Week 6 Lecture - Law, Governance & Sustainability

What is the Circular Economy?

• Circular economy aims to design out waste, keep products and materials at highest utility, and close material loops through design, reuse, repair, remanufacture, and recycling.
• It contrasts with the linear economy: extract → produce → distribute → use → dispose (often ending in landfill). A circular approach seeks to optimize life cycles, sharing economies, and better waste collection infrastructure.
• Regulation is essential to drive the systemic shift; policy supports product design, infrastructure, and market creation for circularity. Governments (e.g., Queensland) see circular economy as a path to economic growth in maintenance/repair, remanufacturing, biotechnology, recycling, and shared economies, and as a way to reduce greenhouse gas emissions. But policies alone don’t guarantee outcomes; real-world implementation requires coordinated action and governance.
• Important caveat: circular economy policies can unintentionally increase production/consumption if not carefully designed; there are risks of greenwashing (claims about sustainability that aren’t substantiated); and the approach often overlooks social/human rights dimensions (e.g., waste shipped overseas, labour rights, and the care and knowledge required for transition).
• In practice, regulation alone cannot solve all issues; it must address social impacts, worker rights, and equitable transitions, and connect with international trade rules.

Waste: definitions, history, and context

• Waste is culturally constructed: what counts as waste changes over time and place; a thing may be waste in one era and valued in another.
• Mary Douglas (1966) argued that things can be judged as polluting because of their fit within social classifications; dirt is “a matter out of place.” This lens helps explain shifting definitions of waste and pollution across societies and time.
• Historical insight: looking at artefacts and waste from past periods reveals what societies valued and how they used resources; similarly, future researchers will learn from our current waste disposal.
• There is broad scholarly consensus that waste generation is increasing, driven by hyper-consumption, with ads, brands, and short product life cycles contributing to higher turnover.
• Current regulatory approaches tend to address waste after it is created (end-of-pipe) rather than preventing waste generation upstream.

Linear vs circular economy (example)

• Linear shirt example: cotton resource extraction → garment production → global distribution → consumer use → disposal in landfill.
• Circular economy questions: can we design better products? Can we reduce waste in production? Can we extend product life, promote reuse, and support better collection and recovery of materials?
• Circular approaches seek to redesign processes, promote sharing and repair, and develop markets to support material recovery, with a focus on moving beyond recycling as the end goal.

Regulation and the circular economy

• Government regulation is the tool to shape behavior of individuals, governments, and industries, and to manage resources in the transition to circularity.
• Types of regulation commonly discussed:
  • Command-and-control regulation: mandates and prohibitions (legislation specifying required actions).
  • Economic regulation: price signals, levies, taxes, or fees to drive behavior change.
  • Industry self-regulation: industry sets rules to avoid stricter government regulation.
  • Voluntary regulation: firms adopt standards for market access or risk management.
  • Information/education regulation: disseminating information about new rules and obligations.
• Information and education are essential to explain new obligations and to support behavior change.
• Practices and behaviors should be addressed in tandem with regulatory design to avoid loopholes or unintended consequences.

Regulatory barriers to a circular economy

• Inconsistent regulations across state and local jurisdictions make compliance and scale difficult for waste management businesses (e.g., Queensland vs NSW vs Victoria; bin rules on campuses vs home differ).
• Landfill costs influence where waste is sent; cheaper disposal in one state can drive cross-border waste movements.
• Inconsistent bans and approaches to batteries and hazardous substances can relocate risk rather than reduce it.
• Food and organic waste: some regions allow organics in green bins; others do not; regulatory uncertainty affects waste streams.
• PFAS (forever chemicals): significant risk in waste streams; policy must balance risk of reuse with potential harm from chemicals.
• Site-based coordination and place-based initiatives are proposed to enable regional flows of waste between nearby manufacturers (co-location) and to reduce NIMBY concerns (not in my backyard).
• NIMBY dynamics hinder location of landfills, making it harder to expand infrastructure needed for a circular system.
• The right to repair and durability labeling: current laws do not always guarantee clear information on product durability or repair options; addressing this requires integration across consumer/competition law, IP protections, labeling, and environmental/resource management.
• Government procurement can drive change by mandating sustainability outcomes for public projects (e.g., Commonwealth procurement requirements for sustainable construction projects from 2024; textiles in government procurement).

Six material streams ( Productivity Commission focus) and regulation needs

• Built environment (construction waste): addressable via modern construction methods and recycled content.
• Food and agricultural waste: reduce waste along the food cycle; maximize use-value of by-products.
• Textiles and clothing: priority issue; Australians are high per-capita textile consumers; seek to reduce textile waste and improve reuse/recycling.
• Mining: currently a large waste generator; long-standing regulation around mining waste and land rehabilitation.
• Vehicles: high waste stream; requires lifecycle regulation.
• Electronics: hazardous materials, chemicals, and transboundary movement concerns; need to manage e-waste safely and responsibly.

Why regulate and how regulation can work in practice

• Regulation helps shape behavior and market structures for circularity, but it must be harmonized across jurisdictions and aligned with international trade rules.
• A mix of instruments is often needed (not just bans):
  • Legislation and standards for product design, labeling, and end-of-life handling.
  • Economic instruments (levies, taxes, subsidies) to incentivize better design and recycling.
  • Self-regulation or co-regulation to involve industry in setting practical standards.
  • Voluntary schemes to encourage early adopters and test approaches before formal regulation.
  • Information campaigns to educate households and industries about obligations and opportunities.
• Place-based coordination and incentives may help regions co-locate manufacturing waste streams to improve reuse (e.g., remanufacturing clusters).
• A core challenge is determining where responsibility lies (government, industry, consumers) and designing reforms that are harmonized across international and sub-national levels.

Textiles case study: why textiles are critical in the circular economy

• Textile waste is a significant national issue: Australians accumulate $27$ kg of waste per person per year; $23$ kg disposed; textile waste around $15$ kg per person per year; average clothing consumption around $56$ garments per person per year.
• Textile waste has environmental and social dimensions: high greenhouse gas emissions, water and chemical use, and social concerns (modern slavery risks, gendered workforce in the textile supply chain; workers face long hours, low wages, limited protections; >80% of workers are women; instances of child/forced labor).
• Textiles were added to ministerial priority lists for product stewardship in 2021; focus is on lifecycle responsibility rather than end-of-life only.

Seamless: Australia’s voluntary textile product stewardship scheme

• Seamless is the textile product stewardship scheme in Australia; it is Commonwealth-level and voluntary.
• How it works in practice:
  • Every item sold has a levy of $4 ext{¢}$; funds four goals: circular design, circular business models, closing material loops, and citizen behavior changes.
  • Eco-modulation: more sustainable designs can reduce the levy (e.g., some items are charged only $3 ext{¢}$ instead of 4¢).
  • Steward scope: defined broadly; any business that imports clothing or commissions local manufacturers falls under the scheme.
  • Private-sector participation is voluntary; about 60 brands/retailers have signed up; many other brands do not, creating free rider problems.
  • The scheme uses a voluntary, not statutory framework; unlike mandatory EPR regimes elsewhere.
• Issues with Seamless:
  • Free rider problem: non-signatories benefit from the scheme without contributing.
  • Coverage is not universal; the levy funds only a portion of necessary recycling and infrastructure.
• International context: some jurisdictions impose mandatory EPR for textiles (France, Netherlands, Sweden, Hungary, Latvia, South Korea; California in the US), and more (Germany, Italy, Spain, Portugal, Chile) are planned.
• Australia’s research contributions helped inform design (e.g., local governance, high-value bioproduct reuse, and regulatory barriers to circular economy adoption).

Textiles: fast fashion regulation and EU leadership

• The environmental and humanitarian footprint of textiles is large: greenhouse gas emissions, water use, and chemical use; textiles production has doubled in 15 years; garments are worn fewer times (average around 36% fewer uses).
• The EU has taken growing regulatory action on textiles to address durability, recyclability, repairability, hazard reduction, and reuse.
• EU policy framework includes:
  • Corporate Sustainability Due Diligence Directive (CSDDD): requires importers to ensure sustainability and human rights compliance across supply chains; applicable in a phased way (initially to larger companies) with penalties up to $5 ext{\%}$ of global turnover for non-compliance.
  • Green Claims Directive (regulating sustainability labels and claims to ensure they’re verifiable).
  • Eco Design for Sustainable Products Regulation (ESPR 2022): aims to ensure products meet durability, reparability, and recyclability criteria; introduces a Digital Product Passport (DPP).
  • Digital Product Passport (DPP): mandatory information traveling with a product through its lifecycle; helps identify materials, chemicals, origin, and compliance; mandatory in late 2027; trials ongoing for how to implement and standardize data.
  • Waste laws amended specifically for textiles to introduce mandatory EPR schemes and post-consumer accountability; levy structures to fund better design and recycling.
  • General aim: shift responsibility from factories to importers/brands for sustainability and human rights within global supply chains.
• France as a leading example within the EU:
  • Implemented a comprehensive textile EPR framework since June (effective January next year).
  • Higher levies on textiles (including imported items) to reflect true disposal/recycling costs (France targets ultra-fast fashion platforms like Shein/Temu with a €5–€10 tax per item on import and bold measures).
  • Advertising ban on ultra-fast fashion on social media and influencer platforms; penalties include up to €300,000 fines and potential imprisonment.
  • Import restrictions and a ban on free returns for ultra-fast fashion items to reduce waste.
  • France’s approach is enabled by its history of regulation and a strong culture of consumer/product stewardship.
• The EU’s approach to textiles builds on the Basel Convention framework for hazardous waste and recent amendments to classify used textiles as hazardous; this would push more textile waste processing onshore rather than export, depending on the final directive.
• Basel Convention backdrop:
  • Regulates cross-border movement of hazardous waste; proposals exist to classify used textiles as hazardous waste, which would significantly affect trade and require onshore processing.
  • In practice, Basel rules involve consent and specific requirements for transfers; classification of textiles would tie into the onshore handling of wastes and materials.
• PFAS and chemical risks in textiles:
  • Forever chemicals (PFAS) pose long-term environmental and health risks when textiles are recycled or disposed; policy must balance reuse opportunities against potential chemical exposure.
  • Regulation of chemicals of concern is central to sustainable textile design and to preventing harmful substitutions.

Product stewardship, extended producer responsibility (EPR), and regulatory instruments

• Product stewardship (Australia) and EPR (international term) share the goal of making producers responsible for the product’s lifecycle.
• Australia’s framework includes:
  • Product Stewardship Act 2011 (Commonwealth): establishes schemes for various product streams (e.g., voluntary textile schemes, tyres, batteries, paint, and some plastics through co-regulatory arrangements).
  • Voluntary schemes: e.g., mobile phone recycling programs run by brands (Apple, etc.).
  • Co-regulatory schemes: e.g., Australian Packaging Covenant dealing with plastics and packaging recycling.
  • Mandatory schemes: currently limited in Australia (oil recycling is one explicit mandatory stream).
• For textiles, Seamless is the primary Australian voluntary scheme; other jurisdictions have broader mandatory EPR for textiles, signaling rising global adoption of extended responsibility in fashion.
• Global landscape:
  • Mandatory textile EPR: France, Netherlands, Sweden, Hungary, Latvia, South Korea; California (USA).
  • Planned: Germany, Italy, Spain, Portugal, Chile.
• Lessons from policy design (as informed by research): levy design, eco-modulation (discounts for better designs), and the need for a robust governance structure to prevent free-riding and to ensure broad participation.

Textiles value chain and potential regulatory reforms

• Clothing value chain overview: fibre → spinning → yarn → fabric → garment → brands/retailers → consumer use → resale/repair/reprocessing → end-of-life (often landfill).
• Key idea: across the value chain, there are opportunities to intervene in multiple places to reduce waste and improve circularity, including closing loops at the growth (cotton) stage and re-integrating waste back into fibre and fabric processes.
• Practical reform options to consider:
  • Move from voluntary to mandatory EPR for textiles, expanding coverage to all brands and retailers.
  • Expand labelling requirements to include durability, reparability, and end-of-life options (and to clearly identify where to repair or recycle).
  • Implement consumer education to shift demand toward durable, repairable, and recyclable garments.
  • Strengthen international cooperation and harmonization with EU rules to facilitate cross-border markets for recycled textiles and to create common standards for DPPs.
  • Develop place-based regional policies to create clustering for recycling, repair, and remanufacturing activities.
  • Embrace the ethics and social implications of the textile supply chain by promoting fair labour practices and human rights due diligence throughout the supply chain (CSDDD-type approaches).

Important numerical references and terms (quick reference)

• Waste per person per year: $27$ kg total waste; $23$ kg disposed; textile waste about $15$ kg per person per year.
• Textile consumption: around $56$ garments per person per year.
• Seamless textile scheme levy: $4 ext{¢}$ per item; eco-modulation can reduce to $3 ext{¢}$ for more sustainable designs.
• Textiles EPR penalties and costs in the EU/France: France contemplates a levy of $5 ext{€}$ to $10 ext{€}$ on fast-fashion items from new channels like Shein/Temu; France also imposes strict bans on ultra-fast fashion advertising and on free returns.
• Regulatory penalties under EU schemes: non-compliance with CSDDD can lead to fines up to 5 ext{%} of global turnover.
• Digital Product Passport (DPP): mandatory in the EU under ESPR 2022; expected to be fully implemented by late $2027$.
• Circularity and global impact: CSSDD and DPP aim to improve accountability across supply chains and to enable better material tracing for reuse and recycling.
• Global trade context: Basel Convention governs cross-border movement of hazardous waste; proposals may reclassify used textiles as hazardous, affecting trading patterns and requiring onshore management.

Key takeaways and forward look

• The circular economy is material-specific: different streams (built environment, food/AG waste, textiles, mining, vehicles, electronics) require distinct regulatory approaches and policy tools.
• Regulation should combine multiple instruments (legislation, economic incentives, voluntary schemes, and information/education) and should address social and labour dimensions, not just environmental outcomes.
• Textiles illustrate both the potential and the challenges: high waste rates, significant social harms, and complex supply chains that require cross-jurisdictional collaboration and harmonized standards.
• The EU is leading in regulatory alignment (CSDDD, Green Claims Directive, ESPR, DPP, and mandatory textile EPR) and provides a model for other jurisdictions. France’s approach shows what aggressive textile regulation can look like in practice.
• Australia’s experience with Seamless demonstrates the benefits and limitations of voluntary, producer-led schemes, highlighting the need for broader participation and potential moves toward mandatory measures.
• Ongoing and future considerations include: Basel Convention amendments on textiles, PFAS risk management, improved repairability and durability labeling, onshore processing incentives, and alignment of international trade rules with circular economy objectives.
• Open questions for policy design and examination:
  • What mix of obligations should apply to government, industry, and consumers to drive meaningful change without undue burden?
  • How can we harmonize subnational, national, and international rules to enable scalable circularity across borders?
  • Which regulatory instruments best preserve social protections (labour rights, fair wages) while achieving environmental goals?
  • How should we balance precaution with innovation when dealing with chemicals of concern and waste management technologies?
  • What role should procurement policies (e.g., for government uniforms, Olympics-related supplies) play in accelerating sustainable textiles?

Questions for reflection and discussion

• Is a mandatory EPR scheme for textiles feasible in Australia in the near term, or should we prioritize strengthening the existing Seamless framework first?
• How can we design an effective digital product passport for textiles that balances data privacy, practicality, and environmental accountability?
• What should be the acceptable level of levy and eco-modulation to drive genuine design changes without overburdening small brands?
• How can we ensure a just transition that includes workers and communities dependent on current textile production and waste management jobs?

Next focus in the course

• Week 7 will cover emerging issues at the intersection of AI and sustainability (as previewed by the lecturer).

Key people and examples mentioned

• PhD research examples:
  • Paul Peravic: local government’s role in food waste and limited authority over waste upstream.
  • Hannah Churton (Fight Food Waste CRC): regulations to support high-value bioproduct reuse.
  • Morgan O’Neill (CSIRO) and Wanless (a waste company): regulatory barriers to circular economy in Australia.

Summary

• Regulation must be material-specific, multi-instrument, and harmonized across levels to effectively drive circular economy outcomes.
• Textiles provide a vivid case study of regulatory design, showcasing the interplay between voluntary schemes, mandatory EPR, international regulation, and social considerations.
• The path forward requires coordinated action among government, industry, and consumers, with attention to ethics, labour rights, and global trade realities.