Defra Environment Bill Targets, Economic Analysis of Policy Pathways for Increasing Resource Productivity

Aim

To provide a macroeconomic assessment of policy scenarios for driving improvements in resource productivity in England. Achieving this overarching aim will require developing or utilising an existing macroeconomic model to deliver scenario analysis based on a shortlist of policies provided by Defra as well as modelling outputs from a Multiregional Input-Output model. In support of this, the contractor is expected to build on current evidence that will be shared to further develop the data and assumption inputs required for the macroeconomic modelling of those policy scenarios, considering in particular potential implications for costs, spending, trade, prices and labour markets.

This economic analysis will support planned consultation and policy decisions related to potential target-setting in the area of resource efficiency and waste reduction under proposed powers sought in the Environment Bill. It is not expected that a detailed economic appraisal is feasible for each individual policy, but rather a light-touch analysis across the policy pathways is sought. Defra are open to proposals and discussion around what would be a proportionate and feasible approach for this analysis within the time constraints of the project.

Background

Environment Bill Targets

Once in place, the Environment Bill (EB) will give the Secretary of State the power to set long-term, legally-binding targets (>15 years) across the breadth of the natural environment. On the 19th of August 2020, Government released a policy paper setting out how initial long-term targets will be developed over the course of the next two years. Within the area of resource efficiency and waste reduction, initial targets aiming to drive improvements in material resource productivity (the economic value we generate per unit of raw material use) and reductions in residual waste (waste which is usually sent for incineration - including for energy recovery - or landfill) are being explored.