can be encouraged [ref 19] and Government is looking at what it would like to see nationally.
Future Plans on Evidence
International
The EU EXIOPOL study is due to report in 2010. This follow up to EIPRO will develop a new environmental accounting framework for the EU, helping to show which EU consumption behaviours generate the most significant environmental impacts.
The EU Joint Research Centre is building a European database of lifecycle inventory data and impact assessment factors and developing methods to facilitate knowledge exchange. The UK will be working closely with the developers of this database and supporting its use as a data source.
Government
In future the Defra team working on Sustainable Consumption and Production evidence will focus on:
– gathering and, where necessary, commissioning generic evidence which applies across all product groups, and that which is transferable between a wide range of products
– improving read across between Government’s different sources of product and materials related evidence
– improving join up with other evidence providers – including mapping interactions with the major UK research centres and delivery bodies, and
– action to improve transfer of this evidence to the people that need to see it in a form that motivates and enables action
Business and others
Without prejudice to the normal rules of competition, Government sees a bigger role for business sector groups and trade organisations in generating guidelines of what evidence is needed and how to make it comparable and/or useful for a range of products.
Government would also like to see a greater role for businesses generally in communicating sustainability information to consumers and other businesses – particularly those in their own supply chains. Government intends to set out, by the end of 2008, a clear statement of how it sees product information being used more proactively to support improvements in the sustainability of products.
The Economic and Social Research Council, together with other Government partners across the UK, is seeking to establish an independent, multidisciplinary, academically based Research Centre on Sustainable Behaviours from Spring 2009. The focus of the Centre will be on the research challenges of informing moves within UK society towards more environmentally sustainable patterns of consumption and ways of living.
Question 2: Are the priorities outlined above the right ones for Government’s work on products and materials evidence?
Question 3: What are the gaps in the current evidence base?
Question 4: How can Government and others work together to be most effective in the gathering, transfer and communication of products evidence?
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Source signific
All lifecycle stages
90. The most obvious impacts associated with a product are often those resulting from its use and maintenance – the direct impacts. However, the main tenet of product policy is to look across the whole supply chain at the impacts over the whole product lifecycle – to include the embedded impacts of a product.
91. This means considering not just the impacts of use/maintenance (where we often have good evidence – for example evidence on energy and water use by energy using products developed through the Government’s Market Transformation Programme), but also the impacts associated with its sourcing, manufacture, distribution and recovery/disposal. It also means including impacts which occur overseas as well as in this country. In the age of global supply chains, many of the economic, environmental and social impacts from UK consumption of products and services are international. This is particularly relevant where UK consumption is mainly of imported products, such as clothing and consumer electronics. Evidence for particular product groups is discussed in part 2 of this report.
Embedded carbon dioxide emissions (tonnes) by UK import categories from different geographical regions (2000) [Ref 20]
92. As the examples below show, looking at embedded impacts often reveals very significant impacts which are not apparent when looking only at the use/maintenance stage.
Evidence, Assessment Methods and Standards
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93. The information for this diagram is taken from a recent Defra research report which models the carbon dioxide emissions associated with UK consumption of products and services, wherever in the world these are produced. It suggests that these increased by around 18% between 1992 and 2004, with an increasing amount of emissions associated with production of goods in countries outside the OECD, mainly in Asia [ref 22].
Global average virtual water content (litres) of selected products, by unit of product
Source: Water footprint of nations UNESCO-IHE [ref 21] Note that geographical location of the impact is much more
significant for water than for CO2
Product Water content (L)
1 pair of shoes 8000 1 cotton T-shirt 4100 1 hamburger 2400 1 glass of milk 200 1 cup of coffee 140 1 microchip (2g) 32
Estimated carbon emissions from UK
household consumption, 2004
0 5 10 15 20 25Source: Based on estimates of embedded emissions, Stockholm Environment Institute, 2008
A
verage tonnes CO2 per
household
Fuel for private cars
Fuel use in the home Indirect emissions from energy use Aviation & public transport
Food and drink Textiles Appliances and other products Indirect emissions from services Direct emissions Indirect emissions e and across e the good loped mpacts means upply on of tion is ticular phical ficant
Stret http: This polic Exec for a User the c self-a This to id Man econ – mit 94. There are commonly used and accepted descriptions of each of the lifecycle stages (in the
International Standards Organisation methodologies for lifecycle assessment). The lifecycle stages are defined as:
• raw material acquisition; • manufacturing;
• distribution;
• use/maintenance; and
• reuse, recycling, energy recovery, disposal.
Priority impacts
95. In response to high levels of concern about climate change, there is clearly an imperative to measure the greenhouse gas (and often specifically the CO2) impacts associated with products.
96. But just as it is not sustainable to look only at the economic impacts associated with a product, it is also not enough to look just at greenhouse gas impacts. On the other hand, it is never going to be a good use of resources to do a detailed study of every possible impact for every individual product.
97. We need to make judgements about which environmental, social and economic impacts are important. This depends to some extent on the decision being made and there are many different check lists of priority environmental, social and economic impacts used by business, Government and others for different purposes. Relevant checklists (although not designed for product assessments) include:
• The Government impact assessment checklist which gives a list of environmental, social and economic issues to consider when developing Government policies [see box on next page and annex 2]
• Government’s policy on corporate social responsibility http://www.csr.gov.uk/ and environmental reporting guidelines [ref 23] which give guidance on important environmental and social impacts for businesses to report on.
A recent report, commissioned by Defra, on environmental limits also made suggestions for a checklist of types of environmental limit which could be of concern [ref 24].
Stretching the Web
http://www.defra.gov.uk/sustainable/think/stretch/index.htm
This tool was developed to help Government staff to integrate Sustainable Development into their policy making. The web is a simple graphic, which takes its questions from the Better Regulation Executive’s Checklist for Specific Impact Tests (see annex 2). This is mandatory within Government for all policy development.
Users rank their policy outcomes and they are then displayed as a simple web. Each question in the checklist becomes a ‘spoke’ of the web and the joining strands are created by joining up the self-assessed ‘score’ for each question, from -2 (very negative impact) to +2 (very positive impact). This allows easy identification of ‘bites’ or negative impacts of the policy and enables policy makers to identify areas for further work.
Many policymakers think of sustainable development as a ‘trade-off’ or ‘balance’ between economic, environmental and social impacts. In fact, we should think of it as ‘stretching the web’ – mitigating negative impacts, and increasing positive impacts.
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Evidence, Assessment Methods and Standards
Products methodologies – checklists and calculations
98. Lifecycle analysis provides a flexible, outline approach to lifecycle thinking which can be adapted to suit different situations, as well as some detailed assessment methodologies for the range of environmental and social impacts that they cover. There are established ISO standards for lifecycle assessment which have been used and tailored by many to suit their own needs. The European Commission has established a Platform on Life Cycle Assessment to help co-ordinate lifecycle data collection efforts across the EU and provide greater harmonisation of approach.
99. Beneath the overall lifecycle analysis framework there is a wide range of checklists and calculation methods which aim to simplify and/or standardise the analysis process in different ways and to varying extents. As shown in the table, some of these simplify by looking only at particular impacts, some by looking only at particular stages of the product lifecycle, and some at particular product groups.
Methodology Developed by Lifecycle
stages covered Impacts covered
Products covered Reference Checklists Twelve Point Checklist Sustainable Development Commission All Specific environmental and social All 25
The Natural Step The Natural Step All
Specific environmental and social All 26 Calculations PAS2050 (in development) BSI, Defra,
Carbon Trust All
Greenhouse
gases All
In
development
Act on CO2
Calculator Defra In use
Greenhouse
gases All 27
A-G Energy efficiency rating method
EU Mainly in use Specific
environmental Energy using products 29 Code for Sustainable Homes assessment Communities and Local Government and Building Research Establishment Mainly in use, but LCA for materials Specific environmental and social Homes 28 Horizontal Standardised Methods for the Assessment of the Integrated
Environmental Performance of Buildings
EU All Environmental Buildings In
development
Stan
100.Future work on assessement methods
International
The EU Joint Research Centre is producing a handbook of technical guidance documents for lifecycle analysis specialists.
Government
We will complete the Carbon Trust/Defra/BSI work to develop a new standard on measuring the lifecycle greenhouse gas impacts of products and services (PAS2050), and then promote the take up and use of PAS2050 within Government (making links with Defra’s work on its own carbon footprint, and work to provide supplementary Green Book guidance on valuing innovation in the context of environmental policy [ref 9])
Defra will consider, with the Carbon Trust, the merits of building a shared database of the results obtained through the use of PAS 2050
The Forestry Commission is developing protocols for estimating greenhouse gases benefits associated with woodland creation projects that are accurate, consistent, repeatable and transparent.
Business and others
Defra hopes to see widespread take up and use of PAS2050 by business, and to capitalise on strong interest from international partners (including the International Standards Organisation) in PAS2050.
Question 5: Is there any need to rationalise or draw together the existing range of assessment methodologies for products?
Question 6: Are there cases where there is a need for development of further checklists or calculation methods? This might be for particular
– impacts (eg water use, labour conditions)?
– lifecycle stages (eg manufacture, distribution)? or – product groups (eg food and drink, clothing)?
Question 7: Is there anything further which Government could do to assist business to assess the lifecycle impacts of products and prioritise the most effective ways to reduce impacts? an be or the dards needs. p co-sation s and ferent nly at some ent ent
Standards and benchmarking
100. In addition to tools to assess product sustainability, the development of standards, benchmarks or comparative rating systems for particular products or product groups is essential to support many market interventions (eg legal minimum standards, voluntary initiatives, fiscal measures, procurement standards and product labelling).
102. w
Over
103. – – 104. W 105. 106. w 101. Such benchmarks and standards may be developed through national and internationalstandard setting bodies, Governments or other parties. Many thousands of standards have been developed and publicised for a huge range of products. Examples where Defra has encouraged or supported the use of benchmarks to improve product sustainability include: • performance rating scales such as the A-G energy efficiency rating scale used for domestic
white goods, lamps and air conditioning across Europe, and in the UK for cars; and the star rating system in the Code for Sustainable Homes;
• benchmarks which support the EU Ecolabel, the Energy Saving Trust’s Energy Saving Recommended level, industry standards for legal and sustainable timber, BS8901 on sustainable events management, and the Fairtrade label.
Evidence, Assessment Methods and Standards
Future for standards and benchmarking
Standards and benchmarking will be a key area of focus for future work on product sustainability. In particular:
Building consideration of lifecycle impacts into standardsDefra will work to ensure lifecycle impacts are considered wherever possible in the review and development of voluntary standards. Standards Information on Business Link The information on Business Link is being expanded to include standards-related material. An initial information pilot of standards information on www.businesslink.gov.uk is currently being evaluated and fuller content will be launched in summer 2008. [ref 9]
Review of standards for sustainability DIUS and BSI are exploring the extent of standards available to support the sustainability agenda. A gap analysis will be conducted and used to inform future policy. [ref 9]
Benchmarking for energy using products There are plans to extend benchmarking to other energy using products across Europe in the next 12-18 months. The most likely product groups to be covered include consumer electronics (such as televisions and set top boxes) and Information and Communication Technology.
Government efficiency standards for energy using productsIn the 2007 Energy White Paper the Government has committed to regularly update the trajectory for improvements in the efficiency of energy using products sold on the market between now and 2020. These standards currently cover 12 product categories (from washing machines to street lighting). The scope for these standards to cover new products will also be kept under review.
Benchmarking for water using products Government is working with the European Commission to establish a similar approach to benchmarking of water using products [ref 30]. Product approvals for construction products Government will consider the role products approvals regime can play in encouraging the introduction of innovative and sustainable construction products, review whether there is scope for improvement, and taking account of developments at EU level. [ref 9]
102. The third step of the products approach is to put in place the improvement strategy to tackle the impacts and deliver greater sustainability. Generally, an improvement strategy for a product will need to include a range of interventions by Government, business and consumers, including actions taken locally, nationally and internationally.
Overall approach to interventions
103. Intervention is needed to tackle market failures which lead to adverse impacts across various points in the supply-chain. These market failures include:
–“negative externalities” where environmental or social impacts – such as emissions of carbon dioxide or other polluting activities – are not considered in firms’ decision making processes or in a household’s consumption and
–lack of, or inequalities in, information – for instance where households don’t understand adequately the net cost-savings of energy efficient appliances, or producers know more than consumers about the fuel efficiency of cars. Even if the information provided is sufficient, consumers may not act in the manner initially expected, for instance where the net cost savings of energy efficient appliances aren’t taken up.
104. Where such market failures exist, we need to intervene in the most cost-effective way, delivering the greatest overall environmental, social and economic benefits within given resources. 105. Government is generally in favour of using market based instruments where effective to drive sustainability improvements, and has in place a range of interventions in place to tackle negative externalities. Key amongst these is the EU Emissions Trading Scheme for Carbon. This creates a price for direct UK carbon dioxide emissions from all the installations covered by the scheme, allowing businesses to make their own choices on priorities, and minimising the costs of reducing emissions. Having set a cap on the maximum limit of carbon dioxide emissions across the EU it then allows for abatement at the lowest cost. Carbon dioxide pollution permits are sold by those who can abate cheaply to those who find it more costly to abate.
106. Overarching pricing and trading schemes are a very important instrument, but they are not the whole solution. For greenhouse gas emissions, Sir Nicholas Stern’s review [ref 4] emphasised that policy should be based on three essential elements: carbon pricing, technology policy and removal of barriers to behavi
