June 5, 2024

The Evolution of Circular Economy Policies: What's Changing in the United States

The United States stands at the edge of transformation as the world races towards a sustainable future. As the global momentum behind adopting circular economy principles as a sustainable alternative to traditional linear, take-make-waste, consumption patterns becomes increasingly evident, the United States has been falling behind. While the U.S. is relatively slower in fully embracing comprehensive circular economy policies compared to other regions, significant shifts are underway.

Businesses are now more acutely recognizing the economic advantages of integrating circular practices into their sustainability strategies. Many are proactively incorporating such principles to drive down costs and enhance overall resource efficiency. Additionally, there's a growing acknowledgement of the importance of meeting consumer demands for eco-friendly products. Although federal-level legislation targeting circular economy initiatives remains somewhat limited, strides are being made to incorporate circularity into broader environmental policies.

The circular economy presents substantial investment opportunities across various sectors. These include renewable energy, recycling infrastructure, sustainable packaging, and remanufacturing. Investors increasingly acknowledge the potential for significant financial returns while supporting crucial environmental objectives. Despite the absence of a comprehensive national circular economy policy framework in the U.S., the upward trajectory towards integrating circular principles into policymaking, business strategies, and societal norms indicates a discernible shift towards a more sustainable and resilient economy.

The concept of Extended Producer Responsibility (EPR) is tightly interwoven with the progression of circular economy policies in the United States. EPR is a pivotal policy approach aimed at redistributing the responsibility of managing post-consumer products and packaging from taxpayers and local governments to the producers themselves. Under an EPR framework, producers bear the financial and operational responsibility for the end-of-life management of their products, including collection, recycling, or disposal. By implementing EPR laws or regulations, governments can incentivize producers to prioritize circular economy principles, such as designing products for recyclability, reuse, remanufacturing and use funds to expand infrastructure..

As consumer expectations increasingly gravitate toward companies taking greater responsibility for the environmental impact of their products, EPR offers a viable mechanism for producers to demonstrate their commitment to sustainability. Moreover, EPR initiatives foster investment opportunities in recycling infrastructure, waste management systems, and sustainable product design. Producers, in their bid to comply with EPR requirements, are prompted to invest in technologies and processes to minimise waste, enhance resource efficiency, and bolster their environmental performance. 

California has long been at the forefront of environmental legislation, pioneering policies addressing pressing environmental challenges. In recent years, the state has made significant strides in advancing circular economy initiatives through various legislative measures. Here are some key examples:

  1. SB 1383 (Short-Lived Climate Pollutants Reduction Act): This landmark legislation targets short-lived climate pollutants, including methane emissions from organic waste. SB 1383 establishes targets for reducing organic waste disposal by 75% by 2025 and diverting edible food to food recovery organizations. It also mandates implementing organic waste recycling programs and the development of market infrastructure for recycled organic products.
  2. SB 54 (California Circular Economy and Plastic Pollution Reduction Act): Introduced in 2020, SB 54 aims to reduce plastic pollution and promote a circular economy for plastic products. The bill requires manufacturers to reduce single-use plastic packaging and products by 75% by 2030. It also establishes minimum recycled content requirements for plastic beverage containers and requires producers to fund recycling and litter cleanup programs.
  3. AB 341 (California Recycling Market Development Act): AB 341, enacted in 2011, requires businesses and public entities in California to implement recycling programs to divert waste from landfills. It sets a statewide goal of 75% recycling, composting, or source solid waste reduction by 2020. The legislation aims to stimulate the development of recycling infrastructure and markets for recycled materials.
  4. AB 1594 (California Recycling Infrastructure and Market Development Act): This bill, passed in 2020, seeks to strengthen California's recycling infrastructure and market for recycled materials. AB 1594 establishes the Recycling Infrastructure Financing Program to provide low-interest loans and grants to entities investing in recycling infrastructure projects. It also requires the California Environmental Protection Agency to develop a comprehensive recycling market development strategy.

These examples highlight California's commitment to advancing circular economy policies through legislative action. By setting ambitious targets, promoting sustainable practices, and investing in recycling infrastructure, the state aims to reduce waste, mitigate environmental impacts, and foster a more resilient and resource-efficient economy.

Ultimately, the growing momentum behind circular economy initiatives, coupled with the recognition of their significant investment opportunities, underscores a fundamental shift towards a more sustainable and resilient economy in the United States. As stakeholders continue to collaborate and innovate, there's an optimistic outlook for realizing a future where circularity is not just an aspiration but a fundamental aspect of how we consume, produce, and thrive.