Developing Scotland's circular economy - proposals for legislation: analysis of responses

7 Assessing the impact of the Bill proposals (Q16-Q18)

7.1 This chapter presents respondents' views on the possible impacts that the proposals in the consultation might have on population subgroups (including those with 'protected characteristics' as defined in the Equality Act 2010), businesses, and the environment.

7.2 The consultation paper explained that the powers proposed for inclusion in the Circular Economy Bill are primary (enabling) powers. Thus, at this stage, partial impact assessments only had been conducted in relation to equalities impacts^[23] and business and regulatory impacts;^[24] subsequent secondary legislation to enact the policies detailed in the Bill would be subject to further (partial and full) impact assessments. The Scottish Government said that it would use the current consultation process as a means to explore any potential impacts.

Question 16: Taking into account the accompanying EQIA, are there any additional likely impacts the proposals contained in this consultation may have on particular groups of people, with reference to the 'protected characteristics' listed above? Please specify.

Question 17: Taking into account the accompanying BRIA, do you think that the proposals contained in this consultation are likely to increase or reduce the costs and burdens placed on any business or sector? Please specify.

Question 18: Do you think that the proposals contained in this consultation are likely to have an impact on the environment? If so, which ones and how? Please specify.

Equalities impacts (Q16)

7.3 A total of 230 respondents (75 organisations and 155 individuals) made comments on the (additional) impacts the proposals in the consultation might have on particular groups of people.^[25]

7.4 However, around half of the comments (including around a third of the organisational comments and over half of the comments from individuals) received in relation to Question 16 indicated that the respondent (i) was either unsure whether there would be any equalities impacts or (ii) thought there would be no equalities impacts. Thus, the number of substantive comments in relation to this question was substantially smaller than the total number of comments. The remainder of this section focuses on the views of those making substantive comments.

7.5 Respondents agreed with the suggestion in the consultation paper that people with disabilities would be most affected by the proposals, especially in relation to environmental charging. However, they also highlighted a wide range of other groups they thought might be disadvantaged or differentially impacted by the introduction of the proposals (some of which were not necessarily related to the 'protected characteristics'), including those who:

• Are old(er) and / or frail
• Are unwell / sick / in hospital
• Do not speak English / speak only limited English / belong to an ethnic minority
• Have mental health difficulties / learning disabilities / dementia
• Are on low incomes or live in deprived circumstances / places
• Live in rural areas
• Do not have access to suitable transport.

7.6 Some respondents noted that the groups that would be (most) impacted would depend on the scope of the proposals. In particular, if nappies, sanitary towels and / or incontinence pads were to be included in the legislation, then parents, women, and older people would be disproportionately affected.

7.7 Two specific concerns about the potential impacts of the proposals were raised by a wide range of both individual and organisational respondents:

• Single-use plastic straws were thought to be vitally important for those with a range of medical and nutritional needs. Respondents were concerned that restricting access to these or banning them completely would compound the difficulties of those requiring them and could add to their social isolation. These products were said to be crucial not just in hospital and care home contexts but also in social settings (e.g. cafes and pubs).
• Access to recycling facilities (including reverse vending machines) was viewed as problematic for a range of groups including those in rural areas, those with mobility problems, those living in high rise buildings, and those without access to a car or other reliable public transport.

7.8 There was widespread agreement that any change that was proposed should be implemented alongside services and infrastructure that would allow for an easy transition. There was repeated reference to the specific role of 'disability advisor' which was believed to have been very useful on the Expert Panel on Environmental Charging and Other Measures (EPECOM) in scrutinising the impact of banning specific items on those with disabilities.

7.9 Finally, it was also suggested that some of the changes proposed (e.g. to the procurement strategies of public bodies in relation to waste disposal and value chains) would have impacts beyond Scotland's borders and that these impacts should also be considered in assessing the proposals.

Business and regulatory impacts (Q17)

7.10 A total of 267 respondents (91 organisations and 176 individuals) made comments at Question 17 on whether the proposals in the consultation paper were likely to increase or reduce costs and burdens placed on any business or sector.

7.11 In general, both organisational and individual respondents thought that the proposals would increase costs for all businesses and sectors - at least in the short term. In particular, respondents thought there would be increased administration costs for businesses as a result of the requirement for additional invoicing, increased logistics planning, extra staff training, more reporting in relation to surplus stock, etc.

7.12 However, it was common for respondents from all sectors to emphasise that these increased costs should not be viewed in isolation. Respondents thought the wider context needed to be taken into account in judging the impacts of these increased costs. For example:

• While there might be increased costs initially, in the longer term these would be likely to decrease, ultimately to zero, or even to provide a net saving as new systems of administration develop, new secondary markets are created and single-use (plastic) items are eliminated.
• Any increase in costs could be mitigated if income from monetary penalties resulting from enforcement activities were reallocated - through a system of grants - to assist businesses with compliance.
• There were many benefits, as well as costs, to the proposals contained in the consultation. The benefits included environmental benefits, reputational benefits for businesses, reduced costs from waste, energy saving benefits, as well as the benefits of meeting any (new) legal requirements. Some respondents suggested that, when these benefits were weighed against the costs, there was an overall net benefit from the approach proposed.
• The changes would be applied 'across the board' and all businesses would be required to comply. Thus, there would be a 'level playing field', and this would help to increase the perception of 'fairness'.
• The transition to a circular economy is necessary in promoting a sustainable future for consumers and businesses. Thus, it is vital that these proposals - which reinforce the importance of the 'polluter pays' principle - are introduced.

7.13 Nevertheless, a range of respondents did raise concerns in relation to the increased costs for specific businesses and sectors. In particular:

• Some thought these changes might impact disproportionately on small businesses, including those operating out of small premises (for example mobile facilities and kiosks). Respondents who were concerned about small businesses said that any increase in costs should be proportionate to the size of the business.
• The restaurant / food / retail sectors were highlighted specifically as sectors which might be disproportionately affected, and for whom the introduction of these proposals alongside other current proposals (on Extended Producer Responsibility (EPR), plastic packaging tax, deposit return schemes (DRS) etc.) would be very challenging.

7.14 Respondents argued that the kinds of businesses mentioned in paragraph 7.13 above would need to be well supported through the transition phase as the proposals were implemented.

7.15 More generally, it was suggested that comprehensive and clear guidance would have to be developed in relation to any new requirements, and that the introduction of any changes would have to be gradual, with reasonable targets set for implementation. In addition, the introduction of any new measures would require additional investment, especially in recycling infrastructure. Public sector organisations (local authorities, in particular) emphasised the requirement for more capital and revenue funding to be made available if the Household Recycling Charter is to be made mandatory.

7.16 More clarity was requested in relation to (i) how funds from EPR will be distributed to local authorities and (ii) how to ensure that businesses do not 'pay twice' (specifically through EPR and DRS).

7.17 Finally, there was a small number of comments to the effect that the business and regulatory impact assessment (BRIA) was not sufficiently well developed at this stage to enable substantive feedback. Respondents asked for a full BRIA to be developed ahead of the primary legislation.

Environmental impacts (Q18)

7.18 A total of 293 respondents (104 organisations and 189 individuals) made comments at Question 18 on whether the proposals in the consultation were likely to have an impact on the environment.

7.19 In general, both organisational and individual respondents thought the proposals would have a positive impact on the environment, particularly in relation to (reducing) litter and landfill. It was common for this general conclusion to be stated alongside a caveat - e.g. 'if the proposals are implemented properly' or 'if reusable alternatives are available'.

7.20 Amongst those respondents who commented on the likely scale of environmental impacts, there was widespread agreement that any impacts would be 'modest' or 'small'. While some respondents viewed these modest improvements ('baby steps') as something to be celebrated and built on, others thought the proposals were 'insufficient' or 'inadequate' or 'would not be enough on their own' given the scale of the environmental challenges - including the climate emergency - which Scotland was currently facing. Environmental charities, third sector and community organisations, and environmental consultancies and resource management organisations were more likely than other types of organisation to take the view that the current proposals were insufficient.

7.21 The suggestions made by a range of respondents about (i) how the current proposals could be enhanced to achieve greater impact and (ii) other wider actions which should be taken to address environmental concerns are discussed in greater detail in paragraphs 7.22 and 7.23 below.

7.22 There were mixed views on two issues:

• Whether consumer and / or household behaviour would change in response to the introduction of the proposals: A range of organisational and individual respondents thought that these proposals would be effective in 'nudging' consumer behaviour in the right direction; however, others thought that on their own, the proposals were insufficient to prompt behaviour change.
• Whether fly-tipping might increase as a result of introducing the proposals: It was suggested by a range of respondents that any costs at the point of disposal would have to be kept low (especially at the outset) in order to prevent additional fly-tipping taking place.

7.23 Some respondents suggested the proposals could be enhanced by:

• Ensuring the charges on single-use beverage cups are accompanied by a reusable cup scheme
• Requiring that only 'natural' materials can be used for 'bags for life'
• Introducing measures to encourage uptake of surplus stock and its use as a substitute for raw materials / introducing additional measures to handle the excess food and textile waste
• Incentivising recycled content in new goods (in line with the proposed UK tax on plastics)
• Introducing a tax for textiles containing microplastics
• Introducing stronger enforcement in relation to end-of-life vehicles.

Wider actions to increase positive environmental impacts

7.24 There was a strong underlying theme in the comments made at Question 18 that the proposals in the consultation paper would not be enough on their own. Respondents asked that the proposals should be coordinated with - and have policy coherence with - other extant or developing legislation both in Scotland and the UK (e.g. the Climate Change (Scotland) Act, the reformed Extended Producer Responsibility scheme, the UK Environment Bill 2019). In addition, they suggested that other actions would need to be taken to achieve the objectives as follows:

• Implementation of carbon accounting (including implementation of measures linked to reporting)
• Introduction of life cycle assessment (so that, for example, the environmental impact of washing reusables, and the switch to stronger plastic as a result of the single-use plastic bag charge are taken into account)
• Explicit measures and targets to reduce consumption (i.e. more focus on the 'reduce' part of the 'reduce, reuse, recycle' hierarchy)
• More focus on repair and educating the public about how to repair items. (Note that 'repair' was seen as distinct from 'reuse'.)
• Education, publicity, communication and advertising in relation to the proposals.

Other issues

7.25 A range of other issues were raised including: the importance of laminated board being accepted in recycling systems; the need for more information on how reporting requirements will be enforced; the current (perceived) lack of capacity and capability in reporting on these types of measures; and the difficulty of determining the impacts given other possible changes which are being considered and / or introduced simultaneously.

7.26 Respondents from the packaging and manufacturing sector voiced their concerns that the proposed DRS will not have a significant effect on litter and recycling behaviours. Respondents from this sector also suggested that the current proposal for a DRS could have a negative impact by decreasing the sale of drinks sold in aluminium cans and increasing the sale of plastic bottles.

7.27 Finally, a small number of individuals emphasised that other sectors - including domestic heating, insulation, the energy sector, the construction industry in general, and the transport sector - have greater impacts on the environment than the ones considered in this consultation.